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Reforming the leasehold system in England and Wales

By Maurice Shasha  //  Mon 10th August 2020
The Law Commission also proposes moving to a new system, known as commonhold. This involves people owning the freehold of their individual flat and managing the maintenance of the building
The Law Commission also proposes moving to a new system, known as commonhold. This involves people o
Law Commission calls for urgent shake-up of leasehold system

A series of reports by the Law Commission is putting the government under increasing pressure to reform the leasehold system in England and Wales.

Earlier this year, the Law Commission called for the process of extending or buying a lease to be simplified, and for costs to be capped.

Problems with the leasehold system include escalating ground rents and service charges, as well as cases of freeholders asking high fees to make alterations to a property. Strict conditions, such as pet bans can also be an issue.

However, some campaigners believe that even with a cost cap, extending a lease is still too expensive. The group National Leasehold Campaign has complained too of slow progress, saying there have been years of “empty promises” on the subject.

The Law Commission also proposes moving to a new system, known as commonhold. This involves people owning the freehold of their individual flat and managing the maintenance of the building, either jointly or by appointing a manager. The change would mean no ground rent to pay and more control for flat owners over how their building is run.

People opposed to the system say that getting agreement between households can be difficult and that lenders have been reluctant to grant mortgages for commonhold properties, which already exist.

There are at least four million leasehold homes in Britain, with most London flats sold on this basis.

The Law Commission was asked to look at leasehold reform in September 2017 by the then communities secretary, Sajid Javid. He called for an end to the “feudal practice” of leasehold and wanted new rules to make extending a lease or purchasing a freehold “much easier, faster and cheaper”.

So far, the government has banned developers from selling new houses as leasehold and cut ground rents on new apartments to zero, however, the ban is not retrospective.

Read more about this story in the Evening Standard Homes & Property.

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