The government is no longer planning to abolish the leasehold system in England and Wales this year, it has been confirmed.
Michael Gove, Secretary of State for Levelling Up, Housing and Communities, previously pledged to scrap the “outdated, feudal” system as part of the next phase of leasehold reform being introduced by the government.
However, following a reported battle between Number 10 Downing Street and his department, the plans have been shelved.
Measures that are, however, expected to materialise include a cap on ground rents, increased control for tenants over property management companies, and a ban on leaseholders paying legal costs following a dispute.
Katie Cohen, residential property partner at Keystone Law, described Gove’s commentary on leaseholds earlier this year as “unhelpful, short-sighted, and without any guidance”:
“It sent many leaseholders undertaking statutory lease extension claims into a frenzy with clients withdrawing notices on a whim that leasehold would be abolished.”
Yet according to Cohen, leasehold reform is welcomed by the majority of practitioners:
“There are far too many pitfalls for the unwary and the system as whole needs reformation to make the process simpler for leaseholders to acquire their freeholds or extend their leases.”
However, Cohen said the idea of abolishing leasehold overnight is “completely unrealistic”. This sentiment was echoed by the Association of Leasehold Enfranchisement Practitioners (ALEP), who said the complexities of the system made abolition this year an impossibility. Mark Chick, ALEP Director and Senior Partner at Bishop & Sewell, said:
“Leasehold is an incredibly complex area of the law which has developed over centuries, and it cannot simply be abolished or replaced overnight…
… It is preferable that the Government takes its time to consider and consult on all aspects of the intended reforms, rather than rushing out unfinished or extemporaneous legislation that is not fit-for-purpose, and which could cause unintended confusion and harm.”
On the next phase of reform – details of which are expected in the King’s Speech later this year – Katie Cohen said:
“As ever, the devil will be very much in the detail concerning the proposed reforms. It has been difficult to effectively advise clients as to their next steps without any real steer as to the likely changes to be announced.
Whilst it is hoped that changes will be brought in quickly, in reality this will take time. There will be much debate on both the freeholder and leaseholder side to achieve a mutually acceptable and working piece of legislation that balances the interests of both sides.”
3 responses
If there was the will to remedy the problems with leasehold, it could be done relatively easily. However, as many MPs are landlords which produces them considerable income, it isn’t going to happen. What a surprise.
And how many of the big freeholders are Conservative Party donors? Plenty.
The attempt to replace leasehold with commonhold at the beginning of the century never took off. So what’s new?