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Labour MP Says Leasehold System Is Trapping People In Homes They Can't Sell

(Alamy)

5 min read

Labour MP Barry Gardiner has put forward an amendment to the Leasehold and Freehold Bill to reform service charges and remove another income stream for freeholders, as he continues to campaign for the abolition of the leasehold system.

The MP for Brent North has campaigned to end the leasehold system for more than two decades, and advocates for replacing it with commonhold. Commonhold allows residents in a block of flats or estate to own the freehold of their building, and removes the time limit which people can live in their accommodation for. This system is used in the United States, Australia and across Europe.

Gardiner told PoliticsHome the leasehold system has inflicted human suffering on millions of people, and has trapped many of his constituents in homes they do not want to live in and cannot afford to sell.

“We haven’t begun to talk about the human problems here. About the people who have huge mental health problems, the people who have committed suicide,” he said, referring to the emotional toll he believed leasehold has caused for many.

“Many of them have found that they’re trapped, they can’t move…. We're closing down their abilities to have families. They want to move to a larger property, but nobody will buy the one that they’re in. They can't move. [Leasehold] is a nightmare for people.”

A leaseholder is a tenant who has paid to live in a property for a select period of time, and often includes apparent homeowners. Government data suggests long-term leaseholds usually last between 99-125 years.

Once the agreement ends, the property returns to the landlord, who owns the home and the plot of land. Government data suggests there are almost five million leasehold properties in England, which makes up 20 per cent of the current housing stock. 

Under a highly technical amendment, Gardiner wants to ensure that freeholders — who lose the Right to Manage under the enfranchisement process — will not receive any funds from future service charge payments. The amendment would help make sure tenants pay their service charges to the new freeholder. 

Service charges are costs residents pay to the freeholder which fund the upkeep and maintenance of a building.

Under the Right to Manage – a reform brought forward by former prime minister Tony Blair in 2002 – leaseholders can remove the managing agent or freeholder, and gain control of service charges. This can only happen if 50 per cent or more of existing residents vote for this change.  

However, those who do not vote to gain control of the management of their building still have their lease with the old freeholder, and can be exploited by the old freeholder. 

Gardiner is hoping that his amendment will prevent this from happening in the future – and cut off another income stream for freeholders.

The long-serving Labour MP said he was delighted the Labour Party was committed to overhauling the current leasehold system. He said it must be a priority for any future Labour Government to replace it with commonhold. 

“God help us, if we get a Labour government, we must have this as a priority. Because millions, literally millions, of people in leasehold flats are sick to the back teeth of being treated as a money tree for their landlords,” he told PoliticsHome. “We know what our constituents are going through here, it’s purgatory.”

The Labour backbencher said he was confident Keir Starmer's bold position on leasehold would hold. Gardiner said if the Labour leader did renege on this commitment, there would be enough "strong voices” within the parliamentary party to pressure Starmer into implementing further reforms. 

“This is something we have to do, and you will have trouble on your hands if you don't,” Gardiner said, in a message to the Labour leadership. 

The Labour Party has claimed it will end the “feudal” leasehold system. Lisa Nandy, the former Shadow Levelling-up Secretary, said the party would abolish leasehold within the first 100 days of office.

The Guardian reported that a future Labour Government would include a Leasehold Reform Bill within their first King’s Speech if the Conservatives failed to act.

Labour has pledged to adopt the proposals from the Law Commission which would make it easier for leaseholders to buy or extend their lease. Matthew Pennycook, the shadow housing minister, claimed on X, formerly known as Twitter, that it will be the responsibility of a future Labour government to "fundamentally and comprehensively overhaul the current system".

One housing industry source told PoliticsHome they were concerned the Leasehold and Freehold Bill would reduce the quantity of Britain's housing stock by removing the incentive to build new profitable leasehold properties. They claimed this would exacerbate the existing housing crisis and push house prices up even further. Research from Centre for Cities, a think tank, found that Britain has a shortfall of 4.3million houses.

Gardiner said this claim from the housing industry was “nonsense”. He said moving away from a leasehold system towards commonhold would be a “huge boost” for the UK economy. The Labour MP said leasehold was not a “fair” or a “free market” and had “all the hallmarks of an anti-competitive monopoly”.

Gardiner has produced a 40 minute documentary telling the stories of leaseholders trapped in homes they cannot afford to sell. It features residents across England and highlights the imbalance of power which keeps leaseholders "prisoners in their own homes". It will be released by the end of January.  

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