Leasehold home ownership has been described by both the Tories and Labour as ‘feudal’, but despite a general consensus that the model is at best undesirable, onerous and expensive, and at worst financially ruinous, wholesale reform has been slow to come.
Its origins may be in a medieval tithing system, but leasehold only really took off with the post-war social housing boom when slum housing made way for new high-rise flats and large estates and, in the decades to come, swanky new-build flats.
Home ownership may be the end goal for many stuck with dodgy landlords and extortionate private rents, but the leasehold scandal shows how buying your dream home can bring problems even worse.
In the 1960s, public outrage that elderly leaseholders were being evicted form their homes when their leases expired led to a reform act allowing them to buy out their freeholders. In the late ‘80s that was extended to ensure freeholders had to give their leaseholders first refusal if they were selling up.
Commonhold – a system when individual flat owners are freeholders – was created in 2002. Take-up has been limited and stories of spiralling ground rents, extortionate service charges for sums that appear to bear no relation to the work carried out, and the difficulty launching a legal challenge to dispute costs, have blighted homeowners across the country – including those on council-owned estates.
Many of the reforms in the report prepared by, among others, MP Helen Hayes, are not particularly new or radical ideas. They believe if ground rents can be capped and incentives are brought in, commonhold will gradually become the norm, as it is in many other countries.
For people whose finances and futures have been ruined by buying a home they can’t afford but can’t sell, the question is whether reform is a fudge – and what is really needed, is an outright ban.