The Department for Levelling Up, Housing and Communities is currently grappling with a significant legislative oversight, as their much-anticipated bill to revolutionize England’s housing market failed to include a key reform: the ban on new leasehold houses. This mistake came to light after The Times reported that the government’s 132-page bill, which was rushed into the King’s Speech, did not fulfill its intended purpose.
Initially hailed as a landmark reform to end the “feudal” leasehold system in England, the department has now admitted to not drafting the crucial part of the legislation in time. This error leaves the government with the dilemma of either amending their bill or withdrawing and reintroducing it entirely.
The Leasehold and Freehold Reform Bill, a centerpiece of the King’s Speech, was touted to prohibit developers from selling new leasehold houses, except in rare circumstances, as a step towards abolishing leaseholds. Behind the scenes, however, it was revealed that the bill was drafted in haste due to a last-minute decision by No 10 to include it in the King’s Speech.
Consequently, the section banning new leaseholds wasn’t prepared for the bill’s first reading. The Times learned from sources that the government hoped to introduce these measures as an amendment during the bill’s committee stage next year. However, this approach might face procedural hurdles since the measure isn’t mentioned in the bill’s long title.
Labour’s shadow housing minister, Matthew Pennycook, who noticed the omission, criticized the bill for not delivering on its promise. He asserted, “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.” Pennycook pledged that a Labour government would adopt commonhold as the default tenure for new properties and fully implement the Law Commission’s recommendations on leasehold reforms.
Sebastian O’Kelly from the Leasehold Knowledge Partnership expressed surprise and disappointment at the absence of the promised ban in the legislation, emphasizing that the government has been pledging this since 2017. He suggested the bill should go further to include new leasehold flats.
In response, a spokesperson for the Department for Levelling Up, Housing and Communities stated, “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… 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.”