A series of recommendations recently published by the Law Commission of England and Wales could soon transform the future of home ownership in England and Wales.
The package of reforms could make it easier for property owners, including buy-to-let landlords, to purchase the freehold or extend their lease, and even take control of the management of their block of flats or an estate.
It has been estimated there are at least 4.3 million leasehold homes in England alone. If enacted, the reforms would help those owners and pave the way for a system where flats are sold with freehold title (as part of a commonhold).
These reforms – laid out in three reports – work in tandem with proposed changes from the government to create fit-for-purpose home ownership across England and Wales. The Commission’s reforms will lay the foundations for future home ownership to be freehold and tackle some key issues that existing leaseholders currently face.
This would be done by reinvigorating commonhold, which enables people to own a flat forever, with a freehold title and no landlord, as an option to replace leasehold for newly-built flats. Recommended reforms would also give leaseholders a route out of leasehold by making it easier to convert to commonhold.
In addition, the reforms would aim to improve the existing system for existing leaseholders by improving the process by which leaseholders can buy the freehold or extend their lease (“enfranchisement”). The Commission’s recommendations would create an improved enfranchisement regime that would be simpler and cheaper for leaseholders in flats and houses.
Finally, it would be made easier and cheaper for leaseholders to take over the management of their building without buying the freehold, by exercising the right to manage (“RTM”). The RTM lets leaseholders take control of services, repairs, maintenance, improvements, and insurance.
Professor Nick Hopkins, commissioner for property law, said: “The leasehold system is not working for millions of homeowners in England and Wales. We have heard how the current law leaves them feeling like they don’t truly own their home.
“Our reforms will make a real difference by giving leaseholders greater control over their homes, offering a cheaper and easier route out of leasehold, and establishing commonhold as the preferred alternative system. The reforms will provide a better deal for leaseholders and make our homes work for us, and not somebody else.”
These comprehensive and much anticipated reports mark a significant step towards much needed reform, according to Julie James MS, minister for Housing and Local Government, Welsh Government.
She commented: “It is clear that the current leasehold system often fails resident leaseholders and these reports will give us a better understanding of the issues involved; we now need to take the time to consider them carefully.
“The Law Commission have undertaken a mammoth task in unpicking the current law, engaging widely on the options for change, and putting forward comprehensive recommendations and I’m grateful to them for their excellent work.”