27 July 2023
Government has published its report on research it commissioned in order to gain a better understanding of how people felt about living in flats – and taking on more management responsibilities in particular – and to gather views about people’s appetite for running a block themselves as commonholders. The associated aim was to hear directly from people who were not active campaigners and who were living in or thinking about purchasing a flat in a leasehold block.
The report is based on a small number of focus groups, so care must be taken about drawing broad conclusions. However, the report does provide some insights which will help shape policy development in the future, these include:
- Leaseholders and prospective buyer respondents were generally aware of the terms, ‘leasehold’ or ‘freehold’, and felt they understood what they entailed. However, there were some significant misconceptions. For example:
- One respondent was concerned that a freeholder would be able to make them leave their flat, in the absence of any legal grounds and at the freeholder’s whim.
- Another respondent thought that all leaseholders in a building would automatically be subject to the same terms (in reality, lease terms can vary flat by flat); and
- Another thought that lease restrictions could apply to local authority-owned properties only, not privately-owned flats.
- Respondents also held misconceptions about freehold flat ownership. For example:
- In terms of the share of freehold option, some respondents did not realise that they would continue to be leaseholders to their own flats and bound by the terms of the lease; and
- Respondents saw freehold ownership as a ‘permanent’ status, suggesting that they did not always recognise they would still need to extend short leases under share of freehold, as with leasehold.
- Respondents had mixed feelings about leasehold, with some being very satisfied with the arrangement, others “fairly neutral”, and a smaller number expressing negative opinions, such as:
- limited control,
- relatively high charges,
- delays in organising repairs, and
- a lack of communication from freeholders and management companies.
- Respondents generally felt that freehold represented ‘independence’ compared to the restrictions of leasehold.
- Most participants had no awareness of Right to Manage. Awareness of commonhold was even lower, with just a few participants across all groups aware of the term.
- When participants were provided with more information about commonhold ownership, they generally viewed it positively in theory but identified some perceived practical drawbacks. Positive views centred around ‘control’ and a sense that this was a more ‘democratic’ option, offering more freedom.
- Concerns around commonhold included:
- having to work closely with neighbours and potential disagreements,
- how commonhold would work in practice for larger blocks,
- how much conversion would cost,
- whether conversion would be too time-consuming and complex, and
- whether commonhold status would affect the flat resale value and ease of selling.
- Most participants were not themselves interested in playing an active part in the management of their building due to:
- issues working with neighbours,
- a lack of time, and
- reluctance to take on additional responsibilities beyond those necessary as a homeowner.
Having the right skillset within the group of flat owners was the key factor in determining interest in personally taking on management responsibility.
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