Real Estate:UK respond to the HCLG Select Committee’s report on the Draft Commonhold and Leasehold Reform Bill

Commenting on the Housing, Communities, and Local Government Select Committee’s report on the Draft Commonhold and Leasehold Reform Bill, our Assistant Director of Policy Kate Butler said:

“It is disappointing that the Select Committee has not sufficiently considered, nor understood, any of the sector's significant concerns around the proposed ground rent cap in its report, deciding instead to support without scrutiny the Government's insubstantial, and in places incorrect, evidence on the impacts of ground rents on properties.

"As we told the Committee, the proposed cap is entirely disproportionate to the problem the Government is trying to solve; there is no evidence that ground rents above £250 effect saleability or mortgageability of properties, yet the cap will impact £10-12 billion of ground rent investments, including people's pensions.

"The Government should instead work towards a pragmatic solution that identifies and addresses those few ground rents that impact owner-occupier leaseholders, while preserving legitimate investments.

"However, we do welcome the Committee's recommendation to establish independent regulation of managing agents and provide support for Commonhold Associations in navigating their responsibilities - both of which Real Estate:UK supported during its pre-legislative scrutiny. We, therefore, encourage the Government to reflect these in introducing the Bill in due course".