Although not often found in the rural sector, residential leasehold ownership has been prevalent for centuries in the residential sector and the majority of flats are still owned on a leasehold basis. It has, however, had a bad press as a result of the poor behaviours of some landlords and managing agents with ground rents and maintenance fees imposed under lease terms that are considered by many to be unfair.
According to yesterday’s press release, the publication of the Commonhold White Paper marks the beginning of the end for the ‘feudal’ leasehold system. The extent to which this represents a significant ideological shift can be gleaned from the language used in the ministerial forward to the White Paper which opens as follows:
For far too many leaseholders, the reality of home ownership has fallen woefully short of the dream – their lives marked by an intermittent, if not constant, struggle with punitive and escalating ground rents; unjustified permissions and administration fees; unreasonable or extortionate charges; and onerous conditions imposed with little or no consultation. This is not what home ownership should entail.
The government’s aim is to to abolish the leasehold system and replace it with commonhold which is widely used in other parts of the world. This builds on the work of the Law Commission which published three reports on residential leasehold and commonhold in July 2020. Some of the recommendations were taken forward by the previous government in the The Leasehold and Freehold Reform Act 2024 and the current government says it intends to reinvigorate commonhold through the introduction of a comprehensive new legal framework based on the vast majority of the Law Commission’s recommendations.
