Author : MaryAnne Bowring
Labour Party Promises To Abolish Leasehold
Keir Starmer, the leader of the Labour Party, received a rousing response from commonhold campaigners during his speech at the British Chamber of Commerce recently. He made two important promises that excited the campaigners.
Firstly, he pledged to reduce house prices by significantly increasing the number of homes available. Secondly, he expressed his commitment to addressing the issues associated with unfair leasehold tenure. He promised to implement the reforms recommended by the Law Commission three years ago. During a recent parliamentary debate on leasehold, Lisa Nandy, another Labour MP, also made an important announcement. She pledged to introduce a law to abolish leasehold and introduce commonhold real ownership within the first 100 days of a Labour government. Commonhold allows homeowners full ownership rights over their homes and the biggest change - the land they are built on.
The announcements made by Starmer and Nandy have enthused the commonhold campaigners who have been advocating for these changes.
Many view the Labour Party's return to a pro-homeownership agenda as a positive development. These recent speeches by party leaders are in tune with the stance taken by Tony Blair almost 30 years ago. As stated in a policy pamphlet, Blair had committed Labour to promote commonhold as a replacement for the outdated leasehold system in new-build apartment complexes.
Disappointingly, during their time in office, Labour went back on their leasehold abolition promise by not mandating it for new blocks of flats within the Commonhold & Leasehold Reform Act in 2002. Making it optional was seen by many as a compromise with the widespread number of property professionals who opposed mandating commonhold.
Political observers have praised the Labor Party for returning to this essential pro-homeownership agenda. This move would target inequality and redistribute power and wealth among millions of citizens. At a time when Labour faces criticism for not being radical enough on tax issues, they can afford to be bold and radical when it comes to promoting commonhold. A poll conducted last month revealed that most voters from all three major parties in England and Wales, who participated in the 2019 elections, support ending leasehold and introducing commonhold as a replacement.
In an interview with Sky News, Lisa Nandy, the Shadow Housing Secretary, expressed her concerns about the current leasehold system in England and Wales. She stated that approximately five million people are struggling with this outdated and unfair system, which she described as feudal and archaic. Nandy emphasised that England and Wales are outliers globally for retaining this system.
She also highlighted the frustration faced by homeowners when they discover that they don't truly own their homes, even after saving up and obtaining a mortgage. She pointed out that leaseholders can be subjected to arbitrary and unfair charges without any explanation or accountability from the parties involved. It might be a minor annoyance for some, but the consequences of not truly owning their homes can be disastrous for others.
To address these issues, Nandy announced that the Labour Party would end leaseholds for newly built houses and introduce a commonhold system for flats. She asserted that commonhold has been successful in various countries worldwide, and there is no reason why it wouldn't work in England and Wales. Matthew Pennycook, the Shadow Housing Minister, also emphasized the need to overhaul the current system. He stated that Labour is committed to implementing the Law Commission's recommendations on enfranchisement, commonhold, and the right to manage in their entirety.
Katie Kendrick, representing the National Leasehold Campaign, expressed delight at Labour's pledge to abolish leasehold. However, she cautioned that leasehold reform had been a recurring issue over the years and called for cross-party solutions. Kendrick emphasized that if the current government fails to deliver on its promises, leaseholders will look to the next government to implement widespread adoption of commonhold.
Mary-Anne Bowring FIRPM FRICS FARLA FCABE Founder/Head of Asset Management
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