The Co-op Party is running a campaign for leasehold reform after the UK government shelved its plans to abolish the system in England and Wales.
Housing minister Michael Gove had pledged to abolish the system – which affects 10 million homeowners in Britain –but last month the plans were replaced with a series of protective measures.
The are said to include a cap on ground rents, more powers for tenants to choose their own property management companies and a ban on building owners forcing leaseholders to pay any legal costs incurred as part of a dispute.
Under leasehold, a property is only owned for a fixed period of time, with a legal agreement with the landlord stating how many years this will last. Ownership reverts to the landlord at the end of the period.
Most flats are leasehold, but houses can also leasehold – usually are if they’re bought through a shared ownership scheme.
The Co-op Party has called leaseholds – which can leave homeowners facing extra costs such as ground rents, service charges and repairs to common areas – a “feudal system”.
Gove’s plans to scrap it were dropped after reports of a pushback from Downing Street, with concerns from the prime minister’s office that there is not enough time to carry out the reform before the next election.
The Party – along with critics in the property sector – says the initial announcement saw many residents cancel their plans to undertake statutory lease extension. “The government’s U-turn has placed many leaseholders in limbo,” it said.
It added: “The Co-operative Party has long campaigned for leasehold reform: we believe we need to strengthen and promote commonhold alongside co-operative housing tenure, to protect homeowners and renters from unreasonable costs.”
A statement from the Department for Levelling Up, Housing and Communities said: “We are determined to better protect and empower leaseholders to challenge unreasonable costs.
“We have already made significant improvements to the market – ending ground rents for most new residential leases and announcing plans to make it easier and cheaper for leaseholders to extend their lease or buy their freehold.
“In line with our manifesto commitment, we will bring forward further leasehold reforms later in this parliament.”