Closing summary
Britain’s competition watchdog has said ground rent is “neither legally nor commercially necessary” and that government may need to step in to protect consumers from soaring costs.
The housing secretary, Michael Gove, is considering capping all existing ground rents – possibly reducing them to a nominal “peppercorn” level, effectively zero – and launched a consultation in early December.
Hundreds of thousands of leaseholders are trapped in contracts with rising ground rents, which can double periodically or increase in line with inflation, making it hard to sell or remortgage properties, and their property rights can be at risk if they fall behind on payments.
The government’s plans have met with fierce opposition from the Residential Freehold Association and the British Property Federation, which says making such changes without compensating freeholders would be open to legal challenge, and taxpayers would be on the hook.
The CMA also said a further eight freehold investment companies had reached settlements with housebuilders to offer improved terms to leaseholders with ground rents that were doubling every 10 or 15 years, benefiting more than 500 households. All leaseholders will have their ground rents return to the original fee amount – the amount charged when the property was first sold – and they will not increase over time.
Several of the companies are owned by UK pension funds and managed by Long Harbour, an investment fund whose chief executive and part owner is William Waldorf Astor, the eldest son of the fourth Viscount Astor. His half-sister is Samantha Cameron, a businesswoman and wife of the former prime minister David Cameron.
Another investment company counts James Tuttiett among its directors, whose company, E&J Estates, administers more than 40,000 residential leases.
Our other main stories today:
Thank you for reading. Have a great afternoon/evening. We’ll be back tomorrow. – JK
Here is some analysis on the UK GDP figures:
Britain’s economy is on the road to recovery. After a dismal end to last year as soaring living costs forced households to cut back their spending, official figures show growth returned in January with a modest 0.2% increase.
The early signals show that the UK is on track to emerge from a minor recession within months, powered by a recovery in consumer spending amid resilient pay growth and receding inflation. But that isn’t to say the economy is racing ahead, or that a renaissance in living standards awaits.
While the figures appear positive at first glance, the broader picture is still one of relative stagnation.
Over the three months to January, GDP fell by 0.1%, while the economy still remains smaller than when Rishi Sunak became prime minister in late 2022. Growth has been near zero since, output per head remains lower than pre-pandemic, and real wages are still worth less than in 2008.
After January, two more months without sharp falls in GDP will be required to complete a full quarter of economic growth, fulfilling the technicality required for the country to escape recession. Economists at the consultancy Capital Economics reckon monthly declines of more than 0.3% in February and March would be needed to ensure another negative quarter. This appears unlikely, as surveys of private sector business activity and consumer confidence identify.
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