‘Millions remain trapped’: Leaseholders still ‘cash cows’ despite update on abolishing ‘feudal’ system

Published

7 months ago

November 22, 2024

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Long-awaited legislation to abolish England’s “feudal” leasehold property system will be published in the second half of next year, the government has confirmed in a major update for the millions of people affected.

In a Written Ministerial Statement (WMS), housing minister Matthew Pennycook gave the first details of how quickly Labour intend to axe the controversial form of homeownership, as promised in their manifesto.

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The minister said there will be a consultation and white paper early next year to get the plan in motion, with the aim to make commonhold “the default tenure” by the end of parliament in 2029.

The news has drawn a mixed reaction from those caught up in the system, with some hailing an end in sight and others saying it is too little too late.

What is leasehold?

Leasehold is a centuries-old form of tenure that is unique to England and Wales. People who buy their home with a lease buy the right to live there for a given number of years but don’t own the land itself, regardless of whether it is a house, or a flat in a building.

That is the preserve of the freeholder, who can charge expensive ground rents simply for owning the land, as well as service charges for the maintenance and insurance of the properties.

There have long been concerns around leaseholders being exploited, especially by unregulated managing agents who are typically contracted to oversee the day-to-day running of buildings and can charge large fees on any works they arrange.

Criticism intensified after the building safety scandal that emerged post-Grenfell with many homeowners facing crippling bills for remediation, leaving them stuck in worthless properties they cannot sell.

‘I see no way out’

That’s the case for leaseholder Peter Batt, who has not been able to live in his “once lovely” flat in Kent for the past nine months because the roof of the building has “completely failed and is disintegrating”.

This has caused damp, black mould and leaks so severe his neighbour’s ceiling below him has collapsed

The problems were raised to the building’s managing agents in February but no remediation has occurred.

Last week he was told he’d need to cough up £18,000 for his share of the works before any repairs can go ahead – money the 60-year-old doesn’t have.

“I genuinely see no way out unless I win the lottery, it’s been an utter nightmare”, he told Sky News.

Mr Batt and his neighbours want a temporary tin hat cover to be prioritised, given this was recommended by surveyors back in April to stop the situation deteriorating – which they say it now has.

But they have “no say over this despite shouldering all the costs”, Mr Batt added.

“The government need to look at root-and-branch reform because, in my experience, all the parties currently charged with maintaining building such as my own are incentivised almost solely around maintaining their revenue stream.

“Under the current system, no one is on the leaseholders’ side and that has to change.”

‘Death knell of leasehold’

In his WMS, Mr Pennycook said the government will introduce a “comprehensive new legal framework” on commonhold, including banning the sale of leasehold flats and converting existing leasehold tenures to the new model.

Proponents of commonhold say it would drive up safety standards, as it would give flat owners more control of the maintenance of a building while removing the cash incentive for developers to build homes on the cheap – knowing leaseholders can pick up the costs.

Sebastian O’Kelly, of the Leasehold Knowledge Partnership, welcomed today’s announcement as the “death knell of leasehold”.

He advised people not to buy leasehold properties as “the market will force pace on this”, pointing out that some developers have recently come out in support of commonhold while others “whose reputations have been shredded by the Grenfell findings will follow”.

He told Sky News: “With this momentum the reforms to improve the blighted lives of existing leaseholders will be eased. Government may think this process will be slow, but house builders will know that the leasehold game they have played so assiduously is busted.”

Delay in implementing Tories’ ‘half-baked’ reforms

But there was a more muted response from the National Leasehold Campaign, which has spent six years trying to dismantle the system.

As well as announcing a roadmap for abolishing leasehold, Mr Pennycook set out a timeline for implementing reforms in the Tories’ Leasehold and Freehold Reform Act (LFRA), which just about made wash-up when Rishi Sunak called the July election, after being watered down by then housing secretary Michael Gove.

The LFRA promised to abolish leaseholds on new houses but not new flats, which make up 70% of the estimated 5 million leasehold properties in England.

It also aimed to give leaseholders more rights and protections, but Mr Pennycook said the act was “half baked” so there would be delays in implementing some of its measures.

Crucially, that includes rules around new valuations, which will be consulted on next summer, he said.

‘Endless cash cow continues’

The NLC called this “very disappointing” as the mechanism was designed to make it quicker and cheaper for people to buy their freehold or extend their lease “enabling them to sell their properties and move on with their lives”.

“Our main concern now is the fate of existing leaseholders who are currently suffering at the mercy of unregulated managing agents and unscrupulous freeholders,” it added.

“The government’s published intention to ‘act as quickly as possible’ will not be quick enough and we are already seeing the despair from some NLC members who are facing bankruptcy due to escalating service charges.

“Since 2018, leaseholders have heard time and time again from former government ministers that they will end the abuses but in reality nothing has changed for existing leaseholders. Using our homes as an endless cash cow continues and millions remain trapped.”

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Break Singapore’s new crypto rules and you could face $200K fine or jail

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June 22, 2025

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Lummis’ RISE Act is ‘timely and needed’ but short on details

Published

3 hours ago

June 22, 2025

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‘Stability in Middle East is priority,’ says Starmer – as world reacts to strikes

Published

5 hours ago

June 22, 2025

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'Stability in Middle East is priority,' says Starmer - as world reacts to strikes

Sir Keir Starmer has said stability in the Middle East is “a priority” following US strikes on Iran’s nuclear facilities, as the world reacted to the attack.

