SCRAPPING LEASEHOLD FOR NEW FLATS ISN’T ENOUGH – WHAT ABOUT THOSE ALREADY TRAPPED?
If delivered, yesterday’s announcement that the government is to compel commonhold on all new flats will stop the next generation of homebuyers from having their wealth plundered by mysterious, often offshore freeholders
This long overdue move will drag England and Wales into line with the rest of the world where flat owners are in control of their homes, money and lives under commonhold equivalents, including condominium in North America, Italy and Thailand, and strata title in Australia, New Zealand, Singapore and Dubai.
But for the 5.3 million households already subject to this exploitative and antiquated leasehold system, the white paper is fuelling anxiety.
Banning leasehold for new flats while being vague on when and how those already trapped can convert to commonhold will create a two-tier flats market. Already, the price gap between freehold houses and leasehold flats is at a thirty-year high, making us an outlier in the Anglosphere.
Collapsing consumer trust in our apartment market reflects growing concerns over the unfairness and unpredictability of leasehold service charges dictated by outside and unaccountable monetising freeholders.
Introducing commonhold on new developments without an assured pathway for existing leaseholders to convert to commonhold risks deepening this disparity, leaving millions under the rule of predatory freeholders.
The government cannot be allowed to repackage recommendations from the Law Commission - first published half a decade ago - as a bold new policy package while asking leaseholders to wait an entire parliament for action. If the case for reform was clear then, it is even more urgent now. The delay is indefensible.
Back in 2022, with two years remaining in the last parliament, Matthew Pennycook, then shadow housing minister, rightly lambasted the Conservative government for foot-dragging, stating leaseholders are being left “too long to wait”. We agree. In power, Labour must hold itself to the same standard.
That’s why we are calling for the promised Leasehold and Commonhold Reform Bill to be enacted no later than the next parliamentary session in 2025/26. Anything less would be a betrayal of the millions still trapped in this corrupt rentier system.
Commonhold on all new flats is far from radical and is yesterday’s debate. In fact, it was promised thirty years ago by Blair’s Labour in 1995, in a now-deleted document called “An End to Feudalism”. Of course, Labour did not honour this commitment during their 13 years in power. Instead, millions more leasehold debt traps were created.
The history of leasehold is that leaving reforms to the second half of a parliament means precious time and political capital runs out. On this agenda, Labour must disrupt or be disrupted.
Commonhold should be for the many, not just the new. As the party traditionally associated with economic justice, Labour will be judged on how they emancipate existing leaseholders, not the ones that haven’t been born yet.
Harry Scoffin is a housing campaigner and the founder of Free Leaseholders, a pressure group promoting leasehold reform.
