Embarrassment for ministers as new legislation to ban ‘feudal’ leasehold house sales is introduced … without text that would ban leaseholds

Ministers have been left red-faced today after legislation to outlaw the sale of houses under leasehold agreements was introduced to Parliament without the text that would outlaw leaseholds.

The Leasehold and Freehold Reform Bill was hailed by Housing Secretary Michael Gove as a ‘landmark moment for millions’.

It is designed to bring in changes meaning that, other than in exceptional circumstances, new houses in England and Wales will be freehold from the outset.

Except the legal wording that would bring about the change was  left out of the 132-page document presented to MPs this week.

Lawyers had not finished drafting it because No10 only put it into November 7’s King’s Speech – which announces forthcoming legislation  – at the 11th hour, the Times reported.

Shadow housing minister Matthew Pennycook said: ‘Not only does the government’s Leasehold and Freehold Reform Bill 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! What a joke.’

The Leasehold and Freehold Reform Bill was hailed by Housing Secretary Michael Gove as a ‘landmark moment for millions’.

Except the legal wording that would bring about the change was left out of the 132-page document presented to MPs this week.

Ministers now hope to amend their own bill to insert the missing text. But there is some disagreement over whether that is allowed under Parliamentary rules. 

If it is not, ministers could be forced to withdraw it and start again, potentially delaying it by months.

Introducing the legislation on Tuesday, Mr Gove said: ‘People work hard to own a home.

‘But for far too long too many have been denied the full benefits of ownership through the unfair and outdated leasehold system.

‘That’s why liberating leaseholders forms a vital part of the Government’s Long-Term Plan for Housing.

‘So today marks a landmark moment for millions of leaseholders across the country, as we unveil laws to deliver significant new rights and protections, slash unfair costs and crack down on exploitation.’

However campaigners have expressed concern that the sale and purchase of leasehold flats will still not be banned.

The Bill aims to improve homeownership for millions of leaseholders in England and Wales, by making it cheaper and easier for more leaseholders to extend their lease, buy their freehold and take over management of their building.

The standard lease extension term will be increased from 90 years to 990 years for both houses and flats, with ground rent reduced to £0.

The legislation follows the Leasehold Reform (Ground Rents) Act 2022, which put an end to ground rents for new, qualifying long residential leasehold properties in England and Wales. 

A spokesman for the Department for Levelling Up, Housing and Communities said: ‘As we laid out on Monday, we will bring forward amendments as the bill progresses through parliament and that includes the ban on leasehold houses.’

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