Commonhold White Paper – Thoughts from the Industry

The sale of new leasehold flats in England and Wales is to be banned under Labour’s plan to end the ‘feudal’ system. Labour wants to switch to Scotland’s commonhold system

There are around 5 million leaseholders in England and Wales. Under commonhold, each flat owner would own the freehold of their home, but also have shared responsibility for common areas and upkeep. Here are some thoughts from the Industry.

Timothy Douglas, Head of Policy and Campaigns at Propertymark:

“Further reforms to the leasehold system will be welcome news for leaseholders up and down the country. Propertymark has long campaigned for changes to make it cheaper and easier to buy, sell and rent leasehold property. We know that there are complications and additional costs with extending leases and property with an escalating ground rent struggles to sell, so commonhold offers an opportunity to tackle these issues. With 42 per cent of Propertymark member agents favouring abolishing the leasehold system altogether, it’s clear to see there is frustration with the current system. However, understanding and awareness of the implications of commonhold is low. What’s key through the White Paper proposals is that any future changes make the system simpler, reduce costs and enable consumer confidence.”

Richard Beresford, Chief Executive of the National Federation of Builders (NFB):

“Leasehold can work, but its outdated, open to abuse, and offers none of the protections and benefits that Commonhold would, effectively creating second class homeowners. We are absolutely behind the Government on their direction of travel.

Planning minister, Matthew Pennycook made the announcement yesterday morning (3 March 2024), citing the need to “drive up living standards and create a housing system fit for the twenty first century”. He also championed efforts to “make it easier for leaseholders to buy their freehold or extend their lease.”

Rico Wojtulewicz, Head of Policy and Market Insight at the NFB and the House Builders Association (HBA):

“HBA members fully support the move away from leasehold and have proactively identified where commonhold might need attention, for example on infrastructure adoption and maintenance cost, particularly on roads, drainage, and the environment.

Commonhold could also help the Government meet their housing targets. When people feel they have a real stake in their building, consumer confidence in dense, tall buildings, essential for delivering supply in our cities, will increase and projects will have enough buyer interest in them and therefore be viable enough to build.”

Helen Hutchison, partner at Irwin Mitchell:

“Whilst we strongly agree there is a need to makes changes to the current leasehold regime, a rush to abolish leasehold ownership, without a clear plan will be risky and could potentially bring the market for leasehold flats to a halt. The sheer enormity of such a transition needs to be considered with input from those in the sector to put in place a staged process with a view to minimising risk. We await further proposals with interest and will of course be monitoring the situation closely.”

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Commonhold White Paper – Thoughts from the Industry

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