Housing Minister Matthew Pennycook Details Phased Abolition of England and Wales Leasehold System

Housing Minister Matthew Pennycook has stated that an immediate and outright abolition of the leasehold system across England and Wales is “almost certainly impossible”. This clarification comes despite Labour’s 2024 general election manifesto pledge to “finally bring the feudal leasehold system to an end”.

Addressing the Institute for Government, Mr. Pennycook explained that ending leasehold involves “dismantling” the system before the next election by facilitating leaseholders’ control over their buildings. He refuted claims that the government is delaying reform, arguing that anyone with “even the most rudimentary knowledge of leasehold” would understand the impracticality of instantly abolishing five million leases.

Mr. Pennycook questioned the legality of such an abrupt change, its impact on the mortgage market, and the feasibility of immediately establishing millions of commonhold associations. He directly criticised the Green Party's promise of “total abolition of leasehold”, dismissing it as a “glib soundbite”. Green Party leader Zack Polanski countered, accusing Labour of prioritising property developers over freeing leaseholders from financial burdens.

The current leasehold system requires property occupants to hold a lease for a limited period from a freeholder, often leading to spiralling, uncontrolled service charges. The government’s draft leasehold bill, under parliamentary scrutiny, aims to simplify the conversion to commonhold, where residents jointly own and manage their buildings without an expiring lease.

The bill also proposes banning new leasehold flat sales and capping annual ground rents at GBP#250. Mr. Pennycook asserted these measures would allow leaseholders to take control and convert to commonhold “when they judge it is the right time”. He anticipates a new commonhold framework will be operational “well before the end of the Parliament” in 2029.

However, Harry Scoffin, founder of Free Leaseholders, described Mr. Pennycook’s speech as a “wasted opportunity” to demonstrate urgency in assisting millions of leaseholders.

Separately, the Minister addressed concerns about the Renters’ Rights Act, effective this Friday with a ban on no-fault evictions. He dismissed claims of an “exodus” of landlords, attributing any departures to previous Conservative tax changes rather than increased regulation. Mr. Pennycook maintained that the Act would enhance “security and stability” for tenants.