To ask Her Majesty's Government what assessment they have made of the claims by some large freeholders and hedge funds that the abolition of (1) ground rents, and (2) marriage value, will breach their human and property rights under the European Convention on Human Rights.
10 June 2021
The Government is committed to promoting fairness and transparency for homeowners and ensuring that consumers are protected from abuse and poor service.
Under the current system, too many leaseholders find the process for extending their lease or buying their freehold (a process known as enfranchisement) too complex, lacking transparency and prohibitively expensive.
We will reform the process of enfranchisement valuation that leaseholders must follow to calculate the cost of extending their lease or buying their freehold. The Government will abolish marriage value, cap the treatment of ground rents at 0.1% of the freehold value, and prescribe rates for the calculations at market value.
These changes to the enfranchisement valuation process will result in substantial savings for some leaseholders, particularly those with less than 80 years left on their lease. Our reforms to enfranchisement valuation also ensure that sufficient compensation is paid to landlords to reflect their legitimate property interests.
In line with usual practice, the Government’s intention would be to publish an impact assessment and a section 19(1)(a) Human Rights Act 1988 statement on our leasehold reforms as part of taking primary legislation through Parliament.
The Leasehold Reform (Ground Rents) Bill, introduced into Parliament on 12 May, will make homeownership fairer and more transparent for thousands of future leaseholders, by legislating to prevent landlords under new residential long leases from requiring a leaseholder to pay a financial ground rent.
The Government considers the provisions of the Leasehold Reform (Ground Rent) Bill are compatible with the European Convention on Human Rights (ECHR).
Specifically, we consider that the Bill engages with the following ECHR rights: Article 6: right to a fair trial; and Article 1 of Protocol 1: protection of property, that the proposals are compatible with the ECHR, and that any interferences can be justified.