Propertymark has welcomed government plans to introduce new legislation to further reform the leasehold system.
A bill to phase out some leaseholds in England and Wales will be included in the King’s Speech next week, the housing minister Rachel MacLean confirmed last weekend.
The speech on 7 November, which sets out government plans for the coming year, will include the long-promised change to the controversial leasehold system, which has seen expensive fees imposed on homeowners.
The bill is expected to ban leaseholds for new houses, but not new flats.
The new bill would “restore true home ownership to millions of people and end the reign of rip off freeholders + incompetent profiteering management companies”, said MacLean in a social media post.
She did not provide further details, but posted a link to an article in the Sunday Times which reports that the UK Government would cap all existing ground rents at a very low rate, known as a “peppercorn” rate, and extend the standard contract lease extension from 90 years to 990 years.
The Department for Levelling Up, Housing and Communities (DLUHC) estimates that there are almost 5 million leasehold homes in England, 70% of which are flats. Almost all flats are sold on a leasehold basis compared to 7% of houses.
Shadow minister for Levelling Up, Housing, Communities and Local Government, Matthew Pennycook, responded to the announcement by stating that if no further measures will form part of the King’s Speech leaseholders will have been failed, adding that Labour would fundamentally and comprehensively reform the leasehold system.
But Timothy Douglas, head of policy and campaigns at Propertymark, has welcomed the proposals.
He said: “Many agents and leaseholders will be relieved to hear of plans for new legislation to further reform the leasehold system. Enfranchisement must be made easier, loopholes in redress must be closed, ground rent restrictions must be extended, and the UK government must ensure any legislation to abolish leasehold improves consumer confidence and is fit for purpose.”
Leasehold law to feature in King’s Speech, housing minister confirms
