A leading expert at national chartered surveyor Bruton Knowles is welcoming the government’s update to its leasehold system in England and Wales.
Dorian Wragg, a partner at the firm, describes the reform – which aims to address longstanding concerns from leaseholders about excessive service charges and limited property rights – is a positive step forward.
Housing Minister Matthew Pennycook says he wants to scrap leasehold, which will impact five million homes in England, before the end of this parliament in 2029. Pennycook had previously stated that abolishing leasehold would have a “lasting, generational impact”, going on to describe the system as “inherently unfair” for leaseholders.
Wragg says the proposed changes couldn’t come soon enough and will empower leaseholders: “This is an extension of the general thrust of government policy over the last three decades, with the intention of modernising the centuries-old feudal land-holding system and favouring leaseholders.
“Of course, there have been plenty of changes over the years to slowly enact changes to the leasehold system, as it stood. The Leasehold Reform, Housing and Urban Development Act 1993 (as amended) enable a qualifying tenant, one with a remaining lease term of more than 21 years, to join with the leaseholders of other flats in a building to join together and buy the freehold of that building – empowering owners of short leaseholds to extend the term of their leases.
“The Commonhold and Leasehold Reform Act 2002 introduced commonhold, a new way of owning land based on the Australian and American models, while the Leasehold Reform (Ground Rent) Act 2022 ended ground rents for new long residential leases.
“And then the Leasehold and Freehold Reform Act 2024 – followed on from the 2022 Act and improved the transparency over service charges, giving leaseholders a new right to request information about service charges and the management of their building, administration charges and landlords commission on building insurance policies. It also extended the standard lease term to 990 years and gave leaseholders the right to extend their leases, buy their freeholds and take over the management of their building.”
Wragg says the proposals would give leaseholders increased powers but he recognises that not all will want to utilise these powers .
“It is hand in hand with the changes that Building Safety Act and the Fire Safety Act have undergone, which makes significant persons personally responsible for the management of health and safety matters in the buildings.
“The implications of self-management are significant and, where fault is found, it will have direct implications for those people managing residential buildings. The risk of non-conformance to statutory legislation in the wake of Grenfell may ultimately deter leaseholders from the self-management of buildings.”
