Should all long leaseholds convert to freehold?

What about England and Wales? Rights have been given to flat owners including to extend their lease and collectively enfranchise. Exercising these rights involves a substantial payment to the freeholder under a complicated and expensive process. New flats are sold on ‘long’ leases of usually 125 years but sometimes shorter. Ground rent is payable. As the lease shortens so does its value. At some stage the owner must extend their lease. Many flat owners do not understand why it is necessary to pay for their flat again when in their minds it has already been bought at a full price.

The concept of commonhold as a form of shared ownership of a building was introduced by the Commonhold and Leasehold Reform Act 2002. However, the use of commonhold is only voluntary. More than ten years on, the number of commonhold blocks can probably be counted on the fingers of one hand. This is unsurprising since any developer electing for commonhold for their residential development would be like a turkey voting for an early Christmas. Is it time for England and Wales to introduce some form of compulsion?

It would be extremely difficult to force conversion to commonhold of existing buildings. It could, for example, be compulsory for all new build blocks to be commonhold. Developers would factor into the price the loss of ground rent and reversionary value. There is no reason why someone who buys a flat should have a lower grade of title than a house owner.

Developers would object but the biggest problem is lack of political will. Leasehold reform is not a vote winner. Even desirable minor technical changes are difficult to get though. However, there are more than 4.1 million flat owners with many new flats being built and this is a significant minority group. Can they be mobilised to put pressure on government? As in Scotland this might be the start of a process which eventually leads to a compulsory change of ownership structure even for existing flats.

It would be a long time before any major impact and there would be a twin track system running with the old system for the foreseeable future - but better to start somewhere.