SHARON HODGSON MP: Can we trust the Government to tackle leasehold injustice?

Leasehold properties refers to properties and the land underneath that buyers do not own outright. Instead, buyers agree to live in the property for a fixed period of time. Since 2018 I have been campaigning to reform the leasehold process that has left many of my constituents feeling trapped, and cheated of ownership of their own homes.

In 2018 we estimated that 12% of properties in Washington and Sunderland West were sold as leaseholds, so I launched a consultation that November to better understand local people’s experiences and to identify exactly what needed to change.

Having gathered a plethora of evidence from constituents that illustrated exactly how exploitative and unfair the leasehold system is, I lobbied consecutive Housing Ministers to demand that leaseholders must be properly informed of their rights and the nature of leasehold contracts, protected from unexplained extortionate charges, and receive more support to purchase their freeholds and extend their leases.

Since 2018, the government have consistently promised major reforms that have taken years to come to fruition. This Leasehold and Freehold Reform Bill is a weakened and watered-down version of what was previously promised. Principally, this Bill fails to ban leaseholds for new flats despite banning leasehold for new houses, blatantly ignoring a large proportion of homebuyers, and leaving those buying flats trapped in an archaic system.

Furthermore, the Bill fails to protect current and future leaseholders from the injustice of forfeiture. As things stand, the law of forfeiture currently gives the landlord the right, following a breach of a clause in the lease or an unpaid debt of £350, to terminate the lease, regain possession of the property and pocket the unmerited windfall gain that would accrue from its sale. The Law Commission proposed its repeal in 2006, but the government consistently have failed to address this.

Finally, this Bill fails to act upon the recommendations of the Law Commission again, by disregarding the Commission’s recommendation to reinvigorate commonhold property ownership as a workable alternative to leasehold, for both existing and new homes. Commonhold is an alternative to the long leasehold system that would see homeowners be able to purchase the freehold and therefore never be timed out of their property or forced to endure the process of extending a lease.

Leaseholders deserve legislation that effectively secures their right to their homes. That is why a Labour government will make commonhold the default tenure for all new properties as part of our commitment to fundamentally and comprehensively reform the leasehold system.

Ultimately, we urgently need legislation to tackle the rampant injustice embedded in our leasehold system. Whilst the Bill does address a number of the deepest flaws, without further comprehensive reforms it will still only provide a surface-level solution.