The prime minister also called on Iran to “return to the negotiating table” to “reach a diplomatic solution to end this crisis”.

The US struck three sites in Iran early on Sunday morning, with Donald Trump boasting the country’s key nuclear sites were “completely and fully obliterated” in an address to the nation from the White House. He warned there could be further strikes if Iran retaliates.

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In a statement, Sir Keir said: “Iran’s nuclear programme is a grave threat to international security. Iran can never be allowed to develop a nuclear weapon, and the US has taken action to alleviate that threat.

“The situation in the Middle East remains volatile and stability in the region is a priority. We call on Iran to return to the negotiating table and reach a diplomatic solution to end this crisis.”

He said the UK was not involved in the attack but was informed about them in advance.

Sir Keir later told reporters there was a “risk of escalation” and added: “That’s a risk to the region. It’s a risk beyond the region, and that’s why all our focus has been on de-escalating, getting people back around to negotiate what is a very real threat in relation to the nuclear programme.”

The prime minister will chair a meeting of the government’s COBRA crisis committee on Sunday afternoon.

Netanyahu praises Trump

Israel‘s Prime Minister Benjamin Netanyahu praised Mr Trump for the strikes, saying: “Your bold decision to target Iran’s nuclear facilities with the awesome and righteous might of the United States will change history.

“History will record that President Trump acted to deny the world’s most dangerous regime the world’s most dangerous weapons.”

UN secretary-general ‘gravely alarmed’ by US attack

But UN secretary general Antonio Guterres said he was “gravely alarmed by the use of force” by the US against Iran.

“This is a dangerous escalation in a region already on the edge – and a direct threat to international peace and security. There is a growing risk that this conflict could rapidly get out of control – with catastrophic consequences for civilians, the region, and the world.”

European Union foreign policy chief Kaja Kallas urged all sides to step back and return to the negotiating table. “Iran must not be allowed to develop a nuclear weapon,” she said in a post on X.

“I urge all sides to step back, return to the negotiating table and prevent further escalation,” she said, adding that EU foreign ministers will discuss the situation tomorrow.

How the world reacted to the strikes

World leaders reacted to the strikes with calls for diplomacy and de-escalation, with some fearing they could push the region towards a wider conflict.

Russia’s former president and current deputy chair of its security council, Dmitry Medvedev, said on the Telegram messaging app: “Trump, who came in as a peacemaker president, has started a new war for the US.”

China strongly condemned the attack, with its foreign ministry saying the move seriously violates the UN charter and worsens tensions in the Middle East. It urged the parties involved to cease attacks as soon as possible and begin negotiations.

German Chancellor Friedrich Merz urged Iran to enter immediate talks with the US and Israel to find a diplomatic solution to the conflict, a government spokesperson said.

France urged all sides to show restraint, with its foreign minister Jean-Noel Barrot saying Paris is “convinced that a lasting resolution to this issue requires a negotiated solution within the framework of the Non-Proliferation Treaty”.

Italy’s foreign minister Antonio Tajani said after the attack that his country’s government hopes “a de-escalation can begin and Iran can sit down at the negotiating table”.

Cuba’s President Miguel Diaz-Canel said on X: “We strongly condemn the US bombing of Iran’s nuclear facilities, which constitutes a dangerous escalation of the conflict in the Middle East. The aggression seriously violates the UN Charter and international law and plunges humanity into a crisis with irreversible consequences.”

Venezuela’s foreign minister Yvan Gil said his country’s government “condemns US military aggression” and “demands an immediate cessation of hostilities”.

NATO member Turkey said the strikes raised the risk of a regional conflict spreading globally, with the foreign ministry saying the spread of the conflict into a wider global war must not be allowed.

The Iraqi government condemned the strikes, saying they create a grave threat to peace and security in the Middle East.

Saudi Arabia expressed “deep concern” but stopped short of condemning the attack.

Both Hamas in Gaza and the Houthis in Yemen – part of Iran’s so-called Axis of Resistance – condemned the strikes, with the Houthis vowing to support Iran in its fight against “the Zionist and American aggression”.

Lebanon’s Prime Minister Nawaf Salam said his country needs to stay away from any possible regional spillover from the conflict.

Qatar said it “regrets” the escalating tensions and its foreign ministry urged all parties to show restraint and “avoid escalation, which the peoples of the region, burdened by conflicts and their tragic humanitarian repercussions, cannot tolerate”.

The United Arab Emirates called for an immediate halt to the escalation to “avoid serious repercussions” in the region, with its foreign ministry warning they could lead the region to “new levels of instability”.

Oman condemned the strikes, with a spokesperson for its foreign ministry warning they threaten “to expand the scope of the conflict and constitute a serious violation of international law and the United Nations charter”.

Maryam Rajavi, the head of Iranian opposition group National Council of Resistance of Iran, said from Paris: “Now [Supreme Leader] Khamenei must go. The Iranian people welcome the end of the war and seek peace and freedom.

“Khamenei is responsible for an unpatriotic project that, in addition to costing countless lives, has cost the Iranian people at least $2trn (£1.5trn) – and now, it has all gone up in smoke.”