Latest news with #LeaseholdandCommonholdReformBill
The Independent
03-03-2025
- Business
- The Independent
New leasehold flats to be banned – what will it mean for home buyers?
The government is poised to revolutionise homeownership in England and Wales by banning new leasehold flats and making commonhold the default tenure. The move promises to empower homeowners with greater control over their properties, effectively dismantling a system long criticised for its archaic practices. Housing Minister Matthew Pennycook heralded the reforms as the "beginning of the end" for the "feudal" leasehold system, which he condemned for subjecting homeowners to "unfair practices and unreasonable costs." Currently, leasehold ownership allows third-party landlords to own a building's lease, granting them significant decision-making power over the homeowners residing within. This proposed shift aligns with the government's manifesto commitment to abolish the leasehold system and empower residents with direct control over the management of their buildings. The transition to commonhold ownership will grant homeowners collective ownership of the freehold, eliminating the intermediary landlord and fostering greater autonomy in building management. Homeowners will not have to pay extra costs such as ground rent under the proposed reforms. A Commonhold White Paper published on Monday states commonhold will be 'reinvigorated' through a new legal framework and the sale of new leasehold flats will be prohibited. Mr Pennycook said: 'This Government promised not only to provide immediate relief to leaseholders suffering now but to do what is necessary to bring the feudal leasehold system to an end – and that is precisely what we are doing. 'By taking decisive steps to reinvigorate commonhold and make it the default tenure, we will ensure that it is homeowners, not third-party landlords, who will own the buildings they live in and have a greater say in how their home is managed and the bills they pay. 'These reforms mark the beginning of the end for a system that has seen millions of homeowners subject to unfair practices and unreasonable costs at the hands of their landlords, and build on our Plan for Change commitments to drive up living standards and create a housing system fit for the twenty-first century.' The Government has also said it is 'determined' to make conversion to commonhold easier for existing leaseholders. A draft Leasehold and Commonhold Reform Bill, which will include the detail of how reformed commonhold will work, will be published later this year, the Ministry of Housing, Communities and Local Government has said. Legislation will apply to England and Wales, where there are around five million leasehold homes.
Yahoo
03-03-2025
- Business
- Yahoo
Ministers outline plans to ban new leasehold flats
Ministers have outlined plans to abolish the leasehold system in England and Wales. Proposals to change the law would ban the sale of new leasehold flats. Under the leasehold system, third-party landlords known as freeholders own the building and a leaseholder buys the right to occupy a flat within it for a fixed time period. The government said it wanted to move to a way of building homes that was more in line with the rest of the world, known as commonhold, where homeowners owned a share of and had control over buildings they lived in. But freeholders said leasehold was the "most effective way of managing large complex apartment buildings". A white paper published on Monday stated the sale of new leasehold flats would be banned and commonhold "reinvigorated" with a new legal framework. A draft Leasehold and Commonhold Reform Bill - including the detail of how the new system would work - will be published later this year, the government has said. New legislation would apply to England and Wales, where there are around five million leasehold homes. Housing Minister Matthew Pennycook said reforms would put an end to "unfair practices and unreasonable costs at the hands of landlords". Leaseholders can feel like they have no control over costs for repairs and maintenance of the outside of their building. Around 1,000 people contacted the BBC after a BBC investigation about service charges in leasehold blocks last year. Kasia Tarker bought a one-bedroom flat in Southall, West London, in 2022. Her service charge bills have increased from roughly £65 per month in 2022 to more than £200 per month this year. She said she felt helpless and could not afford the charges. "I am going have to try and sell the flat or become homeless, I don't know what I am going to do." FirstPort, who took over management of Kasia's development in 2023, said the "increases in areas such as insurance and health and safety costs" were beyond its control. Kasia said she would like more control over her service charges but the government's commonhold proposals were for new builds, so would not help her in her current situation. Jean Hopkin, another leaseholder who got in touch with the BBC, said the service charge for her three-bedroom flat in Sheffield had increased 356% - from £106 a month to £483 in four years - and was unsellable because of the high charges. Jenny Baker in Southampton is also struggling to find buyers because of "unjustified" service charges that have gone up to £7,200 a year. "The state of