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NEW: Gove sets sights on scrapping leasehold ownership

Housing Secretary Michael Gove has promised to scrap most leaseholds in England this year.

The government will make it much easier for leaseholders in flats to take over their buildings and bring them into common ownership, avoiding high management fees and ground rents.

It is also preparing to scrap rules that prevent owners from buying the freehold to their property if a small part of the building is given over to commercial use, including shops.

Speaking on Sky News, Gove said it planned to introduce legislation in the final parliamentary session, later this calendar year.

He explained: “The fundamental thing is that leasehold is just an unfair form of property ownership. In crude terms if you buy a flat, that should be yours. You shouldn’t be on the hook for charges which managing agents and other people can land you with.”

Feudal system

Gove described leaseholds as “an outdated feudal system” following growing criticism of the rules after the Grenfell cladding scandal.

Many homeowners have faced crippling bills and cannot sell their properties after buying leasehold flats that the freeholders refuse to make safe.

The government tasked the Law Commission to study the sector in 2020, which had, “far too many problems including disproportionate costs to extend leases; poor value property management; and a slow and costly sales process”.

Its subsequent report proposed an overhaul of the right to manage process and suggested that landlords’ legal costs should not be passed to leaseholders, blaming costs as the prime reason why applications fail.

Since then, solicitors have reported a rise in the number of enquiries from leaseholders about taking over their freeholder’s management functions under The Commonhold and Leasehold Reform Act 2002, better known as right to manage or RTM claims.

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