Great News For Flat Owners?

Outright Ban on New Leasehold Flats Moves Closer

The UK government is moving closer to banning new leasehold flats in England and Wales as part of its plan to reform home ownership. Currently, leaseholders buy the right to live in a flat, while freeholders own the building. The government aims to replace this with a "commonhold" system, where homeowners have more control over their properties and the building as a whole.

Under commonhold, residents can manage their building and hire or fire agents, unlike the leasehold system, where a freeholder controls costs. Housing Minister Matthew Pennycook called the leasehold system "inherently unfair," as it often leaves residents with little control over increasing service charges for maintenance and repairs.

While a draft Leasehold and Commonhold Reform Bill is expected later this year, the government plans to ban the sale of new leasehold flats and make it easier to convert existing leasehold properties to commonhold. However, this new system will only apply in England and Wales, where there are around five million leasehold properties, 70% of which are flats.

Reforms are aimed at reducing the financial burden on leaseholders, like those who have seen their service charges skyrocket. Critics, such as the Residential Freehold Association, argue that leasehold remains effective for managing large buildings, but many leaseholders are advocating for more control over their living situations.

The government promises reforms to help existing leaseholders transition to commonhold, ensuring they aren't left behind in this shift.

What are your thoughts? Will this make the sale of flats easier?