Reforms to leasehold in England and Wales became law on Friday, but a promise to cap ground rents has been dropped.
The Leasehold and Freehold Reform Bill was one of the bills that were rushed through Parliament before it shuts down for the general election on July 4.
The government said homeowners will receive more rights, power, and protections under the new law, amid a warning that it’s “not the revolution that many leaseholders across the country have been desperate for.”
Leasehold is a quasi-homeownership in which a leaseholder doesn’t own their home outright but has a tenant-landlord relationship with a freeholder, who owns the land.
Leaseholds have the right to live in a property for a fixed number of years they also have to pay ground rents and service charges to the freeholder.
Reforms in the act include increasing the standard lease extension term to 990 years, requiring a standard format for service charge bills to improve transparency, and making it easier for leaseholders to take over management of their building from the freeholder.
However, a previous plan to cap ground rents was not included, neither was any change to forfeiture, which means a leasehold can lose the value of the whole property because of a dispute over a much smaller bill.
In February, MPs urged the government to go further to restrict ground rents for existing leases and end forfeiture, with housing minister Lee Rowley pointing to ongoing consultations.
Speaking on Friday at the report stage, Labour frontbencher Lord Kennedy of Southwark said of the legislation: “This is far, far short of what was promised … and the government should be ashamed of the fact, the way it has behaved over the last few years, and behaved over this Bill, making promise after promise after promise, and delivering very, very little.”
Conservative whip Lord Gascoigne replied: “This is a good Bill as it stands, the government wants to see it through.”
Intervening, Lord Kennedy pushed the minister to confirm whether there is “nothing on forfeiture and nothing on ground rents as promised in this bill.”
Lord Gascoigne confirmed that these were not included in the legislation.
Conservative Lord Bailey of Paddington said while the bill was “the only game in town,” it was “suboptimal” and “not the revolution that many leaseholders across the country have been desperate for.”
Other Tory peers accused the government of “rushing through” attempts to implement the legislation.
They argued that the legislation was not initially mentioned in the list of bills to be pushed through before Parliament is dissolved for the election, and warned that parts of it are likely to be challenged in the courts.
Tory frontbencher Baroness Williams of Trafford said she does “utterly appreciate the frustration” of certain bills being included, or not being included, but said it has been agreed between the government and the opposition which ones would be prioritised.
Elsewhere on the final day of the session, the Victims and Prisons Act—which paves the way for the establishment of the independent Infected Blood Compensation Authority—cleared both Houses.
The Pet Abduction Act also cleared all parliamentary stages, with Conservative peer Lord Lexden labelling it an “important day for animal welfare.”
Criminals face up to five years in jail for abducting cats and dogs under the legislation.
The Paternity Leave (Bereavement) Act, which closes a loophole to ensure working fathers who lose their partner in childbirth will be given the right to “day one” paternity leave, cleared Parliament.
Measures to provide a new and easier route for Irish nationals who have lived in the UK for five years to register for British citizenship also received the backing of Parliament.
But Prime Minister Rishi Sunak’s flagship Tobacco and Vapes Bill—designed to ban young people from ever being able to smoke tobacco legally—did not re-emerge on the final day.
The Renters Reform Bill, which was expected to pave the way for an end to section 21 no-fault evictions, was also axed.
