Labour pledges ban on leasehold ownership
Labour has unveiled proposals to ban the sale of new leasehold houses and flats and slash the cost of buying the freehold of an existing home.
In a report published tomorrow (linked below), the party will claim that its “leasehold revolution” would save homeowners thousands.
It is launching a consultation on proposals designed to end leasehold ownership of both houses and flats, including allowing leaseholders to buy the freehold of their property for 1% of its value.
Under the plans, the freehold of a property worth £250,000 with a 90-year lease could be bought for £2,500 – down from current potential costs of more than £10,000.
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Shadow housing secretary John Healey 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 [to] end the broken leasehold model for good.”
More than 4.3 million homes across England are owned on a leasehold basis, but the concept has come under scrutiny over the past two years.
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Tens of thousands of leaseholders have been left trapped living in buildings with dangerous Grenfell-style cladding, with many threatened by huge bills for its removal.
It has also emerged that some developers are charging extortionate ground rents by selling new houses as leasehold, which in some cases has doubled every year.
The Conservative government has set up a £200m fund to pay for the remediation of dangerous cladding on private high rises and announced that it will legislate to make sure all new houses are sold as freehold, apart from in exceptional circumstances.
Labour’s proposals also include plans to end ground rent on new leaseholds and cap ground rents on existing homes at 0.1% of the property value, up to a maximum of £250 a year.
It also vowed to revive the idea of commonhold, which allows people to own the freehold of an individual flat within a block.
And it promised to give leaseholders powers to hire and fire their own managing agents, as well as requiring greater transparency over service charges.
