Leaseholds to eventually be replaced by commonhold
Leasehold flats will eventually be banned and replaced by commonhold – though this is not included in the Leasehold and Freehold Reform Bill.
As it stands the bill will make it easier and cheaper for homeowners to extend their release or buy out their freehold, but it doesn’t prohibit the sale of new leasehold flats.
With the commonhold system there is no time limit on how long you can own the property, while all freeholders are entitled to run the commonhold association.
Speaking in the House of Lords, Baroness Penn, a junior minister in the Department for Levelling Up, Housing and Communities, said abolishing leaseholds for flats was “inherently more complicated” that houses.
She said: “For flats, the government remains committed to reinvigorating commonhold to give developers and homeowners a viable alternative to leasehold should they choose it.
“We will be taking forward at a later date reforms to the commonhold system to allow that to replace the leasehold system.”
The issue was raised by Labour’s shadow spokeswoman for housing Baroness Taylor.
She said: “Of course we welcome the reform of leasehold but with five million leasehold properties in England, 70% of which are flats, there is disappointment that they are not included in the bill.”