In Britain, houses are generally sold as freehold, where the owner has control over the property and the land on which it stands, or as leasehold, where the buyer only owns the right to occupy a house, while paying costs such as ground rent to the freehold owner.This structure means that millions of people do not own the land beneath their homes and could face rising fees or restrictions imposed by landlords.
PARTY DIVISIONS ON HOW TO GAIN BACK YOUR SUPPORT
The move is likely to reassure lawmakers on the left of Starmer’s Labor Party after a drop in support following a landslide victory in 2024, and as members are divided over how to regain voters’ trust.
However, homeowner groups said a retroactive cap would amount to an unprecedented interference with existing real estate contracts.
M&G, one of Britain’s largest asset managers, said in a statement that the changes would harm savers and companies investing in British assets and would set “a worrying precedent” for the country’s reputation as a stable investment location.
THE SYSTEM THAT GOES BACK TO MEDIEVAL LAND LAW
Land rent in Britain had its origins in medieval feudalism, evolved from landowners charging fees for land use, and was formalized in the 1920s as long-term residential tenancies.
The reform will apply to more than 5 million leaseholders in England and Wales and will ultimately reduce permitted ground rents to a nominal ‘peppercorn’ after 40 years, the government said in a statement.
“This is a promise we said we would deliver on and I’m really pleased we’re delivering on it,” Starmer said in a TikTok video announcing the limit.
The plan could save some families thousands of pounds over the life of their lease and help unblock stalled house sales due to high or escalating ground rent clauses, the government said. The government said it would also ban new rental apartments.
($1 = 0.7309 pounds)
#Great #Britain #limit #land #rent #renovating #real #estate