By:Elliot Gulliver-Needham, Investment Reporter, City A.M, 2 June 2024:
An investment trust that makes money from ground rents has expressed relief after plans to ban the fees were dropped from one of the last bills to pass through parliament before it was dissolved ahead of the general election.
On Friday, the £28m Ground Rents Income Fund said the bill, which passed last week, represented “a better outcome for the company than contemplated.”
Leasehold property owners pay ground rents to freeholders to essentially rent the land from the ultimate controlling party. Campaigners have fought, ultimately unsuccessfully, to get these charges scrapped.
The Leasehold and Freehold Reform Act formed part of the government’s residential leasehold reform agenda. It was one of the final pieces of legislation passed by parliament ahead of the general election on 4 July.
The £28m Ground Rents Income Fund has said the bill, which passed last week, represented “a better outcome for the company than contemplated.”
The new law makes it easier and cheaper for people to extend their leases, buy their freeholds, or take over the management of their buildings.
Ultimately, ideas to remove group rent entirely, or cap it at £250, were dropped, despite plans from outgoing secretary for levelling up Michael Gove.
However, Labour’s shadow housing minister Matthew Pennycook has said the party will “finish the job of finally bringing the archaic and iniquitous leasehold system to an end”.
“If the polls are to be believed, a change of government looks inevitable with Labour returned with a hefty majority,” a QuotedData analyst wrote.
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