The main legislation proposed by Michael Gove to eliminate leaseholds on newly constructed houses in England and Wales does not include any measures to actually end leaseholds on these properties. This is because the crucial clauses that would have accomplished this were accidentally left out in the haste of drafting the bill.
The Secretary of Housing presented the leasehold reform legislation this week, following its announcement in the King’s speech by the government. Gove has consistently vowed to abolish the “feudal” leasehold system, which is exclusive to England and Wales among developed countries.
The department stated in a press release that the proposed bill would prohibit developers from selling newly built homes under a leasehold agreement. However, the Times reported on Wednesday that the bill does not actually include this provision.
Authorities stated that they were unable to incorporate the stipulations regarding prohibiting new leasehold houses due to a last-minute disagreement between Gove’s department and Downing Street about whether the bill would be featured in the king’s speech at all.
According to them, they have not had the opportunity to complete the intricate legal document. However, they stated that the provisions will be added to the bill through a government-supported amendment in either the House of Commons or the House of Lords.
A representative from the government stated that freeing leaseholders is an important aspect of the government’s comprehensive housing plan. Therefore, we are implementing significant changes to the leasehold and freehold system, which will grant leaseholders new rights, powers, and protections. This is being done through the leasehold and freehold reform bill, which is the largest overhaul of the system in a generation.
On Monday, we stated that we will introduce changes to the bill as it goes through parliament, which will include the prohibition of leasehold houses.
Leaseholders have been further frustrated by the exclusion, as they were already displeased with the government’s decision to not prohibit leasehold for newly constructed apartments.
Harry Scoffin, who started Free Leaseholders, a group that began last week to advocate for stronger provisions in the legislation, remarked, “It is extremely strange that the prohibition on leasehold new-build houses, the only leasehold policy that has withstood six years and four prime ministers, is not included in the actual language of this government’s supposed groundbreaking bill on leasehold and freehold reform.”
In all seriousness, the greater offense is failing to enforce a ban on leasehold flats in the future, as this is where the majority of profits are being made and homeowners are often taken advantage of. Instead of ignoring the commonhold system, the government could at least provide new apartment buyers with a portion of the freehold so they have control over their residence from the beginning.
Matthew Pennycook, the opposition housing minister, stated: “This much-needed legislation not only fails to guarantee the sale of new flats as freehold, despite claims made by ministers, but it also does not fulfill its promise to prohibit the sale of new leasehold houses.”
Conservative Members of Parliament (MPs) have made a commitment to modify the legislation not just to prohibit new homes, but also to expand it to cover newly constructed apartments.
The Labour party has pledged to eliminate leaseholds for newly built apartments and houses, and to promote a new approach of communal ownership for shared areas.
Pennycook stated that a Labour administration will prioritize commonhold as the standard ownership arrangement for new properties, as part of their dedication to deeply and completely overhaul the leasehold system.
On Wednesday, the government announced that it had failed to reach its housebuilding goals. According to their report, only 234,400 new homes were constructed in 2022-23, which is almost identical to the previous year’s number and falls short of the target of 300,000 new homes annually.
Source: theguardian.com
