Leasehold and Freehold Reform Act is passed but with glaring omissions including caps on ground rent

She says: “Whilst it is obviously some small comfort to see a Bill get through Parliament, the Act itself, when it does eventually become law, still falls short on nearly all the promises made about the fundamental reform of freehold and leasehold.

“Forfeiture remains on the statute books, there is no duty on freeholders to ensure premiums are good value and there is no cap on ground rent.

“This means that leaseholders will have to continue the fight for fair treatment; whilst freeholders and managing agents will continue to take in huge profits at our expense. This Bill is better than nothing, but only just.”

The cap on existing ground rents was a key promise made by the government. Ground rent is levied on leasehold homeowners by the freeholder who owns the land the property is built on.

A common part of tenure in flats, more recently it became widely used on new-build housing estates and is a money making ploy that brought misery to many.

While it was announced in 2019 that all ground-rents on new leasehold houses were to be reduced to zero and all new houses must be sold on a freehold basis, those who were already caught in the trap still have to pay.

The issue with having no cap is that the ground rent can double every few years and so while the initial annual payment may have been £400 per year, it can soon rocket leaving some leasehold homeowners paying a small fortune on ground rent alone on a home they have already bought and paid for.

Michael Gove, former Secretary of State for Levelling Up, Housing and Communities, who is stepping down as an MP, promised this rent would be capped at a peppercorn and, after tussles with his own party, it was agreed that this would be £250 per annum.

Owners of the freeholds opposing the change, argue that the measures are unfair and would reduce the value of their investments.

The hope is that the issue of ground rent can be tackled afresh when the new government is elected in July

The message from Number 10 before the dissolution of Parliament was that “it would not be right to ask peers to vote on this without allowing them to properly consider these proposals. “It’s not possible to deliver all of our commitments during this wash-up period.”

For now, The Department for Levelling Up, Housing and Communities say that leasehold homeowners will receive more rights, power and protections over their properties under the Leasehold and Freehold Reform Act.

It adds that The Act will make it easier and cheaper for leaseholders to buy their freehold, increase standard lease extension terms to 990 years for houses and flats, and provide greater transparency over service charges.

The Act will also remove barriers for leaseholders who need to challenge their landlords’ unreasonable charges at a tribunal.

The sale of new leasehold houses will be banned other than in exceptional circumstances, excessive buildings insurance commissions for freeholders and managing agents will end, and the requirement for a new leaseholder to have owned their house or flat for two years before they can buy or extend their lease wil be scrapped.

The new powers will also grant freehold homeowners on private and mixed tenure housing estates the same rights of redress as leaseholders and equivalent rights to transparency over their estate charges.

Leaseholders in some apartment buildings have been barred from taking over the management of the site or buying its freehold if more than 25 per cent of its floor space is commercial so this limit will be changed to 50 per cent.

The Act, when it receives Royal Assent, should also make it easier and cheaper for leaseholders to take over management of their building, allowing them to appoint the managing agent of their choice.

It will also mean that leaseholders will no longer have to pay their freeholder’s costs when making a claim against them.

The Act also dictates that every new house built in England and Wales will be freehold.