Martin Lewis rages at politicians to 'get a handle' on issue leaving homeowners poorer

The much-delayed shake-up of the archaic leasehold system, notorious for hitting homeowners with extortionate ground rents and exorbitant admin fees, has been delayed yet again. Homeowners across the nation had anticipated urgent reforms to these oppressive fees to take effect following a hastily passed bill during the last days of the Tory government.

Nevertheless, Labour's new Housing Minister, Matthew Pennycook, stood in the House of Commons this Wednesday to declare that most provisions of The Leasehold and Freehold Reform Act 2024 are now postponed. Money Saving Expert founder and activist Martin Lewis slammed the decision to put off crucial changes.

Expressing his dissatisfaction, 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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At heart of the matter for countless homeowners is the crippling expense they incur after buying into a leasehold property, typically binding them to ownership terms of 99 years. A vast number of them find themselves at the mercy of leaseholders who are charging substantial sums for annual ground rents, in addition to overly pricey "service charges."

Labour has pledged to tackle the leasehold system issue "as quickly as possible" aiming to dismantle a system that dates back to the 13th century when feudal lords collected ground rents from peasant farmers. Despite the urgency, Labour's Housing Minister highlighted significant flaws in the legislation hurried through during the "wash up" period before the July general election, reports the Manchester Evening News.

Speaking to the Commons, Pennycook 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, he confirmed that some simpler aspects of the Leasehold and Freehold Reform Act will be put into effect soon, with a timetable laid out for when homeowners can expect changes.

From January, the government is set to scrap the "two year rule" that prevents leaseholders from extending their lease or purchasing the freehold within the first two years of their tenure. Subsequently, by springtime, certain leaseholders, especially those in mixed-use buildings, will be empowered to take control of their freeholds and do away with unnecessary charges.

Meanwhile, Labour has pledged to detail its plans to phase out new leasehold properties by the latter half of next year, although it acknowledges that a public consultation on various proposals must precede any actions.

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