On Wednesday, the British government announced a major reversal of its plan to abolish the leasehold system in England and Wales. The announcement was made by Michael Gove, the Secretary of State for Environment, Food and Rural Affairs, who said that the government had listened to the concerns of leaseholders and would now be taking a different approach.
The leasehold system has been in place in England and Wales since the 16th century and is a form of tenure whereby a tenant pays rent to a landlord for the right to occupy a property. The system has been criticised in recent years for its high costs and lack of transparency, with leaseholders often facing unexpected costs such as ground rent increases and service charges.
In response to these concerns, the government had proposed abolishing the system altogether, but this plan has now been reversed following pressure from leaseholders and other stakeholders. Instead, the government will be introducing a range of measures to make the system fairer and more transparent.
These measures include capping ground rents at 0.1% of the property’s value, introducing a new ‘right to manage’ scheme which will allow leaseholders to take control of their buildings, and introducing a new ‘leasehold reform bill’ which will give leaseholders more rights. The government has also committed to providing more support for leaseholders who are facing financial difficulty due to the cost of their leases.
The announcement has been welcomed by many leaseholders, who have long campaigned for reform of the system. However, some have expressed concern that the measures do not go far enough and that more needs to be done to protect leaseholders from unfair practices.
Overall, the government’s reversal of its plan to abolish the leasehold system is a positive step forward for leaseholders in England and Wales. The new measures should make the system fairer and more transparent, and provide much-needed support for those who are struggling financially due to their leases. However, it remains to be seen whether these measures will be enough to protect leaseholders from unfair practices in the long term.