U-turn on abolishing leasehold system

Housing Secretary Michael Gove made a promise in January to scrap the leasehold system in England and Wales.

He has now performed a U turn, and will unveil measures to cap ground rents, hand tenants’ powers to choose their own property management companies, and prevent building owners from forcing leaseholders to pay any legal costs incurred as part of a dispute.

Reportedly the change is as a result of Downing Street pushing back on Gove’s plan, with the Prime Minister’s officials saying there’s not enough time before the next election to enact such reforms.

Katie Cohen, Keystone Law’s residential property lawyer, advises on leasehold enfranchisements, acting for both landlords and tenants.

She said: “The comment by Michael Gove back in January 2023 concerning the abolishment of leasehold was unhelpful, short-sighted and without any guidance.

“It sent many leaseholders undertaking statutory lease extension claims into a frenzy with clients withdrawing notices on a whim that leasehold would be abolished.

“A majority of practitioners within the field really welcome leasehold reform. There are far too many pitfalls for the unwary and the system as whole needs reformation to make the process simpler for leaseholders to acquire their freeholds or extend their leases.

“The idea that leasehold could be abolished overnight is completely unrealistic. As ever, the devil will be very much in the detail concerning the proposed reforms.

“It has been difficult to effectively advise clients as to their next steps without any real steer as to the likely changes to be announced.

“Whilst it is hoped that changes will be brought in quickly, in reality this will take time. There will be much debate on both the freeholder and leaseholder side to achieve a mutually acceptable and working piece of legislation that balances the interests of both sides.”



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