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The housing minister has stated that completely abolishing the leasehold system in England and Wales immediately is “almost certainly impossible.” This comment comes in the context of Labour’s 2024 general election manifesto, which pledged to “finally bring the feudal leasehold system to an end.” Matthew Pennycook clarified in a recent speech that while the government intends to dismantle the leasehold structure before the next election, this would be achieved gradually by making it easier for leaseholders to gain control over their buildings, rather than through an abrupt removal of leasehold arrangements.
Addressing critics who accuse the government of delaying leasehold reforms and stepping back from Labour’s original promises, Pennycook insisted these criticisms were unfounded. Speaking at the Institute for Government think tank, he emphasized, “In making that manifesto commitment to bring the leasehold system to an end, we were not promising to immediately abolish leasehold outright.” He elaborated on the complexity of immediately terminating around five million leases across England and Wales, raising concerns over legality, mortgage market implications, and the establishment of commonhold associations needed to manage such properties.
Pennycook also took aim at the Green Party’s more radical stance, which calls for “total abolition of leasehold.” In response, he said, “It’s very easy to put out glib soundbites – end leasehold – we’ve got a serious policy programme here.” Green MP Carla Denyer countered by clarifying that her party’s aim was “not to abolish leasehold immediately but to phase it out,” adding, “The Greens are clear and consistent: We would end the leasehold rip off.” The leasehold system allows individuals to occupy a property for a set period under a lease from a freeholder. A common grievance among leaseholders is rapidly increasing service charges imposed without their control, covering building maintenance and management costs.
Currently, the government is considering a draft leasehold bill designed to facilitate the transition to a commonhold system, where residents collectively own and manage their buildings without leases that expire. The draft legislation proposes banning new leasehold flats and capping ground rents — annual fees paid to freeholders — at £250 per year. Pennycook explained that these changes would give leaseholders the power to assume control over their properties and fees, choosing to convert to commonhold “when they judge it is the right time for them.” He stressed that ending leasehold should be a careful, step-by-step process rather than a sudden upheaval, adding, “This is how leasehold ends – not through an abrupt and chaotic single moment of destruction…but by taking a methodical approach.” He anticipated the new commonhold framework would be in place before the current Parliament concludes in 2029.
While groups such as the National Leasehold Campaign acknowledge the challenges and agree leasehold cannot be eliminated overnight, co-founder Katie Kendrick called for a firm timetable and tangible progress due to leaseholders’ growing impatience. Activists like Harry Scoffin of Free Leaseholders express frustration as well, criticizing Pennycook’s speech as “a wasted opportunity for the government to show urgency in freeing millions of leaseholders.” Notably, there is broad, cross-party agreement on the need for reform, with the Conservatives and Liberal Democrats also signaling intentions to make leasehold arrangements more tenant-friendly. The government’s upcoming legislation includes other provisions, such as banning eviction without cause, which Pennycook believes will enhance tenant security without prompting a mass exit of landlords. He pointed out that any observed landlord departures are more likely linked to Conservative-era tax changes than new regulatory measures
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