Phasing out leasehold flats is the right thing to do
Propertymark has welcomed UK Government proposals to ban the sale of new leasehold flats and replace them with a commonhold system designed to give homeowners greater control over their properties.
Responding to a consultation launched by the Ministry of Housing, Communities and Local Government, Propertymark said the reforms could help tackle many of the long-standing problems associated with leasehold ownership.
Under the proposed changes, most newly built flats would no longer be sold on leasehold agreements. Instead, buyers would own their property through a commonhold structure, giving residents more control over how buildings are managed and removing costs such as ground rent.
Propertymark said reform is urgently needed after years of growing dissatisfaction among leaseholders.
Research previously carried out by the organisation found:
94 per cent of leaseholders regretted buying a leasehold property
93 per cent would not buy another leasehold home
76 per cent of property agents say leasehold flats are becoming harder to sell
Propertymark believes the changes could make flats more attractive to first-time buyers, families and landlords, while helping existing homeowners avoid becoming trapped in difficult-to-sell properties.
However, the organisation also warned that the transition must be handled carefully to protect current leaseholders.
The professional body does not support forcing existing leaseholders to convert to commonhold before selling their homes, arguing this could place unfair financial pressure on households.
Timothy Douglas, Head of Policy and Campaigns at Propertymark comments:
“Consumers have faced years of uncertainty and frustration with leasehold properties, from escalating charges to difficulties selling their homes.
“A move to commonhold has the potential to create a fairer, more transparent system that gives homeowners greater control and confidence.
“It’s important, however, that existing leaseholders are protected during the transition and that buyers fully understand how commonhold will work in practice.”
Propertymark is also calling for better regulation of property agents and managing agents to ensure consumers receive professional advice and support throughout the changes.
The organisation says education will be key, as many buyers are unfamiliar with commonhold ownership and how it differs from leasehold.
To support the transition, Propertymark plans to provide extensive training and guidance for agents across the UK so they can help consumers understand:
Whether a property is leasehold or commonhold
What exemptions may apply
How commonhold buildings are managed
What responsibilities homeowners may have
Propertymark said the reforms could ultimately improve confidence in the flat sales market and help more homes remain available for sale across England and Wales.
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