What do we need from a Leasehold Reform Bill?

The government’s promise to abolish leasehold houses is almost meaningless: its own statistics show that less than 1% of houses were sold as leasehold in 2022. To resolve the issues with leasehold – from inflated service charges to the rectification of fire safety defects – we need a reinvigoration of commonhold for flats.

To ensure adoption, there must be an outright ban on developers selling new flats on a leasehold basis and a simplified process for flat owners to convert their blocks to commonhold. However, we do not have time to do this before the next election. Parliament needs time to consider and refine the legislation to ensure it does not suffer from the same issues as the Building Safety Act – one example of a flaw in that act was a qualifying leaseholder would lose their protection if they completed a lease extension.

I speak to leaseholders every week who have put their lives on hold for years waiting for changes to leasehold. With a maximum of 14 months before the next election, the government needs to make good on its promises to resolve some issues existing leaseholders face. These include reducing the cost of lease extensions by banning marriage value.

While there is no doubt ground rent is money for nothing, the government’s promise to ban it entirely could delay reform. Alternatively, if it capped ground rent at £250, it would resolve issues with selling and mortgaging flats and make lease extensions cheaper. Critically, capping it at £250 might offer enough of a compromise to freeholders to avoid a human rights challenge.

Having enacted legislation that solves some of the issues with leasehold, the Conservatives could credibly campaign with a promise of the more extensive reform that Labour has already committed to. At last count, there are nearly five million votes available.

Linz Darlington, managing director and founder, lease extension specialist Homehold