A bill to phase out some leaseholds in England and Wales will be included in the King’s Speech tomorrow, but the long-promised change to the controversial system, which has seen expensive fees imposed on homeowners, is only expected to include new houses, and not flats, and that could prove a problem for the government.
The housing department estimates that there are almost 5 million leasehold homes in England – 70% of which are flats – and that is why Tory MPs plan to challenge the government if the planned leaseholds ban does not apply to flats.
According to The Guardian, Conservative backbenchers are prepared to bring amendments to the long-awaited leasehold reform bill, which will be one of the centrepieces of next week’s king’s speech but will not end leasehold on the majority of properties.
Several senior Tories said they wanted the government to end leasehold for new houses and flats, and were willing to bring their own amendments to the bill if it failed to do so. With Labour backing these MPs, they could even force a government U-turn or defeat.
Peter Bottomley, the longest-serving MP in the House of Commons, said: “If the government has not included in the bill things that are clearly necessary, both the Lords and the Commons will improve it. If anything is left out of the bill, it can be and will be improved.”
An unnamed Tory MP, who is helping organise the resistance to the government’s plans, added: “If this bill does not include flats, I absolutely will seek to amend it. If you’re buying a flat in a 50-apartment block, then there must be a way of doing it so that people can still own their own property and not be at the beck and call of a freeholder.”
Matthew Pennycook, the shadow housing minister, said Labour would back attempts to ban leasehold for new flats.
“It is deeply disappointing that the government appears set on legislating only for new houses to be sold as freehold, leaving those who buy flats trapped in an archaic system of home ownership,” he said.
“Labour believes commonhold should be the default tenure for all new properties, with the system completely overhauled so that existing leaseholders can collectively purchase more easily and move to commonhold if they wish.”
Harry Scoffin, a co-founder of the campaign group Commonhold Now, commented: “A failure to ban leasehold on new-build flats would be a betrayal of everything the government has promised since 2017. Doing so would cost the Treasury nothing and, crucially, stop yet more unsuspecting flat buyers from being sucked into the leasehold debt trap.”
Responding, a spokesperson for the Department for Levelling Up, Housing and Communities said: “We have already made significant improvements to leasehold – ending ground rents for most new residential leases, and will make it easier and cheaper for leaseholders to extend their lease or buy their freehold.
“The secretary of state has been clear that we will bring forward legislation to protect leaseholders as soon as is possible.”
“If this bill does not include flats, I absolutely will seek to amend it. If you’re buying a flat in a 50-apartment block, then there must be a way of doing it so that people can still own their own property and not be at the beck and call of a freeholder.”
Surely you need a workable replacement in place before leaseholds for flats is banned.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
There is, and it’s been there since 2002. It’s called ‘Commonhold’. If a block of leaseholders can work together to achieve RTE, the freeholder’s involvement, and that of their rip-off managing agent, ends. Even if RTM is achieved, leaseholders find their bills are dramatically reduced, service levels are better, and the appearance and facilities of the common parts improves… because they are in control.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Leasehold is ridiculously complicated and is affected by at least 50 previous Acts of Parliament.
There is no magic wand to be able to replace it in a hurry.
It needs to be dealt with urgently. It needs to go.
But under no circumstances should it be rushed. You might say that they’ve been working on it since 2017 which technically they have. But they haven’t actually done 6 years worth of work on it. Perhaps 6 months if we’re lucky.
Interestingly, all leasehold reform has happened in they last year of a failing Tory government.
I wonder why…!
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
The APPG on leasehold reform has been united in its aim of abolishing leasehold, starting with major reform… for existing leaseholders, because they are the ones suffering. Last year, leasehold for new build houses was banned, yet we are still hearing about leasehold for new houses being banned! That didn’t cost anything and doesn’t affect freeholders because they don’t yet own the freehold. It does affect developers because they can no longer monetise the freehold by selling it on at the leaseholder’s expense.
Any reforms announced in the King’s Speech must include significant improvements for existing leaseholders, starting with making it quicker, easier and cheaper to extend a lease and reset ground rent to zero (that would free up the sale/purchase of flats); making it quicker, easier and cheaper to buy the freehold; the immediate ending of the ‘marriage value’; making it easier, quicker and cheaper to achieve RTE and RTM; and ending the inequity of leaseholders having to pay freeholder’s legal costs, even when a freeholder loses a case.
#NationalLeaseholdCampaign
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Gove taking the easy route by tackling houses. Flats are a little more complicated. I had a buy-to-let where the original freehold company had disappeared. We had to buy it from the government on a Bona Vacantia basis. Of the four flats, three chipped in so became freeholders. The fourth flat then insisted that they should attend freehold meetings. We let them attend, but not vote. Thankfully it is now sold, one let rental unit thanks to government legislation over the last couple of years.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Leasehold does have a myriad of issues, no-one is arguing that. However, how are they going to remove and replace it? As I understand it, every piece of land has to be owned by ‘someone’. So who is going to own the land a block of flats sits on? The answer is never going to be easy, or make everyone happy.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register