The Intermediary – November 2025 - Flipbook - Page 71
BUY-TO-LET
Opinion
The end of the
feudal flat?
I
n March, the Government
said it would ban the sale of
new leasehold homes by the
end of this Parliament, in
what ministers described as
the end for a centuries-old
‘feudal system’.
Under the current leasehold system,
third-party landlords, known as
freeholders, own the building and a
leaseholder buys the right to occupy a
flat within it for a fixed time period.
The Government wants to move
to a system of homeownership that
is more in line with the rest of the
world, known as commonhold.
Under commonhold, people can
own their flat outright while the
shared parts of the building – such as
entryways, roofs and amenities like
gyms or gardens – are owned by a
commonhold association, in effect a
special type of corporation.
The system is modelled on
similar structures in continental
Europe and North America, such as
condominiums. Most of the rules
for how commonhold associations
are run will be standardised by the
Government, which it sees as an
improvement over leases where terms
can vary widely. Owners will each
have a vote and can set ‘local rules’ for
their building, such as limits on shortterm holiday lets.
A white-paper published in March
stated the sale of new leasehold flats
would be banned and commonhold
“reinvigorated” with a new legal
framework.
themselves kickbacks on contracts.
The process for leaseholders to
challenge their freeholder, or gain
control of the building, is complex,
expensive and slow.
Indeed, when Landbay asked
landlords what they disliked the most
about leasehold tenure, only one in
nine said they had no complaints.
On the other hand, more than half
of the landlords that we polled told us
they disliked service charges the most,
while one in seven cited neglect and
poor infrastructure.
A similar number picked out the
difficulty of remortgaging. One in 14
said the cost of ground rent.
This highlights the deep concerns
among buy-to-let borrowers over the
leasehold system. It also suggests that
the Government is right to be pushing
for a transition to commonhold: it’s
a step in the right direction towards
modernising property ownership in
the UK. The Government’s ambition
to abolish leasehold is commendable.
This is not something the country
is rushing into without some
Commendable idea
This would be a popular move with
landlords and buy-to-let (BTL)
investors. The centuries-old leasehold
system is rife with problems:
uncooperative freeholders have held
up critical fire safety measures in some
buildings, and there are many cases
of freeholders seing up excessive
‘ground rent’ payments, overcharging
for running buildings and even paying
A move to modernise property ownership
ROB STANTON
is sales and distribution
director at Landbay
forethought. Those of us with long
memories will remember that
the Labour Party started pushing
commonhold ownership in 1995.
This takes us to the heart of the
maer. We do have commonhold in
the UK. It’s just not a big deal: fewer
than 200 properties currently use
commonhold – hence the talk about
“reinvigorating” it.
Growing cynicism
While the intent to reform a system is
welcome, when we asked the opinions
of landlords owning approximately
3,000 properties throughout England
and Wales, only a third said that they
thought the move was achievable.
Landlords in Wales were the most
pessimistic, with three-quarters
saying they thought the reforms
wouldn’t happen – although landlords
in the north of England were less
cynical, with only 55% of those
surveyed saying they thought the goal
was undeliverable.
Landlords operating predominantly
as individuals were less likely to
say that the Government’s goal was
unachievable – still more than half
of them, though – compared to those
making use of limited company
structures at almost two-thirds.
This highlights the need for a
clear, practical roadmap for progress.
Without robust policy execution,
the transition risks stalling, leaving
landlords and leaseholders in limbo.
And with the political demise of
Angela Rayner, the abolition of
leasehold tenure looks, perhaps, even
less certain. ●
November 2025 | The Intermediary
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