New laws to ban leaseholds will help homeowners 'take back control' vows Michael Gove
27 November 2023, 8:20 | Updated: 27 November 2023, 8:44
New laws to ban leaseholds for new homes will help homeowners to "take back control", Michael Gove has told LBC.
The Levelling Up Secretary will bring forward long-promised new rules which will make it easier and cheaper for people to extend their leases or buy the freeholds.
Mr Gove told LBC the new rules will "allows leaseholders to take back control of their properties".
It will mean leases can extended to 990 years, and firms will have to be more transparent about service charges.
Ground rents will also be reduced to just a "peppercorn" - though the exact details have not yet been brought forward.
There are an estimated five million leasehold homes in England - 70 per cent of which are flats.
Campaigners are disappointed that the laws will ban them for new homes - but not for new flats, which Mr Gove had promised.
Mr Gove said: "We can't at a stroke get rid of it, but we are taking a huge step forward, by having a 990 year lease, people will be able to own their flat, in effect.
"Yes, leasehold will still exist, but effectively people will have control over their property at last."
The bill, and the details, will come forward to the House of Commons later today.
Mr Gove told LBC: "When people are buying a leasehold flat, they are buying somewhere that is their family home.
"We need to make sure they are not susceptible to either ground rents being jacked up, service charges being forced up, or worst of all, knowing having bought that flat, the value is going to diminish over time as the lease winds down.
"It will enfranchise and liberate leaseholders, and give them control over their property and the money they have invested into their home."
It will also:
- Make freeholders or managing agents issue bills in a more simple, standard format
- Make it easier and cheaper for leaseholders to take over management of their building and able to appoint the managing agent of their choice
- Ban leaseholders from having to pay their freeholder's cost when leaseholders exercise their enfranchise rights
- Making it cheaper for leaseholders to exercise their rights as they will no longer have to pay their freeholder’s costs when making a claim.
- The Government will also give greater rights to those in mixed-use blocks of flats. Currently leaseholders in these buildings are barred from taking over the management of the site or buying its freehold if more than 25% of its floor space is commercial – such as shops or offices on the ground floor. The Government will now increase the floor space limit to 50 per cent
- Removing the requirement for a new leaseholder to have owned their house or flat for two years before they can extend their lease or buy their freehold.