Landlords are hoping commonhold will deliver lower service charges, according to new research.
Almost half of the landlords polled (46%) said they were hoping for lower service charges under the new system. Just over a fifth (21%) said they were looking forward to better maintained buildings and the opportunity to charge higher rents as a result.
One in 9 (11%) said commonhold would help them retain occupants longer. One in eight landlords (12%) had various other reasons for embracing commonhold.
While 91% of the landlords polled by specialist lender Landbay said they hoped for improvements under a new commonhold system, 9% said they couldn’t see any benefit.
However, previous polling from Landbay has found that nearly two-thirds of landlords (64%) do not believe the Government could deliver leasehold reform by the end of this parliament.
A white paper published in March stated the sale of new leasehold flats would be banned and commonhold “reinvigorated” with a new legal framework[1].
In March, the government said it would ban the sale of new leasehold homes by the end of this parliament in what ministers described as the end for a centuries-old “feudal system”. The government says it wants to move to a system of home ownership that is more in line with the rest of the world, known as commonhold, where homeowners own a share of and have control over the buildings in which they live.
Under the current leasehold system, third-party landlords known as freeholders own the building and a leaseholder buys the right to occupy a flat within it for a fixed time period.
Landbay asked landlords if there were practical reasons that would prevent them from embracing commonhold.
Almost half mentioned the threat of mismanagement by commonholders (49%) while a similar number worried about the need to secure 100% agreement among leaseholders (49%).
More than a quarter (26%) were worried about their lack of liquidity and said they wouldn’t have the cash reserves. Just over a fifth (22%) said their current freeholder ran their property well.
Landbay’s research polled the views of landlords owning approximately 3,000 properties throughout England and Wales.
