Sunday, November 05, 2023
Government not going far enough on leaseholds
The Guardian reports that Tory MPs are preparing to force the government to toughen up its planned leasehold reforms in England and Wales after it was revealed that, while the bill is expected to include a ban on developers selling new houses under leasehold, government sources have told the Guardian it will not extend that ban to flats, which make up about 70% of all leasehold properties.
Several senior Tories said they wanted the government to end leasehold for new houses and flats, and were willing to bring their own amendments to the bill if it failed to do so. With Labour backing these MPs, they could even force a government U-turn or defeat.
Peter Bottomley, the longest-serving MP in the House of Commons, said: “If the government has not included in the bill things that are clearly necessary, both the Lords and the Commons will improve it. If anything is left out of the bill, it can be and will be improved.”
An unnamed Tory MP, who is helping organise the resistance to the government’s plans, said: “If this bill does not include flats, I absolutely will seek to amend it. If you’re buying a flat in a 50-apartment block, then there must be a way of doing it so that people can still own their own property and not be at the beck and call of a freeholder.”
Matthew Pennycook, the shadow housing minister, said Labour would back attempts to ban leasehold for new flats.
“It is deeply disappointing that the government appears set on legislating only for new houses to be sold as freehold, leaving those who buy flats trapped in an archaic system of home ownership,” he said.
“Labour believes commonhold should be the default tenure for all new properties, with the system completely overhauled so that existing leaseholders can collectively purchase more easily and move to commonhold if they wish.”
Gove has promised for a long time to end the leasehold system altogether, telling the Sunday Times this year: “It is an outdated feudal system that needs to go.”
Leaseholders have complained for years about a range of practices by some freeholders and managing agents. Many say they have been charged extortionate fees to carry out repairs or extend a lease, or that property management companies keep putting up service charges without reason.
The issue came to the fore in the wake of the Grenfell fire, after which thousands of leaseholders found themselves confronted with bills of tens of thousands of pounds to replace combustible cladding on their buildings. The government has since insisted that developers foot the bills for larger tower blocks, but much of the replacement work has still not been done.
To be fair to Gove, it is believed that he has been fighting for a more wide-ranging set of proposals that would also include measures to end leasehold on newly built flats, but he has been unsuccessful in that battle, with Downing Street concerned it could run into opposition from developers and Tory freeholders.
Reform is long overdue, as are changes to the way large scale developers are seeking to get around any ban, by not seeking adoption of new estates, but instead charging a management fee to freeholders to look after common areas. In these cases, the freeholders have fewer rights than those in leasehold flats as they cannot choose who the management company is, and as such cannot negotiate reductions in the fee they are charged.
Half measures are not enough. The government has to get to grip with the way the law is being abused to exploit homeowners. And why is the Welsh Government not acting independently on this?
Several senior Tories said they wanted the government to end leasehold for new houses and flats, and were willing to bring their own amendments to the bill if it failed to do so. With Labour backing these MPs, they could even force a government U-turn or defeat.
Peter Bottomley, the longest-serving MP in the House of Commons, said: “If the government has not included in the bill things that are clearly necessary, both the Lords and the Commons will improve it. If anything is left out of the bill, it can be and will be improved.”
An unnamed Tory MP, who is helping organise the resistance to the government’s plans, said: “If this bill does not include flats, I absolutely will seek to amend it. If you’re buying a flat in a 50-apartment block, then there must be a way of doing it so that people can still own their own property and not be at the beck and call of a freeholder.”
Matthew Pennycook, the shadow housing minister, said Labour would back attempts to ban leasehold for new flats.
“It is deeply disappointing that the government appears set on legislating only for new houses to be sold as freehold, leaving those who buy flats trapped in an archaic system of home ownership,” he said.
“Labour believes commonhold should be the default tenure for all new properties, with the system completely overhauled so that existing leaseholders can collectively purchase more easily and move to commonhold if they wish.”
Gove has promised for a long time to end the leasehold system altogether, telling the Sunday Times this year: “It is an outdated feudal system that needs to go.”
Leaseholders have complained for years about a range of practices by some freeholders and managing agents. Many say they have been charged extortionate fees to carry out repairs or extend a lease, or that property management companies keep putting up service charges without reason.
The issue came to the fore in the wake of the Grenfell fire, after which thousands of leaseholders found themselves confronted with bills of tens of thousands of pounds to replace combustible cladding on their buildings. The government has since insisted that developers foot the bills for larger tower blocks, but much of the replacement work has still not been done.
To be fair to Gove, it is believed that he has been fighting for a more wide-ranging set of proposals that would also include measures to end leasehold on newly built flats, but he has been unsuccessful in that battle, with Downing Street concerned it could run into opposition from developers and Tory freeholders.
Reform is long overdue, as are changes to the way large scale developers are seeking to get around any ban, by not seeking adoption of new estates, but instead charging a management fee to freeholders to look after common areas. In these cases, the freeholders have fewer rights than those in leasehold flats as they cannot choose who the management company is, and as such cannot negotiate reductions in the fee they are charged.
Half measures are not enough. The government has to get to grip with the way the law is being abused to exploit homeowners. And why is the Welsh Government not acting independently on this?
