The government has finally delivered a timetable for reforming the ‘feudal’ leasehold system in England and Wales, but some campaigners have again accused Labour of procrastination.
In a statement to parliament, housing and planning minister Matthew Pennycook said the government plans its own white paper on reforms to commonhold for early next year. An ‘ambitious’ Leasehold and Commonhold Reform Bill will follow in the second half of 2025.
There is also unfinished business from the last parliament. Residents groups have been calling on ministers to enact secondary legislation needed to enforce the previous government’s Leasehold and Freehold Reform Act, which was passed ahead of the dissolution of parliament before the general election. Among other things, the act would ban developers from selling new houses as leaseholds, make it cheaper to extend a lease, increase the standard lease length to 990 years and make it easier for leaseholders to take control of managing their buildings.
In a statement to parliament yesterday, housing and planning minister Matthew Pennycook said that while that legislation does not go far enough, it did introduce ‘necessary’ reforms that the Labour government intends to implement as soon as possible. However, Pennycook said he must balance ‘speed with care’ after ‘serious flaws’ were identified in the act. Some of these will have to be remedied through primary legislation.
Those flaws include a loophole that means the act goes ‘far beyond’ the intended reforms to valuation; and an omission that would deny ‘tens of thousands’ of shared ownership leaseholders the right to extend.
There will be further consultation in several areas. These include service charges, legal costs and opaque commissions for landlords.
Pennycook added that the act did not go far enough because it overlooked a number of Law Commission reform recommendations. A ‘central focus’ of next year’s bill will be ‘reinvigorating commonhold through the introduction of a comprehensive legal framework’. The government will take ‘decisive first steps’ to make commonhold the default tenure by the end of this parliament. The bill will also consider ‘vital’ reforms to the existing leasehold system, including tackling ‘unregulated and unaffordable’ ground rents.
‘We are determined to end the injustice of “fleecehold” entirely,’ he added.
Campaign group Free Leaseholders tweeted: ‘Our worst fears about dither & delay have been confirmed today. Instead of ruthless delivery and taking on vested interests, this government appears to be burying leaseholders, the victims, in multi-year consultations.’
However Catherine Williams, co-founder of the National Leasehold Campaign, tweeted: ‘This] statement that has more clarity on the timeline we asked for. Your explanation why some aspects of LFRA need further work seem reasonable We hoped consultation days were over but wont balk at more if the end result abolishes #leasehold for ever.’
Mark Chick, partner at London firm Bishop & Sewell and director of the Association of Leasehold Enfranchisement Practitioners, said: ‘It is clear that government recognises that changes to leasehold legislation are more complex than were first envisaged and we welcome the acknowledgement by the minister that there are specific and serious flaws within the legislation which must be resolved.’
