Leasehold ban not included in housing reform law

The UK government’s proposed ban on the sale of new leasehold houses has not been included in its bill to reform housing rights.

Ministers had said this week’s new bill would ban the sale of new leasehold houses in England and Wales.

Housing Secretary Michael Gove said the law would mean leaseholders can “take back control of their property”.

But the government says the ban will be added to the bill at a later stage in its passage through Parliament.

The BBC has been told the government had planned to add the ban as an amendment to the bill for some time.

But Labour says the bill has been watered down, and does not match what was promised by the government.

A leasehold is a type of property contract that allows the owner to live in a property – usually a flat – for a fixed term.

Under this system, leaseholders often have to pay ground rent and expensive maintenance charges to freeholders, who own buildings and the land on which they are built.

Mr Gove has branded leaseholds “unfair and outdated”, and previously said he wanted to scrap the system entirely.

The Leasehold and Freehold Reform Bill introduced on Monday did not go that far.

Instead, the bill included measures to increase the standard lease extension from 90 years to 990, and make it easier and cheaper for leaseholders to take over the management of their properties.

The government’s plans to reform the leasehold system have been broadly welcomed by campaigners.

Mr Gove has said he was confident the bill will become law before the next general election, which is expected in 2024.

But some are disappointed a ban on the sale of new leaseholds does not include flats. There are an estimated five million leasehold homes in England – 70% of which are flats.

“Not only does this long overdue piece of legislation not ensure that new flats will be sold as freehold, contrary to what ministers have claimed it doesn’t even do what it says on the tin and ban the sale of new leasehold houses,” Labour’s shadow housing minister Matthew Pennycook said.

“A Labour government will make commonhold the default tenure for all new properties as part of our commitment to fundamentally and comprehensively reform the leasehold system by enacting the Law Commission’s recommendations on enfranchisement, commonhold and right to manage in full”.

The Times newspaper reported that the Department for Levelling Up, Housing and Communities “did not have time” to include the leasehold ban before the bill was introduced this week.

The ban was included in the notes provided by the government when the bill was announced in the King’s Speech earlier this month.

But the government says it will “bring forward amendments as the bill progresses through Parliament, and that includes the ban on leasehold houses”.

There have been reports some Conservative MPs could seek to amend the bill to abolish leaseholds for new flats as well as houses, with Labour saying it would back such moves.

A Levelling Up Department spokesperson said: “Liberating leaseholders forms a vital part of the government’s long-term plan for housing.

“That’s why we are bringing forward the biggest changes to the system for a generation by giving leaseholders significant new rights, powers and protections through the Leasehold and Freehold Reform Bill.”