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What Are Labour's Plans For Leasehold?


5 min read

Campaigners are looking more towards Labour to abolish Leasehold as the party edges closer to power – but many are concerned reforming the sector will not be a top priority for the party.

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.

Labour is ahead in every major opinion poll and has enjoyed a healthy 20-point lead over the Conservative Party since Liz Truss served as prime minister for 49 days in 2022, according to data from YouGov.

Yet Keir Starmer’s party faces a number of key challenges if it wins power at the next election. It will inherit a low-growth economy with high levels of public sector debt.

Sebastian O’Kelly, CEO at Leasehold Knowledge Partnership, told PoliticsHome Labour was “promising a lot”, but he believed it was unlikely to be a priority for an incoming Labour Government.

“The opposition is promising a lot but it's unlikely to be a priority of the Labour government. Matthew Pennycook is doing the politically prudent thing which is to be pretty imprecise,” he said.

O’Kelly implored the party, which has made housebuilding a key part of its electoral pitch to voters, to look at improving housing ownership as well as boosting supply.

“Tenure is something they've got to get their heads around. There’s no point in increasing housing supply if you’re going to continue to produce legal rubbish like leasehold with aggressive terms, it is disempowering people.”

Nonetheless he said he had every confidence that a future Labour Government would introduce Commonhold “properly”.

Labour is committed to overhauling the leasehold structure, but the party is wary that there is no quick fix to change a centuries-old system. 

The party is looking to enact the Law Commission's remaining recommendations when there is time. There is also pressure for a future Labour government to go beyond this, such as making commonhold the default tenure for new houses. 

A point which has disappointed some campaigners was Labour’s decision to row back on introducing legislation to abolish the leasehold system in its first 100 days of Government.

Lisa Nandy, during her spell as shadow levelling-up secretary, made this commitment on Sky News in May 2023.

PoliticsHome reported in September that Labour were starting to reconsider this pledge, with the details confirmed in April by Politico.

Harry Scoffin, founder of anti-leasehold campaign group Free Leaseholders, told PoliticsHome this decision from the leadership was a “massive blow” to leaseholders.  

“Leaseholders feel they are financial prisoners in their own homes so it is understandable that they consider themselves to be single issue voters and it is right that Labour is speaking to that.

“However, there is no getting away from it, the dropping of the ‘first 100 days’ pledge a few weeks ago was a massive blow to leaseholders because it signaled that Labour has deprioritised them.”

Since then senior Labour politicians have spoken publicly about overhauling the sector. Angela Rayner, the Shadow Levelling-up Secretary, mentioned reforming leasehold in PMQs on Wednesday as she stepped in for Keir Starmer. Rachel Reeves, the Shadow Chancellor, also tweeted about how it was a priority for an incoming administration.

Barry Gardiner, Labour MP for Brent North, who has campaigned to abolish leasehold for 20 years, told PoliticsHome he understood people were worried that a Bill may not be able to pass through both houses and gain Royal Assent in 100 days of a future Labour Government. But he stressed that the pont was “not when you bring the bill" to Parliament but when "you get the policy as law.”

"When politicians stand up on their hind legs and say ‘we're gonna do this in the first 100 days’, it's a soundbite, it's a declaration of intent. And that's great, that's welcome. But the point is, ‘are you really going to do it?’ Yes we are.”

He told PoliticsHome abolishing leasehold was a Labour policy and would be completed in the lifetime of the first term of a new Labour government. 

Labour was the first party to bring in commonhold reform in 2002, and is viewed to be less susceptible to pressure from pension funds who believe wholesale leasehold reform would hurt investments. Investors told SkyNews they could lose 30billion under the Government’s current leasehold reforms. The Sunday Times reported that the Government was forced to dilute its plans to cap ground rents on leasehold properties after intense lobbying from the sector. 

Catherine Williams, co-founder of the National Leasehold Campaign, said she found it difficult to believe a future Labour Government could do anything in 100 days.

She said she was happy to see more media coverage but wanted to see more from Keir Starmer.

“We want Keir Starmer to stand up, especially in the general election when they publish their manifesto, we want to see abolition of leasehold and the firm introduction of commonhold”.

The Government is currently pushing through its own Leasehold and Freehold Reform Bill through Parliament, which many campaigners believe has good elements to it.

Michael Gove, the Levelling-up Secretary, has previously described leasehold as a "feudal" system.

But campaigners and activists believe if the system is to be scrapped, it will be up to the next Government to do it. With Labour expected to win by a landslide, with the potential of winning more than 400 seats, that responsibility is likely to rest with Keir Starmer's party.

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