Plans to phase out leaseholds will feature in King’s Speech, says UK housing minister

The UK Government’s housing minister has confirmed that plans to “phase out” leaseholds will feature in the King’s Speech next month.

Rachel Maclean tweeted on Sunday: “We will restore true home ownership to millions of people and end the reign of rip-off freeholders and incompetent, profiteering, management companies.”

Housing Secretary Michael Gove told MPs in July that “God willing” the plans to abolish the current system of leaseholds would feature in the King’s Speech that lays out the Government’s legislative agenda.

Ms Maclean’s tweet follows a report in The Sunday Times saying that all new houses in England and Wales will have to be sold as freehold properties under plans being drawn up by Mr Gove.

The plans have been much-delayed and appear to have been watered down from what was once intended to be a root-and-branch overhaul of the leasehold system that Mr Gove has previously labelled “feudal”.

The form of home ownership gives the householder the right to live in a property for a fixed number of years.

But there have been mounting concerns about practices in the sector, including over the levying of hefty charges and a lack of transparency.

Ground rents

A spokeswoman for the Department for Levelling Up, Housing and Communities said: “We have already made significant improvements to leasehold – ending ground rents for most new residential leases and will make it easier and cheaper for leaseholders to extend their lease or buy their freehold.

“The Secretary of State has been clear that we will bring forward legislation to protect leaseholders as soon as is possible.

“This will give them more information on their service charge costs and ensure they are not subject to any unjustified legal costs.”

Parliament has been prorogued ahead of the King’s Speech on November 7, with Prime Minister Rishi Sunak’s Government set to use the monarch’s address to lay out its plans ahead of a likely election next year.

Officials in Mr Gove’s department said the Government, as part of new reforms, is committed to transforming the experience of leaseholders by making it easier and cheaper for them to extend their lease or buy their freehold.

Ministers also want to make it simpler and quicker to take control of the management of their building under so-called “right to manage” proposals, they said.

The plans are set to include banning new leasehold houses so that all new houses are freehold from the outset other than in exceptional circumstances.

The Government also intends to deliver a reformed commonhold system as an alternative to leasehold ownership for flats, officials said.

Labour has committed to banning leasehold tenure if it wins the next general election.