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London mayor steps up calls for leasehold reform
The mayor of London Sadiq Khan has stepped up calls on the government to overhaul the system of leasehold for homebuyers and property owners in the capital.
In a release today from the Greater London Authority (GLA) launching its new leasehold advisory service, the mayor called for wholesale reform of the leasehold system, and said it was time the government looked at a long-term shift towards alternative tenures such as commonhold.
James Murray, deputy mayor for housing and development, said that the government had shown no real ambition to change the system, and urged it to prioritise legislation change to help leaseholders.
The calls come as the GLA launches a new online portal for current leaseholders or those looking to buy leasehold properties, where they can get advice and information on the form of ownership.
The portal will provide information such as the difference between leasehold, freehold and renting, to advice on buying a freehold flat, to information on how to pursue tribunal proceedings against a freeholder.
Currently around a third of London’s homes are owned on a leasehold basis, with 90% of new build housing being sold as leasehold.
Unlike buying a property under a freehold, where you own the property outright, buying a property under leasehold means you are effectively a tenant with a long-term rental deal, often lasting decades.
In recent years the tenure has come under scrutiny due to freeholders charging large ground rents and service charges. In many cases, leaseholders have been trapped in their homes unable to sell due to their leasehold properties being unattractive to buyers.
In December 2017 the government announced plans to outlaw leasehold agreements and scrap ground rents but instead of pressing ahead with the ban, fresh consultation on the ban was launched in October.
Mr Murray said: “The mayor is urging government to prioritise legislation to help both new and existing leaseholders, and in the meanwhile we are doing all we can to help leaseholders in the capital with advice and guidance on their rights.”
The move by the GLA to create a new portal comes after research from the National Association of Estate Agents last year, which found 94% of leaseholders regretted buying leasehold properties, and 65% would welcome additional information.
The government-funded Leasehold Advisory Service provides for leaseholders in England and Wales, but the mayor believes this is unfit for purpose currently.
Mr Murray said: “For too many Londoners being a leaseholder is a complex and confusing legal minefield.
“Beyond the financial commitments, the option of extending a lease or buying a freehold can present real legal and financial challenges for anyone who is not well versed in property law.
“The mayor’s new online guide will give London’s leaseholders the basic knowledge they need to understand their rights, and will help them know what to do if they think those rights are being abused.”
Housing secretary James Brokenshire said: “This Government has led the way on leasehold reform, committing to ban leasehold houses and onerous ground rents. Yes, there is more to do. We are putting further pressure on developers and freeholders and will introduce new legislation, when Parliamentary time allows, to make the leasehold system in England fairer and more transparent.”
“Whilst I understand the desire to help leaseholders, the mayor has once again shown that he really doesn’t understand the housing market.”
“A key feature of providing advice and support to leaseholders is ensuring a single point of access and information – that is why we have the government sponsored support group LEASE, which can provider leaseholders with advice and guidance.”
“This move just adds more confusion to what for many is a complicated issue.“
