Housebuilders in Wales have agreed to stop offering homes for sale on a leasehold basis unless “absolutely necessary”.

The Welsh Government has secured agreements from major building firms such as Taylor Wimpey, Bellway, Barratt, Redrow and Persimmon for houses and flats that will limit the use of leaseholds on Help to Buy and other new-build developments in the country.

It won’t apply in England which is separately pursuing its own leasehold reform agenda and has promised legislation banning leaseholds on new-builds and limiting ground rents.

Building firms in Wales operating with the Help to Buy scheme will have to present a genuine reason for a house to be marketed as leasehold.

Leasehold contracts will have to meet minimum standards, including limiting the starting ground rent to a maximum of 0.1% of the property’s sale value, while leases will have to run for a minimum of 125 years for flats and 250 years for houses.

Housing and Regeneration Minister Rebecca Evans said: “These measures have been developed in co-operation with the industry through our House Builder Engagement Programme including the Home Builders Federation and Federation of Master Builders.

“We have acted swiftly to take targeted and tangible action over concerns about leasehold sales on new-build homes, and where leasehold is already the tenure, I am setting up a new group to recommend reforms to the system.

“I intend to put in place a voluntary Code of Practice to underpin these measures, improve standards and to promote best practice.

“This is only the start of my plans to address concerns around leasehold.

“I have not ruled out the possibility of legislation in the future, which may well be needed to make leasehold, or an alternative to it, fit for the modern housing market.”