Soaring ground rents, service charges and other leasehold problems have created a “crisis” in the flats market that is making it impossible for many owners to sell, campaigners have told MPs.

Speaking in front of the Housing Committee yesterday, Free Leaseholders founder Harry Scoffin called on the government to make good on its pledge to end the “feudal” leasehold system.

He described leasehold as a “toxic tenure”, which is creating a two-tier market with flats increasingly difficult to sell.

High service charges have left many properties unmortgageable, he warned,  criticising the government’s timetable for reducing ground rents to a peppercorn

Scoffin said: “If you are protecting ground rent until 2068 you are basically sending a big signal to people that have bought up the freeholds to other people’s homes that this system is okay.

“And actually, what I think was so worried about is there’s a crisis in the flats market.

“At the moment people cannot sell, they cannot move on. 

“There’s been a myriad of articles in the press where you’ve now got the biggest gap between house and flat prices in 30 years, the first rung, and actually, often it’s the last rung for elderly, downsizers is toxic – no one wants to touch it. 

“The government is talking about 1.5 million new homes. The fact is, most of those homes are going to be flats, because of the demand for housing.

“If you have got a toxic tenure, then you have got to get rid of it. 

“That’s what we promised in the manifesto.”

In a separate session, Labour housing secretary Angela Rayner and former Conservative housing secretary Michael Gove called on ministers to face down the freeholder lobby and not be deterred by fears they will seek a Judicial Review to protect their rights.