Fixing a Broken Leasehold System

Fundamental reform of the residential leasehold system is long-overdue.  

For so many across West Berkshire and the country, the dream of owning their own home has become a financial trap they have little control over – facing rising bills and faceless managing agents that don’t deliver even the basics.  

Thousands have struggled to sell their property, secure mortgages, and are forced to put major life decisions on hold because of opaque costs that, as one leaseholder said, has left them with “no future other than slow bankruptcy.”

We need to fix the injustices in this system and as part of my work on the Housing, Communities, and Local Government Select Committee, I have been working with members from across the political spectrum to scrutinise the Government’s draft Commonhold and Leasehold Reform Bill and identify where it must be improved.  

The draft Bill certainly moves us in the right direction. The introduction of a commonhold framework, the abolition of leasehold for newbuild flats, and the removal of the outdated forfeiture system are hugely encouraging changes that tackle some of the most damaging elements of the current model.  

But after bold promises to “bring the feudal leasehold system to an end,” there are still important areas where the legislation is too timid.  

Ground Rents

A key commitment is the Government’s plan to cap annual ground rents for existing leaseholders at £250 per year. That will come as a relief to millions of residents as, after all, the Competition and Markets Authority concluded that it saw “no persuasive evidence that consumers receive anything in return.”

However, the current timetable falls short. Under current plans, the cap won’t come into force until late 2028. At the same time, the Government has also proposed a 40-year transition period before ground rents are reduced to a peppercorn rate.  

I recognise that the market needs time to adjust to these changes, but if the Government accepts that ground rents should ultimately disappear, why should leaseholders have to wait so long and shell out up to £10,000 over the coming decades for something that delivers little or no benefit?

Leaseholders have waited too long already, and the Committee have recommended bringing the cap forward to late 2027 and asked Ministers to explain why the transition period could not be significantly shortened.  

Service Charges & Managing Agents

The second major blind spot is service charges and the conduct of managing agents.  

Cases continue to appear in my inbox of residents telling me they feel powerless as they are hit with sudden, unexplained increases in bills while basic repairs in their buildings are not fixed for months on end. After years of household budgets being squeezed, many families simply cannot afford these unexpected costs as some are taking on second jobs or cutting out everyday essentials to make ends meet.  

This has been the case for too long and earlier in the year, I questioned both the Managing Director of FirstPort and Minister Matthew Pennycook about the unacceptable standards of service that West Berkshire households continue to face.  

This is why I strongly support the Committee’s recommendation for the bill to include an independent regulator of property management agents with real enforcement powers – one that can investigate and impose penalties for poor practise and ultimately revoke licenses from companies that repeatedly fail residents.

Colleagues from across party lines now agree that we need to overhaul this system. The Government’s draft Bill puts us on the right track, but to really make a serious difference for the nearly five million leaseholders across the country, we need to be swifter and more ambitious.

Accelerating reforms to ground rents. Strengthening protections against managing agents. Making it easier and more affordable for leaseholders to convert to a modern commonhold system.  

As we wait for the Government’s response, I will continue to cooperate with cross-party members to bolster these reforms and ensure that leaseholders across West Berkshire finally get the control, transparency, and security they are long-overdue.