Housing Minister Proposes Bill to Eliminate Leaseholds across England and Wales

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Rachel MacLean, the Minister of Housing, has given the nod for a bill to gradually eliminate certain leaseholds across England and Wales. This legislative move will be a part of the upcoming King’s Speech set for 7 November, outlining the government’s strategy for the forthcoming year.

The government has been hinting at a reform in the contentious leasehold system for quite some time. This system has been notorious for imposing heavy fees on homeowners. The proposed bill is anticipated to outlaw leaseholds for new houses while exempting new flats.


According to estimates provided by the housing department, nearly 5 million leasehold homes exist in England, with flats constituting approximately 70% of these homes. Since peaking at 15% in 2016, the incidence of new-build houses being sold as leaseholds has dipped to a mere 1% by December 2022.

In a statement issued on social media, Minister MacLean asserts that the proposed bill is aimed at “restoring true home ownership to millions of people and ending the reign of exploitative freeholders along with inefficient profit-making management companies.”

Although no additional information was provided, she referred to a Sunday Times article, which proposed, post consultation, a cap on all existing ground rents at a significantly reduced rate, otherwise known as the “peppercorn” rate. Ground rents for properties sold after June 2022 have already been regulated.

The article further suggested an alteration in the standard contract lease extension period – from the existing 90 years to a staggering 990 years.

In the leasehold system, when a flat or house is initially sold, a lease is issued for a set period. The lease can be extended or the freehold can be purchased, but this process can prove to be costly and time-consuming.

The plans laid out by the government faced criticism from Matthew Pennycook, Labour’s shadow housing minister, who claimed leaseholders were being deceived. Pennycook presented the Labour’s counterproposal to undertake largescale and comprehensive reform of the leasehold system.

According to housing campaigner Harry Scoffin, the proposed leasehold ban needs to cover flats too. While he concedes that the abolition of existing ground rents is a daring move which will possibly bring down costs considerably, he believes that substantially more needs to be unveiled to liberate flat leaseholders.

The impending legislative changes are likely to simplify and cut down costs for homeowners intending to extend their lease or buy a freehold. The bill, expected to make its debut in Parliament before Christmas, is predicted to encounter obstacles, given the complexities associated with any transformation in the property market.

Fact box:

A freeholder is a person who owns a property, along with the land it sits on, in entirety. On the contrary, a leaseholder only has a lease granting them the right to use the property. The leaseholder, however, has to seek their landlord’s consent for any alterations or modifications in the property. Every time a leasehold house or flat is sold for the first time, a lease, typically between 99 and 125 years, is issued. In some instances, the lease could potentially extend up to 999 years. The provisions to extend a lease or purchase a freehold are available, but can be intricate and prohibitively expensive, requiring legal cost coverages. Additionally, leasehold house owners often have to bear costly ground rents and additional fees whenever changes are sought in their homes. Selling a leasehold house can also be challenging.