Of course, we could still be 18 months or so out from the next General Election and therefore there is the potential for a lot to change. However, if the mood music and the polls continue as they are, then a Labour government seems like a very credible outcome and therefore everyone involved in the property market should prepare for such an eventuality.
The political dimension to all of this is incredibly interesting, not least because Department for Levelling Up, Housing and Communities (DLUHC) Secretary of State, Michael Gove, has been pretty vocal on his personal distaste for the leasehold system, describing it as both “outdated” and “feudal. However, the government’s plans to abolish leasehold have not just been kicked into the long grass, but seemingly cancelled completely.
Which is perhaps why the Labour Party has been so vocal on this issue recently. Last month, they tabled a motion which called on the government to end the sale of private leasehold houses and replace current private leasehold flats with commonhold.
There was a vote at the end of the debate – which the government does not need to abide by – with 174 MPs voting in favour and most Conservative MPs abstaining. If you believe in a change of government at the next election, even if it is a coalition led by Keir Starmer as Prime Minister, then you can certainly see a momentum moving towards such a decision.
And that might perhaps seem odd to many Conservatives, who up until very recently, probably believed this would be a policy they would introduce and would be announced as legislation this autumn.
A long-held desire
You’ll hopefully know that leasehold reform in order to deliver a fairer, more transparent, less egregious system has been a mainstay of the Conveyancing Association’s policy work for many years. And we like to think we have made a significant difference in terms of the reform that has already been announced, and what may be coming over the horizon in the next couple of years.
However, I think we too would have liked to have seen some of the words we have heard around leasehold in recent times turned into actual action, because as we know it is the government of the day which is going to need to act to drive through reform.
At least giving homeowners the realistic opportunity to convert to commonhold would be a good start. Indeed, it may be the only way we can get residential multiple property buildings to net zero, given that it would be considered an improvement and therefore a freeholder cannot deliver without 100 per cent leaseholder agreement.
Certainly, as a trade body we are absolutely supportive of delivering fairness, particularly to those existing leaseholders, who have been ‘stuck’ by their own situation, and who may still be in a position where they can’t remortgage a property to a better deal, or where their attempts to sell their existing leasehold are hampered.
Not forgetting the large costs that have traditionally come with the purchase of a leasehold.
Although there has been significant improvement promised in that regard, the only delivery so far legislated is the abolition of ground rent above a peppercorn on new leases.
Just as soon as we get the legislation to deliver on the rest of it, life could become fairer, until the next opportunity to exploit leaseholders presents itself. And this is why we have so much legislation delivered over the last 100 years to prevent previous egregious abuse of this form of homeownership.
Strive towards abolition
Therefore, it’s still the case that the debate will continue to focus on a potential abolition of leasehold and the potential for a transition to commonhold.
I know that, even within our membership, there is still hesitancy in terms of what this move will mean and whether it is actually possible for a government to deliver, particularly in terms of existing leases. The Law Commission Commonhold report however delivered the solutions.
Certainly, from a conveyancing point of view, it will be a much more straightforward case process for firms to deal with, with a much greater degree of standardisation across commonhold cases. Therefore, I’m confident that – were this change to be made – it would not just put existing leaseholders in a better position but also the property industry as a whole.
In the meantime, we do need to see the government implementing the leasehold changes it has already set out – and for which there is pretty much cross-party- and industry-wide support – including tenant protection on ground rent levels, legal fees, etc.
Get that ball rolling sooner rather than later, and my own feeling is that an environment where fair, shared amenity homeownership becomes a much more tangible opportunity to be grasped.
