Changes to lease agreements, leading to steeply increasing ground rents over recent years, are an outrage. An estimated 18% of leaseholders in England and Wales – around 1m households – have a so-called “modern ground rent” lease, with escalating charges that make it impossible in many cases to remortgage or sell. Cost-of-living pressures, including food and energy price rises, make it all the more urgent that their situation is addressed. Angela Rayner was right to argue in the Guardian last week that ministers must pick a side.
This market should never have been allowed to develop in the way that it has. An investigation by the Competition and Markets Authority found no evidence that leaseholders get anything for these annual fees – which are separate from service charges that pay for the maintenance of common areas. Campaigners for leasehold abolition are right that the rent-seeking behaviour of freeholders is wrong. Mortgage lenders, as well as politicians, should have put their feet down years ago.
