Housing minister Matthew Pennycook has admitted the government won’t be able to abolish the leasehold system until after this Parliament.

However, Pennycook insists he won’t be deterred by litigation or the Lords and explains that there is a need for both primary and secondary legislation in order for it to be dismantled.

“It took 29 years from 1896 to 1925 to put the modern leasehold system in place through the Law of Property Act - this Labour government is going to bring the leasehold system to an end in just five,” he says.

Pennycook says in making its manifesto commitment, the party was not promising to immediately abolish leasehold outright. “Those advocating for such an approach cannot answer how it would be lawful; how the impact on the mortgage market would be managed; how it would even be feasible for the land registry to delete millions of leasehold and freehold titles and replace them with commonhold ones overnight.”

Measures

He says it will implement measures in the Leasehold and Freehold Reform Act 2024 that make enfranchisement cheaper and easier, acknowledging that it had been constrained from doing this because the Act contained a small number of specific flaws, which it plans to rectify through the Commonhold and Leasehold Bill.

Containing about 260 clauses and 20 schedules, it means this will have to be done through separate primary legislation, but he adds it will honour its manifesto commitment to enact remaining Law Commission recommendations on enfranchisement and Right to Manage during this Parliament.

The draft Bill includes clauses to ban the use of leasehold for new flats – complimenting the ban on new leasehold houses already on the statute book. The government also plans to cap ground rents, encourage residents to convert their existing leasehold homes to commonhold, which allows flat owners to own and manage their buildings jointly, and bring in measures to boost shared ownership schemes.

Propertymark

Timothy Douglas, head of policy and campaigns at Propertymark, says leasehold reform remains an extremely challenging area. “Recent Propertymark data highlighted that 76% of our member agents raised that leasehold properties have become more difficult to sell in the past 24 months,” he adds. “This clearly demonstrates the wider scale issues faced within the marketplace and the detrimental effects to consumers present in the existing leasehold system. These issues must be addressed to support the sale of leasehold flats.”

‍

‍