CILEX comments on the ban on ground rent for new residential leases coming into force

CILEX  (Chartered Institute of Legal Executives) comments on the ban on ground rent for new residential leases in England and Wales, which comes into force on Thursday (30 June 2022).

CILEX head of policy Jonathan Walker says:

“The ban on ground rents is positive news for anyone considering buying a leasehold property and important progress towards ensuring safety and security for all householders.

“Problems still remain however, and it is disappointing that there is no retrospective inclusion of current leasehold tenants within the Act. They will still be obliged to pay their existing rents, even in cases where they are seeing those rents escalate – some doubling every ten years.

“Those attempting to sell on properties will find ground rents prove unattractive to buyers who now have the option of purchasing a rent-free leasehold property, and many will experience difficulties when looking to remortgage, or extend or vary their existing leasehold.

“Such fundamental changes to the leasehold market must be implemented alongside awareness raising and education amongst both consumers and professionals so that both understand the implications for property transactions.

“It is vital that we see a continued programme of reform that benefits those who are new to the leasehold market whilst not disadvantaging or restricting those currently within the system. We hope to see further measures to address residential leasehold houses and cap ground rent for all existing leasehold properties.”

Kindly shared by Chartered Institute of Legal Executives (CILEx)