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Bill to ban creation of new leasehold houses to be introduced to Parliament

The Leasehold and Freehold Reform Bill will enter Parliament later (James Manning/PA)
The Leasehold and Freehold Reform Bill will enter Parliament later (James Manning/PA)

Long-awaited legislation that would ban the creation of new leasehold houses in England and Wales will be introduced to Parliament later.

The Leasehold and Freehold Reform Bill will mark its first step on the path to become legislation, hailed by Housing Secretary Michael Gove as a “landmark moment for millions”.

Other than in exceptional circumstances, new houses in England and Wales will be freehold from the outset, under the planned reforms.

But campaigners have expressed concern that the sale and purchase of leasehold flats will still not be banned.

Mr Gove said: “People work hard to own a home.

“But for far too long too many have been denied the full benefits of ownership through the unfair and outdated leasehold system.

“That’s why liberating leaseholders forms a vital part of the Government’s Long-Term Plan for Housing.

British Irish Council summit
Housing Secretary Michael Gove (Brian Lawless/PA)

“So today marks a landmark moment for millions of leaseholders across the country, as we unveil laws to deliver significant new rights and protections, slash unfair costs and crack down on exploitation.

Rip-off charges will also be tackled, with a consultation on capping existing ground rents, to ensure leaseholders are protected from making payments that require no benefit or service in return and can cause issues when homeowners want to sell up.

Reforms to make it easier for leaseholders to purchase their freehold and tackle punitive service charges were outlined earlier this month in the King’s Speech.

The changes could make it easier for people to sell their properties and get mortgages.

The Leasehold and Freehold Reform Bill aims to improve homeownership for millions of leaseholders in England and Wales, by making it cheaper and easier for more leaseholders to extend their lease, buy their freehold and take over management of their building.

The standard lease extension term will be increased from 90 years to 990 years for both houses and flats, with ground rent reduced to £0.

This will ensure that leaseholders can enjoy secure ground rent-free ownership of their properties for years to come, without the hassle and expense of future lease extensions.

The legislation follows the Leasehold Reform (Ground Rents) Act 2022, which put an end to ground rents for new, qualifying long residential leasehold properties in England and Wales.