New leasehold flats in England and Wales are set to be banned under the latest government plans to reform home ownership. 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 says it wants to move to a system of home ownership that is more in line with the rest of the world, known as commonhold, where homeowners own a share of and have control over the buildings they live in.
The government has yet to set out specific plans for the conversion of current leasehold properties to commonhold, but says it is “determined” to make this easier. A white paper published on Monday stated the sale of new leasehold flats would be banned and commonhold “reinvigorated” with a new legal framework.
A draft Leasehold and Commonhold Reform Bill, including the details of how the new system would work, will be published later this year, the government has said. The new legislation would apply in England and Wales, where there are an estimated five million leasehold properties, 70% of which are flats.
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