MHCLG quietly release research that casts doubt on major policy agenda
New data from the English Housing Survey reveals the vast majority (93%) of leaseholders in flats are satisfied with their tenure. This is the first time the Ministry of Housing, Communities and Local Government has conducted research on this scale into leaseholder satisfaction, building on its qualitative 2023 leaseholder perspectives report which showed most leaseholders were either positive or neutral towards the tenure.
It raises significant questions over the legacy of Angela Rayner’s policy proposals to overhaul the sector. Under the upcoming Commonhold and Leasehold Reform Bill, the government has announced plans to upend the leasehold system by removing the contractual rental income of professional freeholders, who provide third-party oversight over the maintenance and safety of buildings.
As a result, freeholders risk being plunged into insolvency, leaving buildings in limbo and leaseholders to navigate the disruption and ultimately assume the legal obligations and liabilities of running their buildings, regardless of whether they are happy with their current tenure.
According to the Ministry of Housing’s impact assessment of the legislation, no work has or will be undertaken to quantify the risk of what it terms a redistributive transfer of wealth – despite freeholders being legally and criminally liable for the overall condition of buildings across England and Wales.
Independent economic analysis has shown the plans will wipe out £18.7bn of ground rent investments. The direct benefit of the intervention would largely fall to property investors heavily concentrated in London and the South East, which account for around 55% of the total benefit.
Natalie Chambers, Director of the RFA, commented:
“At long last, the Government has actually asked leaseholders what they think about the leasehold tenure and the answer they have given shows significant and widespread satisfaction.
“We have been urging the Government to consider careful pragmatic reforms which would deliver real benefits for leaseholders without destroying the tenure. The Government now needs to listen to leaseholders and follow its own evidence.
“Abolishing a system which 93% of respondents are satisfied with and forcing people into an unknown and untested commonhold system could be one of the biggest own goals in the history of housing policy.”
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