April 15, 2024 4:13 pm

Insert Lead Generation
Nikka Sulton

Labour has retracted its pledge to introduce legislation abolishing leasehold within the first 100 days of government if successful in the general election. However, the party remains resolute in its commitment to eliminating the leasehold system.

Insiders within Labour emphasize that while the pledge adjustment has been made, the party’s dedication to removing the leasehold system remains unchanged. They attribute the revision to the need for additional time, particularly in response to the Tories’ altered promises on reform.

Harry Scoffin, founder of the Free Leaseholders campaign, expressed concern over the timing adjustment, labelling it as “worrying” amidst decades of government indecision on leasehold matters.

“With a general election looming, we require clear assurances that Labour remains committed to abolishing leasehold and implementing mass commonhold, as previously pledged. 5.3 million households await their manifesto with anticipation,” he conveyed to Sky News.

A Labour spokesperson remarked, “The Tories have had 14 years to deliver and they’ve broken their promises to leaseholders. An incoming Labour government would be left picking up the pieces.”

“Labour’s commitment to comprehensive leasehold reform hasn’t changed and we’ll bring forward ambitious legislation to enact all of the Law Commission’s remaining recommendations at the earliest opportunity if we’re privileged enough to serve,” they added.


What is leasehold?

Leasehold, a property contract, permits homeowners, typically of flats, to reside in a property for a fixed term. Often, leaseholders incur hefty ground rent and service charges to freeholders, who own the buildings or land.

In recent years, the expenses linked with leasehold have surged, exacerbated by the building safety crisis post-Grenfell. Many nationwide grapple with exorbitant bills for repairs, causing financial strain and hindering property sales, leaving homeowners feeling trapped.

In May of the previous year, Lisa Nandy, then serving as the shadow housing secretary, made a bold declaration, asserting that under a prospective Labour administration, legislative action would swiftly follow to abolish leasehold within the initial 100 days.

However, the exact pace at which Labour now plans to advance anti-leasehold legislation remains unclear, as the party has merely stated its intention to implement reforms “at the earliest opportunity” should they secure victory in the forthcoming election. This lack of specificity has raised questions about the timeframe for such reforms, particularly given the intricate nature of addressing what many perceive as a fundamentally flawed system. Complicating matters further is the perceived inadequacy of the Leasehold and Freehold Reform bill introduced by Michael Gove, which some argue fails to adequately address the systemic issues at play.

Despite reservations expressed by housing advocates regarding the shift in approach, Labour MP Barry Gardiner, a prominent figure in the campaign to abolish leasehold, has stood by the decision. Gardiner, who has long championed the cause of leasehold reform, contends that while the altered timeline may seem concerning to some, it reflects a pragmatic approach to tackling the multifaceted challenges inherent in overhauling the leasehold system.

Speaking to Sky News, he emphasised Labour’s unwavering commitment to comprehensive leasehold reform within its initial term in office.

He underscored that the pivotal concern lies not in the precise timing of the bill’s introduction, whether on the 95th or 105th day, but rather in its successful enactment into law, which remains the paramount objective for leaseholders—a commitment that a Labour administration stands firmly behind.

Notably, last year witnessed a reversal in stance from Mr. Gove, the housing secretary, who reneged on pledges to abolish the leasehold system, citing its archaic and antiquated nature. However, his subsequent bill aimed at reforming the system, unveiled before parliament in November, has encountered widespread criticism from both Conservative and Labour MPs, who have deemed it deficient and lacking in ambition.

Critics argue that despite bold assurances from successive Conservative officials regarding leasehold reform, the legislation falls short of implementing the vast majority of the 300+ recommendations outlined in the Law Commission’s 2020 reports, which advocate for the abolition of leasehold.

One contentious practice that MPs and peers advocate banning is “forfeiture,” a mechanism that threatens homeowners with the loss of their property for minor arrears.

Furthermore, reports suggest that the Treasury is pressuring Mr. Gove to abandon proposals to reduce leasehold ground rents to a nominal “peppercorn” rate, effectively zero, aiming to incentivize landlords to relinquish the freehold to leaseholders. Notably, while Mr. Gove’s bill prohibits the sale of new leasehold houses, it does not extend to new leasehold flats, which constitute 70% of affected properties.


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