Reinvigorating Commonhold

Lessor under the magnified glass Further to previous blogs regarding leasehold reforms mentioned in the White Paper, the government is committed to promote fairness and transparency for the growing number of leaseholders.

One of the reforms on the table is labelled 4.38 and reads as such:

“We will consider further reforms through the consultation to improve consumer choice and fairness in leasehold, and whether and how to reinvigorate commonhold.  We will also work with the Law Commission to identify opportunities to incorporate additional leasehold reforms as part of their 13th programme of Law Reform, and will take account of the work of the All-party Parliamentary Group on Leasehold and Commonhold.”

Commonhold as it is known in the rest of the world is the home ownership system which does not include a landlord who charges ground rent or who has the power after a period determined in the lease, to increase that ground rent, sometimes doubling the amount.

Although mention is made here of commonhold and to the clear majority of those whose homes are owned by this model, is likely to be the future, there is no aggressive action in government to make this the norm.

Leasehold continues to be popular especially with property developers because it provides continuing finance for future developments.  It also makes the landlord responsible to appoint agents and oversee the efficient management of their properties.  Legislation is continuously being passed to improve standards in this management and has been successful to varying degrees.

The main focus of government housing policy is about increasing the supply of new homes.  When and indeed if, this ever eases, only then is it likely that commonhold will become a ‘product’ which comes into greater demand.

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