the apartment block is just terrible. The windows don't get cleaned and there's black mould on the outside of the building - what on earth am I paying for? "I feel stuck – I can never come out of it. I feel like I have absolutely no control, and it makes me feel really anxious." Rendall & Rittner, which manage Jean and Jenny's buildings, said the company did "not profit from or mark up any costs". According to property company Hamptons, the amount of money leaseholders pay for communal maintenance and services in their building has risen by 11% in England and Wales between 2023 and 2024 to an average of £2,300. Companies responsible for managing buildings have said a rise in costs can be attributed to legitimate expenses including energy prices and higher inflation rates but many leaseholders felt the costs were unfair. Under the current system, it is the freeholder or landlord that appoints a managing agent. Under a commonhold system, residents would have more autonomy over what they pay and who they appoint to do maintainence, the government said. What is the difference between leasehold and commonhold? A leasehold property reverts to the freeholder after a fixed amount of time. A commonhold property is owned outright, like a freehold house. Under commonhold, homeowners have a say on the annual budget for their building. Under the leasehold system, a freeholder or landlord sends a bill to residents for communal costs. The residents will be able to hire and fire a managing agent. There is no ground rent charge in a commonhold property. Forfeiture is not possible under commonhold, meaning a resident cannot be threatened with losing their home. Natalie Chambers, director of the Residential Freehold Association (RFA), said the measures "should not be seen as a trade-off between leasehold and commonhold". "Millions of leaseholders across the country are perfectly content with the tenure and we firmly believe that leasehold is the most effective way of managing large complex apartment building." She added that a commonhold system would mean "residents would face greater financial and legal responsibilities for block maintenance and management". The National Leasehold Campaign (NLC) said it was "delighted" about the announcement and called today's white paper is a significant step forward. But NLC founder Katie Kendrick said it was "paramount" that those currently living in leasehold buildings were not forgotten. She said: "While focusing on preventing future leasehold abuses is crucial, it's equally vital to address the plight of existing leaseholders currently bound by the inequitable leasehold system. "Commonhold conversion mechanisms are essential to offer an escape route for those trapped." Mr Pennycook said the government would "continue to implement reforms to help millions of leaseholders who are currently suffering". Additional reporting by Jade Thompson How service charges in flats spiralled out of control Charged £720 to have a key cut - soaring bills drive leaseholders to breaking point Flat owners' anger over 'mystery' service charges 'We can't sell our flat and can't afford to live in it'
The Independent
03-03-2025
- Business
- The Independent
Leasehold flats ban beginning of the end for ‘feudal' system, minister says
New leasehold flats are set to be banned under Government plans to make commonhold the default tenure, with homeowners expected to have greater control over their properties. Housing minister Matthew Pennycook said the reforms 'mark the beginning of the end' for the 'feudal' leasehold system, which subjects homeowners to 'unfair practices and unreasonable costs'. Under the current system, third-party landlords can own a building's lease and therefore make decisions on behalf of homeowners. The Government has proposed to bring the leaseholds system to an end, in line with its manifesto commitment, and give homeowners more control over how their buildings are run. Homeowners will not have to pay extra costs such as ground rent under the proposed reforms. A Commonhold White Paper published on Monday states commonhold will be 'reinvigorated' through a new legal framework and the sale of new leasehold flats will be prohibited. Mr Pennycook said: 'This Government promised not only to provide immediate relief to leaseholders suffering now but to do what is necessary to bring the feudal leasehold system to an end – and that is precisely what we are doing. 'By taking decisive steps to reinvigorate commonhold and make it the default tenure, we will ensure that it is homeowners, not third-party landlords, who will own the buildings they live in and have a greater say in how their home is managed and the bills they pay. 'These reforms mark the beginning of the end for a system that has seen millions of homeowners subject to unfair practices and unreasonable costs at the hands of their landlords, and build on our Plan for Change commitments to drive up living standards and create a housing system fit for the twenty-first century.' The Government has also said it is 'determined' to make conversion to commonhold easier for existing leaseholders. A draft Leasehold and Commonhold Reform Bill, which will include the detail of how reformed commonhold will work, will be published later this year, the Ministry of Housing, Communities and Local Government has said.
