Jas Athwal MP has said he will intervene in a ground rent dispute after a homeowner in an Ilford block claimed lease terms had left some leaseholders struggling to sell their flats.
According to one leaseholder in the block of 122 flats, which we are not naming at their request, properties are subject to “onerous” ground rent clauses that increase every five years by the retail price index (RPI).
This has allegedly left some homeowners unable to sell, with the ground rent clause breaching some banks’ lending terms for prospective buyers.
Nationwide declines mortgages where the ground rent review period is less than or equal to five years, and Barclays generally stipulates that ground rent must not exceed 0.1 per cent of the property’s value.
For one property in the Ilford block, ground rent has risen from £400 in 2018, to £519.64 in 2023.
The Land Registry lists Emerald Ground Rent Trustee 1 and Emerald Ground Rent Trustee 2 as the owners of the block.
Gary Dalton, 48, rents out his property in the block, but had hoped to sell it in order to buy a larger home for his family, who are renting outside of London.
He wrote to Mr Athwal at the end of March on behalf of desperate leaseholders, pleading with the Ilford South MP to do anything he could to help vary the terms of the ground rent clauses in their leases.
Mr Athwal, landlord of 15 rental homes in London, was himself forced to apologise last year after a BBC investigation found black mould in some of his properties.
Mr Dalton has claimed that the lease terms had left some leaseholders struggling to sell their flats. Those that had sold had done so at a loss, he added.
“We are all in a bit of limbo – we can’t move on with our lives,” Mr Dalton said.
“We are at our wits' end. The only way of resolving this is to remove this onerous clause in our lease, which is affecting our ability to sell the property.”
Mr Dalton added that MPs had successfully intervened in the past to force freeholders to change the terms of constituents’ leases with “onerous” ground rents.
In 2019, Conservative MP Stephen McPartland brought attention to ground rents that affected 150 homeowners in Stevenage, and freeholder Adriatic Land later altered their leases.
Landlords are already prevented from requiring a leaseholder to pay a ground rent under most residential long leases that started after June 2022, but earlier leases are not covered by these rules.
Leaseholders had also asked Mr Athwal to write to housing minister Matthew Pennycook MP to ask for the publication of the results of a consultation on ground rent reform.
They also said they wanted “clarity” on when the government would bring forward its manifesto commitment to “tackle unregulated and unaffordable” ground rent charges.
After the Recorder contacted Mr Athwal’s office, it confirmed that the MP had responded to leaseholders but declined to comment further.
But having seen the MP’s response, we can report that Mr Athwal told leaseholders that he had written to Mr Pennycook backing their calls for “immediate action to end ground rents, reform leaseholds and provide justice for those who have been effected by them”.
Harry Scoffin, the founder of the campaign group Free Leaseholders, said: “Ground rent grazing is destroying lives in Ilford and across the country.
“By directly intervening on behalf of his leaseholder constituents to end a ground rent scandal, Mr Athwal is showing he is sincere in his commitment to championing tenants’ rights.”
A Ministry of Housing, Communities and Local Government spokesperson said: “Far too many leaseholders across the country are being asked to pay unreasonable and extortionate charges.
“We remain firmly committed to tackling unregulated and unaffordable ground rents, and we will deliver this in legislation with further details set out in due course.”
Emerald Ground Rent has been approached for a response through Living City, which collects ground rent payments on the landlord's behalf.
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