New proposals aim to help leaseholders own their buildings

Leaseholders could find it easier and cheaper to buy the freehold of their building under new government proposals which enter the consultation process today.

Homeowners and the housing industry are being invited to give their views on proposals from the Department for Levelling Up, Housing and Communities to allow more leaseholders in mixed-use buildings to take control and ownership of their building.

The consultation follows Housing Secretary Michael Gove’s announcement of a reset in the government’s approach to building safety this week, when he wrote to the housing industry requiring them to pay to fix the cladding crisis.

Leasehold Minister, Lord Stephen Greenhalgh, said: ‘The current leasehold system is outdated, unbalanced and broken and we are determined to fix it.

‘Our proposals aim to rebalance power and should see more leaseholders than ever before owning the full rights to their homes. This comes on top of our new approach building safety, which includes decisive action to protect leaseholders’

The consultation, running for 6 weeks until 22 February 2022, seeks view on proposals to give more leaseholders the ability to manage or own their properties, in buildings where there is a mixture of homes and other non-residential facilities like shops and restaurants.

Under the current system, only some residential leaseholders can choose to buy their building outright through enfranchisement or take over the management of the building.

Currently, if shops and other similar properties take up over 25% of the total floorspace then leaseholders cannot collectively bid to take control of their building.

New proposals could give these leaseholders the right to manage or buy their building outright, by increasing this limit to 50%, enabling them to have more control over how shared facilities are run and have the final say on building maintenance costs.

The proposals also include a ‘mandatory leaseback’, which would require landlords to keep a lease on some properties in the building, reducing the cost of a collective buyout of their building.

Julie James, Welsh Minister for Climate Change with a responsibility for housing, commented: ‘I welcome this consultation as an important step towards implementing the Law Commission’s recommendations on leasehold reform, which were jointly commissioned by the Welsh and UK governments. I want us to work together on these important reforms to ensure they reflect the best interests of leaseholders in Wales.’

Photo by Jimmy Chang