BBC News
03-03-2025
- Business
- BBC News
Government to end leasehold flat system with new commonhold plans
Ministers have outlined plans to abolish the leasehold system in England and to change the law would ban the sale of new leasehold the leasehold system, third-party landlords known as freeholders own the building and a leaseholder buys the right to occupy a flat within it for a fixed time period. The government said it wanted to move to a way of building homes that was more in line with the rest of the world, known as commonhold, where homeowners owned a share of and had control over buildings they lived in. But freeholders said leasehold was the "most effective way of managing large complex apartment buildings". A white paper published on Monday stated the sale of new leasehold flats would be banned and commonhold "reinvigorated" with a new legal framework.A draft Leasehold and Commonhold Reform Bill - including the detail of how the new system would work - will be published later this year, the government has legislation would apply to England and Wales, where there are around five million leasehold Minister Matthew Pennycook said reforms would put an end to "unfair practices and unreasonable costs at the hands of landlords".Leaseholders can feel like they have no control over costs for repairs and maintenance of the outside of their 1,000 people contacted the BBC after a BBC investigation about service charges in leasehold blocks last year. Kasia Tarker bought a one-bedroom flat in Southall, West London, in 2022. Her service charge bills have increased from roughly £65 per month in 2022 to more than £200 per month this said she felt helpless and could not afford the charges. "I am going have to try and sell the flat or become homeless, I don't know what I am going to do."FirstPort, who took over management of Kasia's development in 2023, said the "increases in areas such as insurance and health and safety costs" were beyond its said she would like more control over her service charges but the government's commonhold proposals were for new builds, so would not help her in her current situation. Jean Hopkin, another leaseholder who got in touch with the BBC, said the service charge for her three-bedroom flat in Sheffield had increased 356% - from £106 a month to £483 in four years - and was unsellable because of the high charges. Jenny Baker in Southampton is also struggling to find buyers because of "unjustified" service charges that have gone up to £7,200 a year. "The state of the apartment block is just terrible. The windows don't get cleaned and there's black mould on the outside of the building - what on earth am I paying for? "I feel stuck – I can never come out of it. I feel like I have absolutely no control, and it makes me feel really anxious."Rendall & Rittner, which manage Jean and Jenny's buildings, said the company did "not profit from or mark up any costs". According to property company Hamptons, the amount of money leaseholders pay for communal maintenance and services in their building has risen by 11% in England and Wales between 2023 and 2024 to an average of £2, responsible for managing buildings have said a rise in costs can be attributed to legitimate expenses including energy prices and higher inflation rates but many leaseholders felt the costs were unfair. Under the current system, it is the freeholder or landlord that appoints a managing agent. Under a commonhold system, residents would have more autonomy over what they pay and who they appoint to do maintainence, the government said. What is the difference between leasehold and commonhold? A leasehold property reverts to the freeholder after a fixed amount of time. A commonhold property is owned outright, like a freehold commonhold, homeowners have a say on the annual budget for their building. Under the leasehold system, a freeholder or landlord sends a bill to residents for communal costs. The residents will be able to hire and fire a managing is no ground rent charge in a commonhold is not possible under commonhold, meaning a resident cannot be threatened with losing their home. Natalie Chambers, director of the Residential Freehold Association (RFA), said the measures "should not be seen as a trade-off between leasehold and commonhold". "Millions of leaseholders across the country are perfectly content with the tenure and we firmly believe that leasehold is the most effective way of managing large complex apartment building." She added that a commonhold system would mean "residents would face greater financial and legal responsibilities for block maintenance and management". 'Significant step' The National Leasehold Campaign (NLC) said it was "delighted" about the announcement and called today's white paper is a significant step NLC founder Katie Kendrick said it was "paramount" that those currently living in leasehold buildings were not said: "While focusing on preventing future leasehold abuses is crucial, it's equally vital to address the plight of existing leaseholders currently bound by the inequitable leasehold system. "Commonhold conversion mechanisms are essential to offer an escape route for those trapped."Mr Pennycook said the government would "continue to implement reforms to help millions of leaseholders who are currently suffering".Additional reporting by Jade Thompson
Yahoo
03-03-2025
- Business
- Yahoo
Leasehold flats ban beginning of the end for ‘feudal' system, minister says
New leasehold flats are set to be banned under Government plans to make commonhold the default tenure, with homeowners expected to have greater control over their properties. Housing minister Matthew Pennycook said the reforms 'mark the beginning of the end' for the 'feudal' leasehold system, which subjects homeowners to 'unfair practices and unreasonable costs'. Under the current system, third-party landlords can own a building's lease and therefore make decisions on behalf of homeowners. The Government has proposed to bring the leaseholds system to an end, in line with its manifesto commitment, and give homeowners more control over how their buildings are run. Homeowners will not have to pay extra costs such as ground rent under the proposed reforms. A Commonhold White Paper published on Monday states commonhold will be 'reinvigorated' through a new legal framework and the sale of new leasehold flats will be prohibited. Mr Pennycook said: 'This Government promised not only to provide immediate relief to leaseholders suffering now but to do what is necessary to bring the feudal leasehold system to an end – and that is precisely what we are doing. 'By taking decisive steps to reinvigorate commonhold and make it the default tenure, we will ensure that it is homeowners, not third-party landlords, who will own the buildings they live in and have a greater say in how their home is managed and the bills they pay. 'These reforms mark the beginning of the end for a system that has seen millions of homeowners subject to unfair practices and unreasonable costs at the hands of their landlords, and build on our Plan for Change commitments to drive up living standards and create a housing system fit for the twenty-first century.' The Government has also said it is 'determined' to make conversion to commonhold easier for existing leaseholders. A draft Leasehold and Commonhold Reform Bill, which will include the detail of how reformed commonhold will work, will be published later this year, the Ministry of Housing, Communities and Local Government has said. Legislation will apply to England and Wales, where there are around five million leasehold homes.
