Why replacing leasehold may be easier said than done

By Tarah Welsh Housing reporter When Sally, 74, bought her two-bedroom flat in 2021, she hoped it would be the home she could peacefully retire in. But she says buying a leasehold home has led to terrible stress. There are around five million leaseholders in England and Wales. Sally is one of over 1,000 people the BBC spoke to in an attempt to understand the pressures on leaseholders. Most said that fast rising service changes and ground rent costs make them feel they have little control over their own homes. When she moved into her London flat, Sally says service charges were around £2,600 a year. One year, they totalled more than £5,400. "That was a really bad year. Me and my fellow owners were very stressed and anxious. There were tears and I remember us talking about how we were going to pay." Now, the government wants to fundamentally change how flats are owned. Under its Commonhold and Leasehold Reform Bill, new leasehold flats will be banned and replaced with commonhold, a system where residents collectively own and manage their buildings. "The people who should own buildings, and who should exercise control over their management, shared facilities and related costs are not third-party landlords but the people who live in flats within them and who have a direct stake in their upkeep," said Housing Minister Matthew Pennycook, in a speech in April. Image source, Anadolu via Getty Images Image caption, Matthew Pennycook: "The people who should own buildings, and who should exercise control over their management...are not third-party landlords but the people who live in flats" Freeholders argue that the English Housing Survey suggests 93% of leaseholders living in flats are satisfied with being an owner occupier (the survey doesn't ask specifically about being a leaseholder). Despite this, the government is introducing reforms widely seen as the biggest shake-up of home ownership in decades. But as commonhold moves closer to becoming the default for new-build flats, questions remain over whether it can avoid creating a new set of challenges for homeowners. And can a system that has existed for centuries really be replaced - or will a whole new set of problems emerge? "Feudal" system To understand the complexities of today's leasehold system, described by many, including Housing Minister Matthew Pennycook, as "feudal", we have to go back almost 1,000 years. In the Middle Ages, William the Conqueror took control of England's land and granted parts of it to loyal nobles, who leased it to others for a fixed term. While today's leasehold system is very different, critics argue the basic principle remains the same - homeowners pay for the right to occupy land they do not fully own. For almost 60 years, successive governments have tried to reform it, with one alternative repeatedly put forward: commonhold. It was first introduced into law under Tony Blair's government in 2004, but developers have rarely chosen it. According to the Land Registry, th