Confirmation has been received that the government will not proceed with the planned abolition of the leasehold system in England and Wales this year.
Previously, Michael Gove, the Secretary of State for Levelling Up, Housing, and Communities, had pledged to eliminate the “outdated, feudal” system as part of the government’s upcoming phase of leasehold reform. However, due to reported disagreements between Number 10 Downing Street and Gove’s department, these plans have been put on hold.
Nevertheless, certain measures are still expected to be implemented. These include placing a cap on ground rents, granting tenants increased control over property management companies, and prohibiting leaseholders from being responsible for legal costs in the event of a dispute.
Katie Cohen, a residential property partner at Keystone Law, criticized Gove’s earlier comments on leaseholds, calling them “unhelpful, short-sighted, and lacking guidance.” Cohen stated that many leaseholders who were in the process of making statutory lease extension claims were thrown into confusion, resulting in clients hastily withdrawing notices under the belief that the leasehold would be abolished.
Despite this, Cohen asserted that the majority of practitioners generally welcome leasehold reform. She emphasised the need for comprehensive changes to simplify the process of leaseholders acquiring their freeholds or extending their leases, as there are currently numerous pitfalls for the uninformed.
However, Cohen also acknowledged that the idea of overnight abolition of leaseholds is entirely unrealistic. The Association of Leasehold Enfranchisement Practitioners (ALEP) shared this sentiment, stating that the intricate nature of the system makes immediate abolition unfeasible. Mark Chick, ALEP Director and Senior Partner at Bishop & Sewell emphasised that leasehold is a highly complex area of the law that has evolved over centuries and cannot be simply abolished or replaced hastily. Chick further suggested that the government should take the necessary time for consideration and consultation on all aspects of the intended reforms, rather than rushing out unfinished or impromptu legislation that could cause confusion and unintended harm.
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