Yesterday, Stephen spoke in the second reading of the Leasehold and Freehold Reform Bill. Stephen was disappointed that the Bill fails to end leasehold, as the Government promised, but welcomed several regulatory changes that will, at least, improve leasehold.
Leasehold is a form of property ownership where the leaseholder owns the property but not the land it is on, which is owned by a freeholder. The leaseholder pays ground rent and service charges to the freeholder, despite owning their own home. Michael Gove, the Secretary of State for Levelling Up, Housing, and Communities, described leasehold as “an outdated feudal system” in January.
The Government has introduced the Leasehold and Freehold Reform Bill to make it easier for leaseholders to buy the freehold on their property and strengthen leaseholders’ rights. Disappointingly, the Bill fails to end leasehold for good, as promised by the Government.
Stephen spoke in the second reading of the Bill. He criticised the Government for failing to end leasehold, while welcoming smaller reforms in the Bill.
Stephen raised the case of Barrier Point in East Ham, where leaseholders have found themselves paying between £6,000 and £12,000 extra in insurance premiums after flammable cladding was found in one of the building’s towers. He pointed out that a ban on insurance commissions and greater legal rights will help leaseholders in similar circumstances.
However, Stephen noted that the Bill does not address particular issues in the case of Barrier Point, such as the imbalance in liability between leaseholders who exercise their Right to Manage and their freeholder. He also urged the Government to make it easier for leaseholders in large multi-occupancy buildings, like Barrier Point, to purchase the freehold.
Lastly, Stephen suggested an amendment to the Bill on asbestos management. In apartment blocks, the landlord or freeholder often has regulated duties to manage asbestos in shared areas in the development. Leaseholder who buy their freehold can find themselves encumbered by unexpected and costly obligations. Stephen suggested requiring freeholders remove any asbestos before selling up to leaseholders.
“I am disappointed the Government are not abolishing the leasehold system like they promised and the Bill could certainly be improved,” Stephen said after the debate. “However, I am pleased the Government is, at least, strengthening the rights of leaseholders. It is a small step in the right direction.”