Lord Moylan:

Moved by Lord Moylan

29: Schedule 4, page 168, line 31, leave out sub-paragraphs (3) and (4)Member’s explanatory statementThis Amendment would remove the cap on ground rent for the purposes of enfranchisement calculations.

My Lords, there has been a number of groups concerning marriage value and I have not spoken in them, because I thought I would save my remarks for now. It is quite clear that what the Government are proposing is simply expropriation—there is no other word for it—and it is one of the two most objectionable features of this Bill. The second is the one I come to now, as the subject of these amendments, which relate to the setting of a cap on ground rents for valuation purposes.

It will perhaps help some noble Lords if I say that, when I have mentioned this Amendment, some people have asked me, “Why are you talking about ground rent when the Bill doesn’t introduce the expected cap on ground rents?” It is the cap on ground rents payable that is not introduced. However, in Schedule 4, there are provisions whereby the Government determine what the ground rent should be treated as for the purpose of valuations in the event of a leasehold enfranchisement or a lease extension. These two amendments would simply remove that cap.

What is happening, put very simply, is another form of expropriation. Quite simply, the ground rent that the tenant has signed up for and which the freeholder has a legitimate expectation of should be ignored in the assessment of valuations for the purposes I mentioned a moment ago and should be set at 0.1% of the property’s market value as a cap. As I say, this is simply another unwarranted interference with property rights, with almost no understanding or explanation on the part of the Government of what the practical effects will be on the interests of legitimate freeholders, which include pension funds, charities and other parties.

With that, I shall sit down since I do not expect my noble friend to give way on the matter, but I think it is very important that the point is made: this is another of the two most odious provisions in the Bill.

My Lords, I thank my noble friend—if I can still call him that—Lord Moylan for these amendments. As I made clear in Committee, the Government have made their intention to make enfranchisement cheaper and easier for leaseholders explicitly clear.

There has been much discussion of ground rents and the incidences where they cause difficulties for leaseholders. The provision in the Bill to cap ground rent in enfranchisement calculation at 0.1% of the freehold vacant possession value is an important measure to ensure that leaseholders with relatively high ground rents do not find the cost of enfranchisement prohibitively expensive. These amendments would be counter to that objective so, with respect, I ask my noble friend Lord Moylan to withdraw his Amendment.

My Lords, I beg leave to withdraw the Amendment.

Amendment 29 withdrawn.

Amendment 30 not moved.