Labour drops pledge to abolish leasehold within 100 days

Labour has dropped its pledge to introduce legislation to abolish leasehold within the first 100 days of government if it wins the general election.

The National Leasehold Campaign wants to see the system abolished

The party is still committed to getting rid of the system, but those working on the policy believe they need more time to enact such a radical measure after the Tories watered down their own promises on reform.

The National Leasehold Campaign call leasehold ‘rotten to its core’. Pic: NLC

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Harry Scoffin, founder of the Free Leaseholders campaign, called the change in timing “worrying” given “leaseholders have been mucked about by a succession of governments for decades now”.

“With a general election only months away, we need firm assurances that Labour still intends to end leasehold and enact mass commonhold, as they have always promised. 5.3 million households will be looking at their manifesto hoping for better,” he told Sky News.

A Labour spokesperson said: “The Tories have had 14 years to deliver and they’ve broken their promises to leaseholders. An incoming Labour government would be left picking up the pieces.

“Labour’s commitment to comprehensive leasehold reform hasn’t changed and we’ll bring forward ambitious legislation to enact all of the Law Commission’s remaining recommendations at the earliest opportunity if we’re privileged enough to serve.”

What is leasehold?

Leasehold is a type of property contract that allows the homeowner to live in a property – usually a flat – for a fixed term.

Under this system, leaseholders often have to pay expensive ground rent and service charges to freeholders, who own buildings or land on which the homes are built.

The costs associated with leasehold have soared in recent years, especially in light of the building safety scandal that emerged after Grenfell, with people across the country facing “life-ruining” bills for repairs.

The rising charges have made it increasingly harder for people to sell their properties, leaving them trapped in homes that are effectively worthless.

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Last May, the then-shadow housing secretary Lisa Nandy said that a future Labour government would bring forward legislation to abolish leasehold within 100 days.

It is not clear how quickly Labour now intends to pass anti-leasehold laws, with the party only saying they will enact the reforms at the “earliest opportunity” within the next parliament if they win the election.

Insiders said 100 days is not enough to fix the “broken system” and the task has been made more onerous by the modest scope of Michael Gove’s Leasehold and Freehold Reform bill.

Labour MP Barry Gardiner, who has spent years campaigning to abolish leasehold, defended the move amid concern from housing campaigners.

He told Sky News: “Labour is absolutely committed to wholesale leasehold reform in its first term.

“The issue is not whether the bill gets its first reading on day 95 or day 105 – it is whether it passes into law. That is what leaseholders need and it is what a Labour government will do.”

Last year Mr Gove, the housing secretary, rowed back on a promise to abolish the leasehold system, which he said was “feudal and outdated”.

His subsequent bill to reform the system, laid before parliament in November, has been widely criticised by Tory and Labour MPs for being “weak” and “unambitious”.

Critics say that despite bold promises from successive Conservative ministers to reform leasehold, the legislation enacts only a small proportion of the 300+ recommendations made in the Law Commission’s 2020 reports, which set out proposals for the abolition of leasehold.

One racket that MPs and peers want banned is “forfeiture”, under which people can be threatened with the loss of their home over non-payment of just small sums of money.

It’s also been reported that the Treasury is attempting to force Mr Gove to abandon plans to reduce leasehold ground rents to a “peppercorn” rate, effectively zero, to encourage landlords to sell the freehold to leaseholders.

Mr Gove’s bill does ban the sale of new leasehold houses but not the sale of new leasehold flats, which make up 70% of properties affected.