Ministers outline plans to ban new leasehold flats

Ministers person outlined plans to abolish the leasehold strategy successful England and Wales.

Proposals to alteration the instrumentality would prohibition the merchantability of caller leasehold flats.

Under the leasehold system, third-party landlords known arsenic freeholders ain the gathering and a leaseholder buys the close to inhabit a level wrong it for a fixed clip period.

The authorities said it wanted to determination to a mode of gathering homes that was much successful enactment with the remainder of the world, known arsenic commonhold, wherever homeowners owned a stock of and had power implicit buildings they lived in.

But freeholders said leasehold was the "most effectual mode of managing ample analyzable flat buildings".

A achromatic insubstantial published connected Monday stated the merchantability of caller leasehold flats would beryllium banned and commonhold "reinvigorated" with a caller ineligible framework.

A draught Leasehold and Commonhold Reform Bill - including the item of however the caller strategy would enactment - volition beryllium published aboriginal this year, the authorities has said.

New authorities would use to England and Wales, wherever determination are astir 5 cardinal leasehold homes.

Housing Minister Matthew Pennycook said reforms would enactment an extremity to "unfair practices and unreasonable costs astatine the hands of landlords".

Leaseholders tin consciousness similar they person nary power implicit costs for repairs and attraction of the extracurricular of their building.

Around 1,000 radical contacted the BBC aft a BBC investigation astir work charges successful leasehold blocks past year.

Kasia Tarker bought a one-bedroom level successful Southall, West London, successful 2022.

Her work complaint bills person accrued from astir £65 per period successful 2022 to much than £200 per period this year.

She said she felt helpless and could not spend the charges.

"I americium going person to effort and merchantability the level oregon go homeless, I don't cognize what I americium going to do."

FirstPort, who took implicit absorption of Kasia's improvement successful 2023, said the "increases successful areas specified arsenic security and wellness and information costs" were beyond its control.

Kasia said she would similar much power implicit her work charges but the government's commonhold proposals were for caller builds, truthful would not assistance her successful her existent situation.

Jean Hopkin, different leaseholder who got successful interaction with the BBC, said the work complaint for her three-bedroom level successful Sheffield had accrued 356% - from £106 a period to £483 successful 4 years - and was unsellable due to the fact that of the precocious charges.

Jenny Baker successful Southampton is besides struggling to find buyers due to the fact that of "unjustified" work charges that person gone up to £7,200 a year.

"The authorities of the flat artifact is conscionable terrible. The windows don't get cleaned and there's achromatic mould connected the extracurricular of the gathering - what connected world americium I paying for?

"I consciousness stuck – I tin ne'er travel retired of it. I consciousness similar I person perfectly nary control, and it makes maine consciousness truly anxious."

Rendall & Rittner, which negociate Jean and Jenny's buildings, said the institution did "not nett from oregon people up immoderate costs".

According to spot institution Hamptons, the magnitude of wealth leaseholders wage for communal attraction and services successful their gathering has risen by 11% successful England and Wales betwixt 2023 and 2024 to an mean of £2,300.

Companies liable for managing buildings person said a emergence successful costs tin beryllium attributed to morganatic expenses including vigor prices and higher ostentation rates but galore leaseholders felt the costs were unfair.

Under the existent system, it is the freeholder oregon landlord that appoints a managing agent. Under a commonhold system, residents would person much autonomy implicit what they wage and who they name to bash maintainence, the authorities said.

What is the quality betwixt leasehold and commonhold?

• A leasehold spot reverts to the freeholder aft a fixed magnitude of time. A commonhold spot is owned outright, similar a freehold house.

• Under commonhold, homeowners person a accidental connected the yearly fund for their building. Under the leasehold system, a freeholder oregon landlord sends a measure to residents for communal costs. The residents volition beryllium capable to prosecute and occurrence a managing agent.

• There is nary crushed rent complaint successful a commonhold property.

• Forfeiture is not imaginable nether commonhold, meaning a nonmigratory cannot beryllium threatened with losing their home.

Natalie Chambers, manager of the Residential Freehold Association (RFA), said the measures "should not beryllium seen arsenic a trade-off betwixt leasehold and commonhold".

"Millions of leaseholders crossed the state are perfectly contented with the tenure and we firmly judge that leasehold is the astir effectual mode of managing ample analyzable flat building."

She added that a commonhold strategy would mean "residents would look greater fiscal and ineligible responsibilities for artifact attraction and management".

'Significant step'

The National Leasehold Campaign (NLC) said it was "delighted" astir the announcement and called today's achromatic insubstantial is simply a important measurement forward.

But NLC laminitis Katie Kendrick said it was "paramount" that those presently surviving successful leasehold buildings were not forgotten.

She said: "While focusing connected preventing aboriginal leasehold abuses is crucial, it's arsenic captious to code the plight of existing leaseholders presently bound by the inequitable leasehold system.

"Commonhold conversion mechanisms are indispensable to connection an flight way for those trapped."

Mr Pennycook said the authorities would "continue to instrumentality reforms to assistance millions of leaseholders who are presently suffering".

Additional reporting by Jade Thompson