A bill to phase out some leaseholds in England and Wales will be included in the King’s Speech next week, the housing minister Rachel MacLean has confirmed.

The speech on 7 November, which sets out government plans for the coming year, will include the long-promised change to the controversial leasehold system, which has seen expensive fees imposed on homeowners.

The bill is expected to ban leaseholds for new houses, but not new flats.

The housing department estimates that there are almost 5 million leasehold homes in England – 70% of which are flats.

The proportion of new-build houses sold as leaseholds has fallen from a 15% high in 2016 to just 1% in December 2022.

The new bill would “restore true home ownership to millions of people and end the reign of rip off freeholders + incompetent profiteering management companies”, said MacLean in a social media post.

She did not provide further details but posted a link to a piece in the Sunday Times, which said that following a consultation the government would cap all existing ground rents at a very low rate, known as a “peppercorn” rate. Ground rents for properties sold after June 2022 are already capped.

The article also said the government would change the standard contract lease extension from 90 years to 990 years.

Labour’s shadow housing minister, Matthew Pennycook, unsurprisingly dismissed the government’s plans.

He said: “If this thin gruel is all we’re getting in the King’s Speech, leaseholders will have been failed.”

Pennycook added that Labour would “fundamentally and comprehensively reform the leasehold system”.

Labour’s plans to end ‘feudal’ leasehold system warmly welcomed