Waltham Forest Council rejects MP’s leasehold ban call

Waltham Forest Council has rejected a call by Walthamstow MP Stella Creasy to ban the sale of leasehold homes in new developments.

On Friday (February 9) the MP sent a letter to her local council asking them to only allow homes to be sold on a freehold or commonhold basis, saying that leasehold homes mean homeowners are “at the whim” of freeholders.

However, Waltham Forest’s deputy leader Ahsan Khan, who oversees the council’s housing and regeneration, warned that a local ban on leasehold properties could “severely affect local housing delivery”.

In his response, Cllr Khan said Waltham Forest supports the Leasehold and Freehold Reform Bill, currently going through Parliament, which would make it “cheaper and easier” for leaseholders to extend their lease.

The bill also proposes to increase the standard lease extension to 990 years, with ground rent reduced to a nominal amount.

However, it does not include a ban on new leasehold flats.

He added: “We already use all the powers available to us to improve the rights of leaseholders and renters. Strengthening these powers would be a welcome change.

“As it stands, mortgage providers are reluctant to agree arrangements for commonhold properties and so they account for less than 0.01 per cent of all properties in England and Wales.

“While take up is so low, attempting to introduce this policy locally could severely affect local housing delivery and prevent the creation of much-needed new homes.”

Cllr Khan said that adopting commonhold “is not a change that can be led by a local authority alone”.

In her letter Stella had told  council leader Grace Williams: “With so many continuing to seek to develop properties in our community, and many more planning applications to do so likely to come to the local authority for consideration this could be a transformative act for the rights and costs of home ownership in Walthamstow.”

Waltham Forest Council could change its local plan – a document that guides development in the borough – to make commonhold the “preferred approach”, she suggested.

Stella’s letter appears to be a local example of Labour’s campaign to change the law on leasehold properties.

Speaking in December, party deputy Angela Rayner said Labour would back a move to make commonhold “the default tenure for all new properties” if it wins power.

Under the current system, leaseholders often have to pay the freeholder of their building ground rent and expensive maintenance charges.

Leaseholds are the right to use a property for a fixed term, but not the land it is built on.

Commonhold ownership, which has existed in the UK since 2002, involves occupants jointly owning and managing their building without an expiring lease on their own property.

UK Finance, which represents 300 firms offering banking and credit services, has suggested that commonhold properties could be more popular if they were encouraged through financial incentives and a “significant publicity campaign”.

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Josh Mellor

Local Democracy Reporter