Should Leasehold be Abolished?

Number of Leasehold Homes Higher than First Thought


Recent government data has revealed that the number of leasehold homes in England is much greater than was previously thought.

According to the Department for Communities and Local Government there were around 1.4 million leasehold homes during 2015 – 16, significantly higher than the 2014 – 15 estimate of 1.2 million. The variation in figures is down to the methodology change, with the calculation now including properties which are socially rented. When flats are also included in calculations, the figures indicate that almost a fifth of all English properties are leasehold.

Following a high-profile scandal and calls for action to be taken, a complete ban on the sale of leasehold homes and was put forward by the government in July, as well as ground rent limitations.

The consultation on these proposed reforms came to a close earlier this week.

Highlighting the current suffering of residents, the HomeOwners Alliance championed the changes put forward and urged the government to go further, suggesting that leaseholds should be eventually be phased out completely.

“We welcome the government’s recognition of the injustices in the current system, and proposals to ban the sale of new-build leasehold houses. But we also need to deal urgently with those already caught in this scandal, by curbing extortionate ground rents,” it said.

 “We believe the government should go much further, and set out a plan to abolish the leasehold system over time. There are no redeeming qualities to the leasehold system, which is so complex and confusing to the public that partial reforms will mean it will remain a vehicle for unscrupulous landlords and investment companies to unfairly make money from homeowners.”

However, others such as the Civil Justice Council have stressed that a complete ban could be going too far and should only be used as a last resort.

Whilst the industry eagerly awaits the response to the proposals, the future of leaseholds is currently uncertain.

A spokesman for the Department for Communities and Local Government stated: “It’s unacceptable that homebuyers are being exploited with unjustifiable charges and onerous ground rent terms.

“Our housing white paper made clear that we would look at unreasonable abuses of leasehold. That is why we sought views through public consultation. The department is carefully considering the responses and we will respond in due course.”

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