Housing reporter<\/span><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n New leasehold flats in England and Wales are set to be banned under the latest government plans to reform home ownership.<\/p>\n 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. <\/p>\n 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 buildings they live in. <\/p>\n Freeholders say leasehold is the “most effective way of managing large complex apartment buildings”.<\/p>\n<\/div>\n The government has yet to set out specific plans for the conversion of current leasehold properties to commonhold, but says it is “determined” to make this easier.<\/p>\n A white paper published on Monday stated the sale of new leasehold flats would be banned and commonhold “reinvigorated” with a new legal framework.<\/p>\n A draft Leasehold and Commonhold Reform Bill – including the detail of how the new system would work – will be published later this year, the government has said.<\/p>\n The new legislation would apply in England and Wales. There are an estimated five million leasehold properties in England, 70% of which are flats.<\/p>\n Housing Minister Matthew Pennycook said the reforms would put an end to “unfair practices and unreasonable costs at the hands of landlords”.<\/p>\n Existing leaseholders can feel like they have no control over costs for repairs and maintenance of the outside of their building.<\/p>\n Around 1,000 people contacted the BBC after a BBC investigation<\/a> about service charges in leasehold blocks last year. <\/p>\n<\/div>\n Kasia Tarker bought a one-bedroom flat in Southall, West London, in 2022. <\/p>\n Her service charge bills have increased from roughly \u00a365 per month in 2022 to more than \u00a3200 per month this year.<\/p>\n She said she felt helpless and could not afford the charges. <\/p>\n “I am going have to try and sell the flat or become homeless, I don’t know what I am going to do.”<\/p>\n FirstPort, who took over management of Kasia’s development in 2023, said the “increases in areas such as insurance and health and safety costs” were beyond its control.<\/p>\n Kasia said she would like more control over her service charges but the government’s commonhold proposals were for new builds, so would not help her in her current situation. <\/p>\n<\/div>\n Jean Hopkin, another leaseholder who got in touch with the BBC, said the service charge for her three-bedroom flat in Sheffield had increased 356% – from \u00a3106 a month to \u00a3483 in four years – and was unsellable because of the high charges. <\/p>\n Jenny Baker in Southampton is also struggling to find buyers because of “unjustified” service charges that have gone up to \u00a37,200 a year. <\/p>\n “The state of the apartment block is just terrible. The windows don’t get cleaned and there’s black mould on the outside of the building – what on earth am I paying for? <\/p>\n “I feel stuck \u2013 I can never come out of it. I feel like I have absolutely no control, and it makes me feel really anxious.”<\/p>\n Rendall & Rittner, which manage Jean and Jenny’s buildings, said the company did “not profit from or mark up any costs”. <\/p>\n According to property company Hamptons, the amount of money leaseholders pay for communal maintenance and services in their building has risen by 11% in England and Wales between 2023 and 2024 to an average of \u00a32,300.<\/p>\n Companies responsible for managing buildings have said a rise in costs can be attributed to legitimate expenses including energy prices and higher inflation rates but many leaseholders felt the costs were unfair. <\/p>\n Under the current system, it is the freeholder or landlord that appoints a managing agent. Under a commonhold system, residents would have more autonomy over what they pay and who they appoint to do maintenance, the government said. <\/p>\n<\/div>\n What is the difference between leasehold and commonhold? <\/p>\n Natalie Chambers, director of the Residential Freehold Association (RFA), said the measures “should not be seen as a trade-off between leasehold and commonhold”. <\/p>\n “Millions of leaseholders across the country are perfectly content with the tenure and we firmly believe that leasehold is the most effective way of managing large complex apartment building.” <\/p>\n She added that a commonhold system would mean “residents would face greater financial and legal responsibilities for block maintenance and management”.<\/p>\n<\/div>\n The National Leasehold Campaign (NLC) said it was “delighted” about the announcement and called today’s white paper is a significant step forward.<\/p>\n But NLC founder Katie Kendrick said it was “paramount” that those currently living in leasehold buildings were not forgotten.<\/p>\n She said: “While focusing on preventing future leasehold abuses is crucial, it’s equally vital to address the plight of existing leaseholders currently bound by the inequitable leasehold system. <\/p>\n “Commonhold conversion mechanisms are essential to offer an escape route for those trapped.”<\/p>\n Mr Pennycook said the government would “continue to implement reforms to help millions of leaseholders who are currently suffering”.<\/p>\n In 2023, Conservative housing secretary Michael Gove expressed a desire to abolish the leasehold system entirely, but later opted for reforms instead<\/a>.<\/p>\n Several of these reforms have now been implemented, including the end of a “two-year” rule on extending a lease, and new rules on the right-to-manage properties in a mixed-use building.<\/p>\n Additional reporting by Jade Thompson<\/i><\/p>\n<\/div>\n<\/div>\n![\"BBC](\"https:\/\/ichef.bbci.co.uk\/news\/480\/cpsprodpb\/5b35\/live\/3000c7a0-e595-11ef-a819-277e390a7a08.jpg.webp\")
BBC<\/span><\/div>\n<\/div>\n![](\"https:\/\/www.bbc.com\/bbcx\/grey-placeholder.png\")
![\"Kasia](\"https:\/\/ichef.bbci.co.uk\/news\/480\/cpsprodpb\/3a6e\/live\/425be8e0-e617-11ee-b127-15aff458b025.jpg.webp\")
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‘Significant step’<\/h2>\n<\/p>\n