The housing minister Matthew Pennycook has confirmed it is highly likely that the ban on new leasehold properties will not come into force before the next general election. While the government remains committed to passing the legislation needed to abolish the feudal era system within this parliament, the minister acknowledged that switching on the ban involves complex trade-offs with housing supply and other legal considerations.
An estimated five million people in England and Wales currently live in leasehold properties, in what the housing minister has described as the biggest shakeup to homeownership in 1,000 years. Under the current system, homeowners have the right to live in their property for a set number of years but do not own the land it sits on. Many leaseholders have long complained of spiralling service charges and ground rents that create barriers to selling, with little or no control over how their building is managed.
The government’s priority is to have all the primary legislation needed to end leasehold in place by the end of this parliament, with a commencement date to be named that will apply to both flats and houses at the same time. Labour’s Draft Commonhold and Leasehold Reform Bill, introduced in January, will also include measures to cap ground rents at £250 a year and set out how existing leaseholders can transition to commonhold if they choose to.
As estate agents operating across North and Central London, we at Drivers & Norris understand how unsettling this uncertainty can be, particularly for buyers considering leasehold flats, existing leaseholders weighing up their options, and landlords planning ahead. The direction of travel is clear: leasehold as we know it is coming to an end, but the transition will take time and the current framework remains in place.
Our advice is not to put your property plans on hold waiting for legislation that may be years away from taking effect. Whether you are buying, selling or managing a leasehold property, understanding where you stand today matters. Our team is here to give you honest, experienced guidance every step of the way.
— Drivers & Norris
Source: Sky News