The plans to abolish the leasehold system in England and Wales have been abandoned following disagreements between Downing Street and Housing Secretary Michael Gove. Instead, Mr Gove will announce a series of measures next month to protect the ten million Britons who own homes on leasehold.
The expected measures include:
- Capping ground rents;
- Granting more powers to tenants in choosing property management companies;
- Prohibiting building owners from passing on legal costs to leaseholders in disputes.
However, the complete abolition of leaseholds, which was initially pledged for this year, will not be pursued.
A Department for Levelling Up, Housing, and Communities spokesperson stated the government’s commitment to enhancing protections for leaseholders, and promised that further leasehold reforms would be introduced later in this parliament.
Millions of homeowners in the UK are subject to leaseholds, incurring additional costs such as ground rents and service charges paid to building owners. Flat owners often face significant expenses to repair shared areas in their buildings, even if they disagree with the maintenance work.
Mr Gove has long advocated for scrapping the leasehold system, viewing it as an outdated and unfair feudal arrangement. He had proposed more widely adopting the commonhold lease system, allowing owners to jointly decide on shared area decisions, similar to systems used in other countries.
However, Downing Street reportedly opposed Mr Gove’s plan, citing time constraints before the upcoming election. Mr Gove’s past housing initiatives have also faced resistance from his party, leading to the watering down of some proposals, including the scrapping of a mandatory target for local councils to build 300,000 new homes annually.
This decision may disappoint campaigners who have long pushed for a complete end to the leasehold system, arguing that such a move could garner significant public support. Despite the change in approach, Mr Gove maintains that his reforms will encourage more people to buy flats and foster denser cities, helping alleviate the housing crisis without excessive development on greenfield land.