Plans to scrap 'feudal' leasehold system have been dropped

Plans to abolish leaseholds in England and Wales have been dropped after a row between Michael Gove and Downing Street.

The housing secretary had previously promised to ‘fundamentally reform’ the leasehold system, a form of home ownership which gives the householder the right to live in a property for a set number of years.

But abolishing leaseholds won’t be one of the series of reforms Mr Gove is set to announce next month, The Guardian reports.

The reforms are set to include a cap on ground rents, more power for tenants to choose their own property management companies, and a ban on building owners forcing leaseholders to pay legal costs incurred during disputes.

However Mr Gove is set to stop short of abolishing leaseholds altogether, despite promising to do so earlier this year, leading Labour to accuse him of ‘losing control’.

Lisa Nandy, Labour’s shadow housing secretary, said: ‘These reports suggest a department in chaos and a housing secretary that has lost control.

‘In the space of a few months, this government has caved into backbenchers on housing targets, locked themselves in internal battles on making the basic improvements for renters and is now rowing back on leasehold commitments.

‘Labour is the only party that will deliver much needed reform to give people secure, affordable and decent housing.

‘Where the Tories step back, Labour will step up and implement the Law Commission proposals in full.’

Downing Street apparently argued there isn’t enough time before the next general election to carry out the major reform.

A government source said: ‘Gove wanted to be a maximalist on leaseholder reform, but we simply haven’t got time to be maximalist right now.’

Up to 10 million Brits own their home through a lease, which means they have to pay extra costs including ground rents and service charges.

Mr Gove told the Sunday Times in January he wanted to scrap the system this year, saying: ‘I don’t believe leasehold is fair in any way.

‘It is an outdated feudal system that needs to go. And we need to move to a better system and to liberate people from it.’

He wanted to replace leaseholds for flats with a ‘commonhold system’. It’s used in other countries and would let owners make joint decisions about what happens in shared areas of the building.

Currently flat owners can be left having to pay out thousands to repair common areas, even if they disagree with the work being done.

Harry Scoffin is cofounder of Commonhold Now, an anti-leasehold campaign group.

He said: ‘Michael Gove has been clear that leasehold – which has its roots in serfdom and manorialism – has no place in a civilised society and must be abolished.

‘There are up to 10 million votes in this agenda. The Conservative party would be well advised to be bold here and phase out the toxic landlord-controlled leasehold regime.’

A Department for Levelling Up, Housing and Communities spokesperson said: ‘We are determined to better protect and empower leaseholders to challenge unreasonable costs.

‘We have already made significant improvements to the market – ending ground rents for most new residential leases, and announcing plans to make it easier and cheaper for leaseholders to extend their lease or buy their freehold.

‘In line with our manifesto commitment, we will bring forward further leasehold reforms later in this parliament.’

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