Ministers have opened a consultation about how to allow more leaseholders in ‘mixed-use buildings’ to take control and ownership of their building.

Thousands of future leaseholders are already set to benefit from the first of the government’s reforms to the leasehold system, expected to take effect later this year, that puts an end to ground rents for most new residential leases and lease extensions.

Stephen Greenhalgh, leasehold minister, said: “The current leasehold system is outdated, unbalanced and broken and we are determined to fix it.

Our proposals aim to rebalance power and should see more leaseholders than ever before owning the full rights to their homes.”

The consultation will run for six weeks until 22 February 2022, and seeks views on proposals to give more leaseholders the ability to manage or own their properties – in buildings where there is a mixture of homes and other non-residential facilities, such as shops and restaurants.

Under the current system, only some residential leaseholders in England and Wales can choose to buy their building outright through enfranchisement – or take over the management of their building via the ‘right to manage’.

If shops and other similar properties take up over 25% of the total floorspace, then leaseholders cannot collectively bid to take control of their building.

The new proposals could give these leaseholders the right to manage or buy their building outright, by increasing this limit to 50%, enabling them to have more control over how shared facilities are run and have the final say on building maintenance costs.

Other proposals in the consultation aim to make it cheaper for leaseholders to collectively buy their freehold. A ‘mandatory leaseback’ would require landlords to keep a lease on some properties in the building. This means reducing the cost of a collective buyout of their building – making it a reality for thousands more leaseholders.