The UK government has announced plans to ban the sale of new leasehold flats in England and Wales as part of its drive to overhaul homeownership. The current leasehold system, where freeholders own the building and leaseholders purchase time-limited rights to live in it, has long been criticised for high costs and lack of control for residents. Ministers are pushing for a switch to commonhold, a model widely used internationally, which would give homeowners shared ownership and management of their buildings.
A white paper published this week confirmed that new leasehold flats would be prohibited, with plans to “reinvigorate” commonhold through a new legal framework. However, while the government says it wants to make conversion from leasehold to commonhold easier, it has not yet provided details on how this would work for existing leaseholders. Many homeowners, facing spiralling service charges and feeling powerless over building maintenance, have welcomed the reforms but remain concerned about their current situation.
Leaseholders like Kasia Tarker in West London have seen service charges soar, making their homes unaffordable or difficult to sell. Similarly, Jean Hopkin in Sheffield and Jenny Baker in Southampton have struggled with rising costs, with Jenny facing £7,200 a year in fees despite poor building upkeep. Managing agents argue these increases are due to rising energy and insurance costs, but leaseholders feel they have little say over the expenses imposed on them.
Housing Minister Matthew Pennycook has pledged further reforms to support existing leaseholders, though industry bodies warn that commonhold could bring additional financial and legal responsibilities for residents. Campaigners insist that while banning new leasehold flats is a step forward, real change must include mechanisms for existing homeowners to escape the leasehold system. The government plans to publish a draft Leasehold and Commonhold Reform Bill later this year, detailing how the new system will be implemented.
