Potential changes to leasehold reform bill could "water down" ground rent reduction

Initially aiming to reduce ground rents to zero, the Treasury's concerns over impacts on pension and insurance funds prompt a new plan: capping ground rents at £250 and phasing them out over 20 years.

Mark Chick of Bishop & Sewell LLP and ALEP emphasises the complex considerations behind this move. While some advocate for a complete ground rent ban, the government weighs human rights implications and potential compensation claims. The proposed £250 cap raises questions about fairness and regional variations. Additionally, uncertainty looms over the duration of the phasing-out period and its impact on freehold values.

The government's approach reflects a delicate balance between property rights and financial implications. Further clarity is expected post-consultation.