Gove shelves plans to scrap leaseholds after Number 10 row

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Housing Secretary Michael Gove has dropped plans to abolish leaseholds in England and Wales after Downing Street officials argued there was not enough time to enact such major reforms.

Despite describing it as “an outdated feudal system” and pledging to get rid of leaseholds earlier this year, he will stop short of doing so, according to The Guardian. Gove had wanted to replace leaseholds for flats with a commonhold system, which would allow owners to make joint decisions about what should happen in shared areas of the building.

Crippling bills

In the aftermath of Grenfell, many homeowners have faced crippling bills and cannot sell their properties after buying leasehold flats that the freeholders refuse to make safe. New figures from the DLUHC show that in 2021-22, there were an estimated 4.98 million leasehold dwellings in England, with 38% of homes in the PRS owned on a leasehold basis.

Speaking on Sky News in January, Gove explained: “The fundamental thing is that leasehold is just an unfair form of property ownership. In crude terms if you buy a flat, that should be yours.”

Ground rents

However, he is still set to announce a range of measures to protect leaseholders next month, including a cap on ground rents, more powers for tenants to choose their own property management companies and a ban on building owners forcing leaseholders to pay any legal costs incurred as part of a dispute.

A spokesperson for the Department for Levelling Up, Housing and Communities told the paper: “We are determined to better protect and empower leaseholders to challenge unreasonable costs. In line with our manifesto commitment, we will bring forward further leasehold reforms later in this parliament.”

Property lawyer at JMW, David Smith, says Gove’s decision was predictable. “With the ongoing (and not exactly well met) challenges of PRS reform, standards in social housing, and the Building Safety Act, it was unrealistic to take on a fourth major reform programme.”

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