Gove’s leasehold reform bill does not ban leaseholds on new-build houses

Michael Gove’s flagship bill to end leaseholds on newly built houses in England and Wales contains no provision to end leaseholds on newly built houses in England and Wales, as the key clauses to do so were omitted in a last-minute rush to write it.

The housing secretary unveiled his long-promised leasehold reform bill this week, after the government announced it in the king’s speech. Gove has long promised to end what he calls the “feudal” leasehold system, which is unique to England and Wales among developed nations.

In a press release, the department said the bill would ban developers from selling new houses under leasehold, but the Times revealed on Wednesday that the bill does not actually do so.

Officials said they were not able to include the clauses on banning new leasehold houses because of a last-minute wrangle between Gove’s department and Downing Street over whether the bill would be included in the king’s speech at all.

They said they had not had time to finalise the complex legal text, but added the measures would be inserted into the bill via a government-backed amendment in the Commons or Lords.

Related: What is leasehold, and are there any alternatives?

A government spokesperson said: “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.”

The omission has irritated leaseholders, who were already upset by the government’s refusal to ban leasehold for newly built flats.

Harry Scoffin, the founder of Free Leaseholders, a campaign group launched last week to campaign for stronger measures in the bill, said: “It is absolutely surreal that the leasehold new-build houses ban, the one leasehold policy that has survived six years and four prime ministers, doesn’t feature in the actual wording of this government’s supposedly landmark leasehold and freehold reform bill.

“More seriously, the bigger crime is not to commit to a ban on future leasehold flats, where the real money is being made and abuse of homeowners [is] routine. While government has dodged commonhold, they could at least give new-build apartment buyers a share of the freehold for resident control from day one.”

Related: ‘Too extreme’: homeowners each face £33,000 council bill to replace communal heating system

Matthew Pennycook, the shadow housing minister, said: “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.”

Tory MPs have promised to amend the bill not only to include a ban covering new houses but to extend it to new-build flats as well.

Labour has promised to end leaseholds on new flats and houses and to encourage a new system of common ownership of shared spaces.

“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,” Pennycook said.

The government also said on Wednesday that it had not met its targets on housebuilding. It said 234,400 new homes were built in 2022-23, almost exactly the same number as the previous year and below the target of 300,000 new homes a year.