Campaigners have welcomed the government’s plans to reform leasehold land, even if some measures do not go as far as previous proposals.
In the King’s speech yesterday, the government revealed it would legislate to “end the feudal leasehold system” by “banning the sale of new leasehold flats, so that common property becomes the standard tenancy”.
The new government promised to tackle the ground rents for existing buildings leaseholders “so that they are no longer confronted with unregulated and unaffordable costs”.
But after former Housing Secretary Michael Gove failed to implement many of the reforms he had hoped to implement, the new government’s plans have scrapped some measures that could have led to legal action.
The Leasehold Knowledge Partnership says that zeroing out ground rents, as Gove originally planned, would “almost certainly lead to legal action from freehold owners on human rights grounds”.
But LKP director Sebastian O’Kelly is generally satisfied with the government’s plans.
He said: “Labour has said it will complete the reforms that the Conservative government has not completed, even though it has been sitting on the Law Commission’s blueprint for reform since 2020.
“I exclude Michael Gove from criticism, but Number 10 had limited enthusiasm and opportunities were wasted.
“Labour has committed to completing the right to vote and the right to manage reforms that were missing from the Leasehold and Freehold Reform Act 2024, which was passed in short form just before the election.”
O’Kelly welcomes Labour’s pledge to end “the disproportionate and draconian threat of forfeiture as a means of ensuring compliance with a lease” – putting leaseholders who refuse to pay sky-high charges at risk of losing their homes to lose.
On this, he says that there has been “an almost universal consensus for almost twenty years, but nothing has been done despite a 2008 Law Commission report”.
The government also pledged to “consult on how best to tackle the inequities of private housing estates” – where homeowners could end up facing huge extra costs for maintenance.
O’Kelly says: ‘These are aimed at younger, new home buyers who pay fleece costs on top of council tax, while older owners of older, owner-occupied homes do not.
“Boards and house builders are complicit in setting up these management companies, which provide a legally enforceable income stream.
“So our cartel of housebuilders has created yet another income-eroding element in their customers’ home purchases, which is now happily traded among ‘entrepreneurs’ who are so devastating the housing industry.”