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Government puts leasehold abolition on hold – reports

Nick Cheek
Written By:
Nick Cheek

Plans to abolish the leasehold system have been dropped by the Department for Levelling Up (DLUHC), according to a media report.

According to reports in The Guardian, Secretary of State for Levelling Up Michael Gove will stop short of abolishing leasehold completely, despite saying that he would end the “feudal” leasehold system earlier this year.

The report noted that Gove wanted to replace the leasehold system with a commonhold system, telling government colleagues that abolition of leasehold could be a vote winner and coudl also help recover votes amongst younger urban voters.

However, this has been rebuffed by Downing Street, according to the Guardian, who say there may not be enough time before the coming election to enact changes.

Gove is due to introduce the much-anticipated Renters Reform Bill imminently, with some reports suggesting that this could occur next week.

Changes introduced in the Bill are thought to include a cap on ground rents, giving more powers to tenants to select their own property management companies and a ban on building owners forcing leaseholders to pay legal costs incurred during disputes, according to The Guardian report.

Leasehold under the microscope

The leasehold system has already been under some legislative scrutiny with leaseholders securing ground rent refunds and the Building Safety Act, which came into force last year, mandating that costs be placed on building owners, rather than leaseholders, to pay for constructions.

However, many feel that leasehold needs wholesale reform, with various MPs calling on the Government in March to urgently look at leasehold reform and service charges.

A DLUHC spokesperson said: “We are determined to better protect and empower leaseholders to challenge unreasonable costs. We have already made significant improvements to the market – ending ground rents for most new residential leases, and announcing plans to make it easier and cheaper for leaseholders to extend their lease or buy their freehold.

“In line with our manifesto commitment, we will bring forward further leasehold reforms later in this Parliament.”