Leasehold homes are a “source of problems and financial stress” for Londoners who “cannot and should not wait any longer” for radical reforms to the system, ministers have been told.
By Kumail Jaffer, Local Democracy Reporter
Leasehold homes are a “source of problems and financial stress” for Londoners who “cannot and should not wait any longer” for radical reforms to the system, ministers have been told.
Zoe Garbett, the chair of the London Assembly Housing Committee, said the capital was “uniquely exposed” to leasehold issues, which include high service charges and poor quality buildings.
Over a third – 36 per cent – of London’s homes are leasehold, meaning that buyers purchase the right to live in the property for a set number of years, compared to 16 per cent in the rest of England.
This means the freeholder – who owns the property outright and the land its built on, and is responsible for upkeep and repairs – can impose service charge bills on any leaseholders.
Ground rent payments also apply to older flats, while leaseholders are also responsible for extending the length of the lease.
In July ministers, who have pledged an end to the “feudal” system, announced a consultation on reforms which would increase transparency around service charges. The typical service charge for a flat in England & Wales rose 11 per cent during 2024 to reach an average of £2,300 per year, or £192 per month. This closes on Friday.
In response, Ms Garbett wrote: “Issues with leasehold as a tenure and service charges are longstanding.
“We call on the Government to prioritise implementing these measures as a matter of urgency as leaseholders cannot and should not wait any longer for greater transparency in their service charges.”
She also said that leaseholders should be enabled to “withhold unjustified service charges” and challenge such charges more easily,
Other recommendations included compelling developers to ensure they use quality components during construction to avoid leaseholders being hit with increased service charge further down the line if repairs need to be carried out.
Ms Garbett also said the Housing Committee was also keen to see the measures in the Leasehold and Freehold Reform Act 2024 apply to social tenants.
In July the committee, then chaired by Assembly Member Sem Moema, recommended that potential leasehold purchases be given an estimate of how much they will be paying service charges for the first 10 years of ownership.
Ms Moema said at the time: “London has more leaseholders than anywhere else in the country – over a third of all homes in our city are leasehold. Behind the doors of these homes are often stories of residents paying thousands of pounds for opaque service charges, battling for basic transparency, and facing mounting costs through no fault of their own.”
Before coming into office, the Labour Party promised to bring an end to leasehold by the end of this parliament – expected to be 2029.
But campaigners have been concerned about the slow progress made so far, with ministers putting the speed down to the need for extensive secondary legislation and public consultations.
Harry Scoffin, housing campaigner and founder of Free Leaseholders, told the Local Democracy Reporting Service (LDRS): “We back this intervention by Zoë Garbett and the London Assembly Housing Committee. Leasehold is a cost of living emergency. The government’s consultation policies are little more than sticking plasters on an exploitative system that has made London an international pariah.
“There is a crisis in the flats market and we’re not seeing a crisis response from the government. Leaseholders are trapped and being looted.”
The Ministry of Housing, Communities and Local Government told the LDRS: “Far too many leaseholders across the country are being asked to pay unreasonable and extortionate charges.
“We will fix this and have published a consultation on detailed plans to drive up transparency of service charges.
“We welcome the London Housing Assembly’s views on the proposals and will provide a government response to the consultation in due course.”
