The end of leasehold flats? A new era for homeownership.
The government has made significant strides toward ending the feudal leasehold system, ensuring that homeowners will soon have more control and ownership over their properties. Under the newly proposed reforms, leasehold flats will be banned, and commonhold will become the default system of property ownership in England.
In the current system, leaseholders do not own the land on which their building stands; instead, they lease it from a freeholder (landlord) for a specific period, often 99 or 125 years. This system has faced criticism due to the limited control it provides to leaseholders, including issues such as rising ground rents, high service charges, and costly lease extensions.
In England, there are approximately 4.98 million leasehold homes, with 70% being flats and 30% houses. For many homeowners, these reforms represent a long-overdue shift towards a fairer and more transparent property market.
A new era for property ownership
As part of this change, the government aims to give homeowners a stake in the ownership of their buildings from the outset, eliminating the need to pay ground rent and offering more control over building management and the costs associated with it. This move marks a monumental shift, as leaseholders will no longer face the limitations and escalating charges imposed by third-party landlords.
Stuart Reynolds, Senior Account Executive at Hazelton Mountford, commented: “This reform represents a pivotal moment in property law. The shift to commonhold ownership not only enhances control for homeowners but also guarantees a more transparent and fair system. For many, this is the end of an era marked by uncertainty and financial strain.”
Take a look at our Property Professionals page.
A more empowering model
With these reforms, commonhold ownership offers a more empowering model, one that is already used successfully in many parts of the world. Homeowners will no longer be subject to the whims of landlords, and instead, they will have the ability to make decisions that directly affect the running of their buildings.
The new legal framework will enable commonhold to be applied to a range of developments, including mixed-use buildings and shared ownership homes. It will also introduce greater flexibility for developers, ensuring that future construction projects benefit from the same level of control and stability.
Homeowners enjoy enhanced rights.
As the government moves forward with these reforms, homeowners will enjoy enhanced rights, including the ability to challenge unreasonable service charges and have more say in annual budgets and property management decisions. Additionally, the introduction of a Code of Practice for cost apportionment and stronger regulation for managing agents will provide further clarity and protection for consumers.
For property professionals, this is an exciting time. The new laws will create a more equitable property market, and at Hazelton Mountford, we are committed to helping you navigate these changes.
To learn more about how these changes may affect you, please visit our dedicated page or contact Stuart directly.
Find out more about our team on our dedicated page.