A property rights campaign group is calling on the Government to take a “measured and evidence-led” approach to leasehold reform ahead of the anticipated Leasehold and Commonhold Reform Bill in the King’s Speech.
Justice for Property Rights says it supports efforts to modernise the system but warns that sweeping changes could create unintended consequences for small investors and undermine confidence in the UK’s property framework.
The group, which represents a coalition of property owners, pensioners and small-scale investors, says much of the debate has focused on large institutional freeholders, while overlooking individuals who rely on ground rent income as a stable long-term return.
It argues that while reforms are needed to address unfair practices, particularly around escalating ground rents, blanket measures risk penalising lawful arrangements that have already been subject to increased scrutiny and regulatory intervention in recent years.
LOSS OF INCOME
A key concern is the potential for policy changes, such as caps or the removal of ground rents, to create significant shifts in value across the market. The group warns that poorly targeted reform could result in financial gains for wealthier leaseholders, including overseas investors, while removing income from UK-based individuals.
Justice for Property Rights also highlighs the lack of clarity around compensation, warning that the absence of a defined framework for assessing “fair value” could lead to legal challenges and reduced investor confidence.
FAIR TREATMENT
A spokesperson for the group says: “Reform must not come at the expense of ordinary savers. Thousands of individuals have made lawful investments based on clear contractual terms. Any changes must respect those rights and provide fair treatment.
“This is not simply a question of freeholders versus leaseholders. Without careful design, reforms could result in large-scale transfers of value to those least in need of support.
“Reform what is unfair, but respect what is lawful. That principle must sit at the heart of any new legislation.”
The group is calling for targeted reform focused on abusive practices, alongside protections for smaller investors and a clear, legally robust compensation mechanism, as the Government moves forward with its plans to reshape the leasehold system and transition towards commonhold.
