Shadow deputy prime minister Angela Rayner has pledged to make commonhold the default tenure for all properties, saying “if the government cannot deliver it, we are ready to do so”.
Speaking at the second reading of the Leasehold Reform Bill yesterday, Rayner accused the government of “chaos” for failing to ban the sale of new leasehold homes.
She said: “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. We will also enact the Law Commission’s recommendations on enfranchisement, commonhold and the right to manage in full.
“It is all well and good for the Secretary of State [Michael Gove] to say that the government plan to amend the Bill in the usual way, but is it too much to ask for the government to include a clause that bans leasehold in a Bill whose stated purpose was to ban leasehold?
“Why make those promises, only to produce a Bill that does no such thing? In a word, it sounds like chaos.
“Even the day before it was published, the department’s press release said that the Bill would ban developers from selling new houses under leasehold.
“Given the tiny proportion of leaseholds that are houses, rather than flats, it is hardly an ambitious pledge, but the Bill does not even introduce that ban.”
The Conservatives have previously indicated that commonhold will eventually be made the norm, but that won’t happen until a later amendment is made to the Bill.
With the commonhold system there is no time limit on how long you can own the property, while commonhold associations are made up of all freeholders.
Michael Gove said: “I actually agree that commonhold is the ideal form of tenure, but there are certain technical questions about when commonhold can apply, not least if a building also has commercial uses on the lower floors.”
And Bob Blackman, Conservative MP for Harrow East, said: “Clearly, we all want to see the promotion of commonhold. However… we need more education for individuals, so they understand not only their rights but the responsibilities they would take on with commonhold.”
Before the second reading of the Leasehold Reform Bill took place the Law Society warned that it falls short in multiple areas.
The Bill received its second reading in the House of Commons yesterday.
The society said the Bill fails to deliver on the government’s commitment to ban the sale of new leasehold homes, while it doesn’t require freeholders who manage buildings to belong to a redress scheme.
Thirdly it fails to set out the provisions for making buying or selling a leasehold property quicker and easier, by setting a maximum time and fee for the freeholder to provide the information required to make a sale.
Nick Emmerson, president of the Law Society, said: “We welcome the government’s commitment to deliver on these proposals by amending the Bill as it makes its way through Parliament.”
In terms of positive aspects of the Bill, Emmerson praised the proposals to require more transparency for both financial and non-financial information provided to leaseholders, while he praised the general commitment to make it cheaper and easier for existing leaseholders to extend their lease or buy their freehold.
Emmerson added: “Once the missing provisions have been included, the Bill could impact millions of homeowners and home buyers in England and Wales and could make improvements to the home buying and selling process.”