Martin Lewis slams 'yet another' delay ending system leaving homeowners poorer

The long-awaited reforms to the "feudal" leasehold system, which allows homeowners to be charged eye-watering ground rents and ridiculous admin fees, appear to have been kicked into the long grass once again.

Millions of homeowners had expected action on these unfair charges to take effect this year, after a bill was rushed through parliament in the final days of the Conservative's rule. But the new Housing Minister, Labour's Matthew Pennycook, stood up in the House of Commons on Wednesday and announced that most of The Leasehold and Freehold Reform Act 2024 would now be delayed.

Founder of Money Saving Expert and campaigner Martin Lewis slammed the decision to delay the much-needed reform. Mr Lewis said: "I can almost hear the collective groan of leaseholders at yet another delay in sorting the leasehold mess out. Someone really needs to get a handle on this..."

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The crux of the issue for millions of homeowners is the enormous costs they are facing after purchasing a leasehold property, where they typically own the home for a period of 99 years. Many are seeing their leaseholders demand hundreds in annual ground rents, as well as paying through the nose for "service charges."

Labour has committed to addressing this issue "as quickly as possible" with the intention of scrapping the leasehold system, which was created in the 13th century so feudal lords could collect ground rents from their peasant farmers. However, as the urgent legislation was rushed into law through the "wash up" period before the July general election, Pennycook told the Commons there were serious flaws in the details.

Labour's Housing Minister said: "These serious flaws include a loophole which means the Act goes far beyond the intended reforms to valuation and that undermines the integrity of the amended scheme. In addition we must correct an omission that would deny tens of thousands of shared ownership leaseholders the right to extend their lease with their direct landlord given that the providers in question do not have sufficiently long leases to grant 990-year extensions."

Matthew Pennycook MP added: "This government will not make the same mistakes as the last when it comes to reforming what is, without question, an incredibly complicated area of property law. While we intend to continue to work at pace, we will take the time necessary to ensure the reforms we pass are fit for purpose."

However, some of the more straightforward elements of the Leasehold and Freehold Reform Act will be implemented, with the minister finally laying out a timetable for when homeowners can expect some relief.

In January, the government will end the "two year rule" which stops leaseholders from extending their lease or buying their freehold in the first 24 months of their agreement. Then in spring, some leaseholders will be supported to take over the management of their freehold and eliminate needless costs, if they live in a mixed-use development.

Labour has committed to outlining exactly how it will eliminate new leasehold properties by the second half of next year, but has said a public consultation on various measures will have to be carried out first.

You can read the Housing Minister's full statement here.