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The BBC's Karen Bowerman
"Ministers are confident Commonhold will take off"
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Monday, 21 August, 2000, 17:45 GMT 18:45 UK
Millions of homeowners to win new rights
Nick Raynsford, Housing Minister
Nick Raynsford: "In an ideal world we would never have had leasehold."
Long-awaited plans to give two million leaseholders more rights to manage their homes, or buy them outright, have been unveiled by ministers.

The government is seeking responses to a draft bill which also proposes a new way of owning property - commonhold - as an alternative to freehold ownership, where possession is absolute, and leasehold, where ownership is temporary.

The draft bill represents the fourth initiative in a decade aimed at reforming the leasehold system, almost unique to England and Wales, which has been widely condemned for the powers it places in landlords' hands.

Leaseholders, typically flat owners who have purchased their property on 125 year leases, have suffered "landlord abuse" such as high service charges imposed without consultation.

Leasehold unwanted

"In an ideal world we would never have had leasehold at all," Nick Raynsford, Housing Minister, said.

The bill would allow leaseholders to buy the freehold to their property even without the agreement of neighbours. Existing laws allow freeholds to be purchased only with the backing of two thirds of leaseholders in the block.

Leaseholders would not have to live in their homes for a year to be allowed to buy their freehold, as currently applies.

They would also be able to take over the management of their block without having to prove mismanagement by their landlords, and have more rights to challenge service bills.

Obligatory consultation

"All leaseholders have legitimate rights to be properly consulted about works they'll be required to pay for, to have an opportunity to challenge works or costs they consider unreasonable," Mr Raynsford said.

But he ruled out the imminent abolition of leasehold in favour of commonhold, a category designed to combine the advantages of freehold ownership with the joint management arrangements allowed leaseholders.

"We have around two million leaseholders of flats and houses and we cannot wish that fact away," Mr Raynsford said.

"Nor would it be right to compel leaseholders to switch to a new and untried form of tenure, however promising."

Tried abroad

The commonhold system, found in the US, Europe and Australia, would see all freeholders in a development run their property jointly, forming a company to oversee management.

"Commonhold has been a long time coming, but we are determined to give people a viable alternative to leasehold," David Lock, Minister in the Lord Chancellor's Department, said.

"In a commonhold there will be no landlord... neither will the owner's interest in the property run out over time as it does in leasehold."

The news was welcomed by US construction company Wilcon Homes, which is planning to launch commonhold housing estates in the UK later this year.

Paving the way

"Wilcon has been looking at... the way it builds sustainable communities for some time," said John Wier, the firm's design director. "Its introduction in the UK would pave the way for a number of development we are considering."

Archie Norman, shadow environment secretary
Archie Norman: Why has the bill taken so long?

But shadow environment secretary Archie Norman condemned the government for failing to act earlier.

"Despite the fact that Conservatives tabled a draft bill in 1996, all Labour can muster after three years is yet another draft bill which will not make headway during this parliament," Mr Norman said.

"This is just another eye-catching initiative released in the quiet summer months to give an illusory impression of activity."

Consultation on leasehold reforms was also carried out by the Conservative administration in 1990.

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See also:

17 Nov 99 | UK Politics
Queen's Speech in full
01 Dec 98 | UK Politics
Leaseholders demand more control
10 Jun 98 | UK Politics
Pledge on overhaul of leaseholds
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