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
