aerial photography of houses
Photo by Benjamin Elliott on Unsplash

Last month’s Opposition Day debate led by Labour’s Lisa Nandy highlighted both the plight of leaseholders, and despite encouragement by the Law Commission, cross party support, and commitments, very little action by the Government.

There are nearly 5 million leasehold homes in England. The majority of flats in the private sector and 8% of all houses in England. Altogether, an estimated 20% of England’s housing stock is held under leasehold, and around 16% in Wales.

Whilst for many leasehold is little more than an inconvenience, but there is a significant minority where the system goes terribly wrong or is abused and the consequences can be life changing. The problems are many and varied, and many were raised in the debate: leaseholders who cannot afford to buy the freehold; charges for work that leaseholders didn’t want, and that cannot afford; difficulty contacting freeholders; freeholders seeking to evict leaseholders on bogus pretexts; leaseholders who find themselves unable to sell their property.

As Lisa pointed out, it’s a distinctly domestic problem. We are an outlier. Most other countries have adopted a system of commonhold. As she said: “It has been clear since we received the Law Commission proposals in 2020 that we need new legislation to end the sale of new private leasehold houses, effective immediately after Royal Assent is given. We need new legislation to replace private leasehold lats with commonhold. Lots of promises have been made to that effect, but there has been little in the way of action.”

Commonhold is the norm in many other countries. First introduced in England and Wales in 2002, it is an alternative to leasehold ownership of flats, and other properties that share communal areas or services. And yet, hardly any commonhold is being created. The Law Commission suggests that fewer than 20 commonhold developments have been established since the commonhold legislation came into force. There is no incentive for developers to relinquish the freehold (and many incentives not to). There is no easy pathway for leasehold enfranchisement and to implement a right to manage. Legislation is desperately needed to rejuvenate commonhold.

With Select Committee pressure, pressure from an APPG, and the Law Commission recommendations, and a cross-party consensus that radical reform is needed it should not be beyond a government to deliver. We’re encouraging our councillors to add their weight to the campaign to breathe new life into commonhold, a co-operative form of tenure, with a template motion. We hope that members can get behind our proposal.