Bill to ban leaseholds fails to ban leaseholds after government error

The housing department has been left in an embarrassing position after needing to correct legislation rushed into King’s Speech earlier this month.

It had been presented by ministers as a once-in-a-generation reform to England’s housing market, a law that will end the “feudal” system of selling new leasehold houses.

However, The Times highlights that there is a major problem: the government’s 132-page bill, published this week, does no such thing.

In an embarrassing admission the Department for Levelling Up, Housing and Communities confirmed that it did not have time to draft a centrepiece reform that would have banned the sale of new leasehold houses before the legislation is presented to parliament.

Now ministers face the prospect of trying to introduce the measure as an amendment to their own bill or pulling the legislation entirely and reintroducing a new version to rectify the error.

The problems arose after the Leasehold and Freehold Reform Bill was included as one of the key measures in the King’s Speech this month.

At the time ministers said that the bill would, for the first time, ban developers from selling new leasehold houses apart from in exceptional circumstances as the first step towards phasing out leasehold altogether.

The Times reports that behind the scenes, officials said the bill had to be drafted in a “huge hurry” after No 10 delayed a decision on whether to include the bill in the King’s Speech at all and only gave it the green light at the 11th hour.

As a consequence, government lawyers, who turn policy into legislative text, did not have the section of the bill banning new leaseholds ready in time for the first reading of the bill, which took place this week.

The Times reported that sources informed them that they had hoped to have the measures ready to be tabled as an amendment to the legislation when it reaches committee stage early next year. Some have questioned whether parliamentary procedures would allow this because the measure is not mentioned in the long title of the bill, which describes what it does.

Matthew Pennycook, the shadow housing minister, who spotted the omission, commneted: “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.

“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”.

Sebastian O’Kelly of the Leasehold Knowledge Partnership, a charity, said it was “very strange” that the promised ban had not materialised in legislation.

“This is something that the government has been promising since 2017 but they now seem to have forgotten it and missed out one of the core provisions in the bill,” he said. “I am sure they can reintroduce it but the bill should go further and not just ban the sale of new leasehold houses but new leasehold flats as well.”

A spokesman for the Department for Levelling Up, Housing and Communities, commented: “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.

“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.”

 

Michael Gove introduces long-awaited Leasehold and Freehold Reform Bill in parliament

 

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12 Comments

  1. MrManyUnits

    What does this man/party actually deliver? oh yes, high inflation, high taxes, low growth and lousy services, deep down they don’t want any changes, but Labour will screw the whole property market.

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    1. Anonymous Coward

      But will they, though.

      I grew up a Tory boy and always thought that the Labour Party caused financial troubles.

      However, in recent history it would appear that the Labour Party have actually been very fiscally responsible and have acted in the best interests of the UK population. The Credit Crunch wasn’t their fault, but they got voted out anyway.

      As you mention, we’ve then had 13 years of Tory “austerity” which has increased our taxes without helping the common man at all whilst lining the pockets of the already wealthy and taking a significant percentage of our GDP into offshore accounts.

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  2. Targeting 3 week exchanges

    Let’s have another 4 years of this party / government.

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  3. BillyTheFish

    More haste less speed?

    The problem with the political system is that anyone coming into a post usually has pretty much zero or near zero expierience in the relevant industry. Until that changes it’ll be bungle after bungle, well with this lot add another bungle to the list

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  4. Isa B Agent

    If you think this is bad, wait and see what happens after the next election …

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    1. jan-byers

      Taxes will go up to support Hamas
      It will be wonderful
      Everyone will be called THEY
      LOL

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    2. Cheese2

      I KNOW RIGHT. Nothing will top the glory of the past 12 years, it’ll only be down hill from here.

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      1. jan-byers

        Fine if you want to vote for a party that has Diana Abbot in who said that every policeman is a racist and the only problem with the UK is the white people who live in it
        Has members who supprt Hamas and cannot understand why Israel wants to defend itself
        Whose female Jewish members have to have a police escort to go to their own conference
        I cannot undertsajd the morality of anyone who votes for a scum racist party like that
        The Labour party hates Jews as much as Hitler
        I have to work now no more replies

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    3. Anonymous Coward

      Why?

      Life with the Labour Party in power was actually good until the Credit Crunch, but that can’t be blamed on Labour because it was a worldwide phenomenon.

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      1. jan-byers

        Blair govt hugely increased immigration and created ghettos in London.
        They also savged no money in the good times
        Darling cheerfully stated – there is no money left when he left office

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  5. AcornsRNuts

    There was a time when the Minster responsible for this would have fallen on his sword. Those were the days when MPs had principles. Nowadays it is oops, but still vote for us because the others are worse.

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  6. Anonymous Coward

    Despite the fact that the legal definition of a “house” has not yet been settled, it’s remarkable that such a simple thing is left out. I think I can do it in three clauses:

    1. No dwelling place deemed as a house can be sold as a leasehold property except where the property is built on land that is subject to a lease.
    2. Where a house must be sold on a leasehold basis, the term must be for a minimum of 250 years at a peppercorn rent and should amendments to the lease due to defective clauses be required then the freeholder may not charge a fee.
    3. Any service charges payable must relate only to communal services provided for the estate but may not include charges for the road or street lighting and etcetera.

    Clause 1 is the ONLY reason a house NEEDS to be leasehold – you cannot grant a freehold title where the land underneath is owned on a lease.

    The last clause is to force developers

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