Housing Minister Matthew Pennycook: Leasehold Abolition Impossible Overnight for Five Million Properties

Housing Minister Matthew Pennycook has declared that the outright and immediate abolition of the leasehold system in England and Wales is "almost certainly impossible", directly refuting claims that the government is backtracking on its election promises. Speaking at the Institute for Government think tank, Mr Pennycook addressed the Labour Party's 2024 general election manifesto commitment to "finally bring the feudal leasehold system to an end".

Mr Pennycook clarified that the manifesto pledge did not signify an immediate end to leasehold. He highlighted the logistical and legal complexities of abolishing circa five million English and Welsh leases overnight, questioning the lawfulness of such a move, its impact on the mortgage market, and the feasibility of instantly establishing millions of commonhold associations.

He criticised the Green Party's promise of "total abolition of leasehold", labelling it a "glib soundbite" and asserting the government's approach as a "serious policy programme". Green MP Carla Denyer later clarified her party's pledge as a phased elimination, not immediate abolition.

Government's Planned Reforms

The government's proposed leasehold bill, currently under parliamentary scrutiny, aims to facilitate the conversion to commonhold – a system where property owners jointly manage and own their buildings without an expiring lease. The bill also seeks to ban the sale of new leasehold flats and cap ground rents, an annual fee paid to freeholders, at £250 per year.

Mr Pennycook explained that these measures are designed to empower leaseholders to take control of their properties and associated costs, enabling them to convert to commonhold "when they judge it is the right time for them". He emphasised that this methodical approach, rather than a "chaotic single moment of destruction", will gradually reduce the prevalence of existing leasehold arrangements. A new commonhold framework is expected to be operational "well before the end of the Parliament", slated for 2029.

While the National Leasehold Campaign acknowledged the impracticality of immediate abolition, co-founder Katie Kendrick called for a "binding timetable for reform" and "concrete progress", citing leaseholders' dwindling patience. Harry Scoffin of Free Leaseholders criticised the speech as a "wasted opportunity for the government to show urgency in freeing millions of leaseholders", suggesting the government views exasperated leaseholders as acting in bad faith.

Cross-party consensus exists on the need for leasehold reform, with previous Conservative governments initiating the process. Liberal Democrat leader Sir Ed Davey has also accused Labour of "dragging its feet".

Renters' Rights Act Impact

Regarding the Renters' Rights Act, which sees key elements, including a ban on no-fault evictions, come into force, Mr Pennycook dismissed concerns about a mass exodus of landlords. He asserted that the legislation's "nominal costs" for landlords were "low" and attributed any landlord departures primarily to tax changes introduced by the Conservatives, rather than increased regulation. He maintained that the act would provide greater "security and stability" for tenants.