Labour report sets out
‘leasehold revolution’ to end leasehold ownership and save
home-owners thousands of pounds
A Labour report released today (Tuesday 9 July) sets out
radical plans to end leasehold ownership of houses and flats,
with a wide-ranging proposals to give hard-pressed leaseholders
new rights and save them thousands of pounds.
At least 4.3 million homes across England are owned on a
leasehold basis, with many leaseholders facing exploitative
ground rents, onerous contract terms and arbitrary fees paid to
their freeholder.
Under the radical plans set out in a consultation today by
Labour’s Shadow Housing Secretary, MP, and Shadow Housing
Minister, MP, there will be a ban on the
sale of new leasehold houses and flats, and leaseholders will be
able to buy the full, freehold ownership of their home for 1% of
the property value.
These changes will up-end the current rules disadvantaging
leaseholders, which stretch back to the middle ages. For a
property in England priced at £250,000 with a 90 year lease,
Labour’s proposals could mean the cost of buying the freehold is
slashed from over £10,000 to £2,500 – a saving of almost £8,000,
plus expensive legal fees.
Other proposals set out by Labour today include:
· An
end to ground rents for new leasehold homes, and cap ground rents
for existing leaseholders at 0.1% of the property value, up to a
maximum of £250 a year.
· A
crack down on unfair fees and contract terms, and a right to
challenge unfair fees or poor service.
· New
rights to empower leaseholders to hire and fire their managing
agent, or to take over management of their homes
themselves.
· A
promise to revitalise commonhold: an alternative to leasehold –
forms of which are used successfully across the world.
The report also renews Labour’s calls for a full public
inquiry into misselling in the leasehold market which saw
thousands of properties sold with extortionate terms such as
doubling ground rents, making them unsellable.
The Party has set out the proposals today for consultation,
and is seeking views from leaseholders and others on next
steps.
Commenting, Labour’s Shadow Housing Secretary,
MP, said:
“Leasehold is a symbol of our broken housing system, with
millions of England’s homeowners feeling like they’ve bought
their home but still don’t own it.
“The scale of the problems faced by leaseholders, from
rip-off ground rents to punitive fees to onerous contract
conditions stating what they can and can’t do to their own homes,
demands wholesale change. We need a revolution in rights for
leaseholders.
“This consultation document sets out the next Labour
government’s ambition end the broken leasehold model for
good.”
Commenting, Labour’s Shadow Housing Minister,
MP, said:
“Leaseholders have everything stacked against them. Too
often they suffer extortionate fees, appalling service and
restrictive contract terms, and no way to easily challenge
them.
“England is one of the only places in the world which has
failed to move away from this feudal system. Across the world,
modern alternatives like commonhold have flourished.
“Labour will improve and revitalise commonhold for flats,
and make freehold mandatory for all new houses, as the
Conservatives should have done years ago.”
ENDS
Notes
Labour’s consultation document ‘A new deal for
leaseholders’ is published today and available
here: https://bit.ly/2NDMPH3
To end leasehold and ensure no leaseholder is left trapped
against their will in this broken system, the next Labour
Government plans the following five radical changes.
1. End the sale of new
private leasehold houses with direct effect, and end the sale of
private leasehold flats by the end of our first term in
government.
2. End ground rents for new
leasehold homes, and cap ground rents for existing leaseholders
at 0.1% of the property value, up to a maximum of £250 a
year.
3. Set a simple formula for
leaseholders to buy the freehold to their home, or commonhold in
the case of a flat, capped at 1% of the property value.
4. Crack down on unfair fees
and contract terms by publishing a reference list of reasonable
charges, requiring transparency on service charges and giving
leaseholders a right to challenge rip-off fees and conditions or
poor performance from service companies.
5. Give residents greater
powers over the management of their homes, with new rights for
flat-owners to form residents associations and by simplifying the
Right to Manage.
