Government Reforms Aim to Improve Homeownership in England and Wales

The government has announced a series of reforms aimed at making homeownership more accessible and affordable. The changes will simplify the process of buying a freehold, extending leases, and improving the management of blocks of flats and estates.

Proposals to Make Commonhold the Preferred Ownership Model

In an effort to modernize homeownership, the reforms aim to make commonhold the preferred alternative to leasehold. The government hopes to replicate the success of this model globally by making it more viable for homeowners in England and Wales.

Leasehold Reforms Address Historical Unfairness

The Law Commission’s report highlights a long-standing issue with leasehold properties, where many homeowners have faced escalating ground rents and unfair fees. The reforms seek to provide a fairer deal for leaseholders, giving them more control and financial freedom.

Streamlining the Freehold Purchase Process

One of the key reforms includes simplifying the process for homeowners wishing to buy their freehold. This change is especially significant as many leaseholders face the growing issue of shortening leases, making it more expensive to purchase their freehold.

Leaseholder Rights to Manage Properties

The reforms also empower leaseholders to manage their buildings, particularly in smaller blocks where self-management can be a more cost-effective and efficient solution. This change aims to reduce reliance on absentee freeholders and improve the overall management of properties.

Potential Challenges with Transitioning to Commonhold

While the Law Commission calls for a shift from leasehold flats to commonhold, experts caution that the transition may not be as simple as it seems. Challenges include legal grey areas around property management and the impact on institutional investors who rely on ground rents for income.