Rishi Sunak Faces Major Tory Rebellion If Leaseholds Ban Does Not Apply To Flats

A bill to phase out some leaseholds in England and Wales will be included in the King’s Speech tomorrow, but the long-promised change to the controversial system, which has seen expensive fees imposed on homeowners, is only expected to include new houses, and not flats, and that could prove a problem for the government.

The housing department estimates that there are almost 5 million leasehold homes in England – 70% of which are flats – and that is why Tory MPs plan to challenge the government if the planned leaseholds ban does not apply to flats.

According to The Guardian, Conservative backbenchers are prepared to bring amendments to the long-awaited leasehold reform bill, which will be one of the centrepieces of next week’s king’s speech but will not end leasehold on the majority of properties.

Several senior Tories said they wanted the government to end leasehold for new houses and flats, and were willing to bring their own amendments to the bill if it failed to do so. With Labour backing these MPs, they could even force a government U-turn or defeat.

Peter Bottomley, the longest-serving MP in the House of Commons, said: “If the government has not included in the bill things that are clearly necessary, both the Lords and the Commons will improve it. If anything is left out of the bill, it can be and will be improved.”

An unnamed Tory MP, who is helping organise the resistance to the government’s plans, added: “If this bill does not include flats, I absolutely will seek to amend it. If you’re buying a flat in a 50-apartment block, then there must be a way of doing it so that people can still own their own property and not be at the beck and call of a freeholder.”

Matthew Pennycook, the shadow housing minister, said Labour would back attempts to ban leasehold for new flats.

“It is deeply disappointing that the government appears set on legislating only for new houses to be sold as freehold, leaving those who buy flats trapped in an archaic system of home ownership,” he said.

“Labour believes commonhold should be the default tenure for all new properties, with the system completely overhauled so that existing leaseholders can collectively purchase more easily and move to commonhold if they wish.”

Harry Scoffin, a co-founder of the campaign group Commonhold Now, commented: “A failure to ban leasehold on new-build flats would be a betrayal of everything the government has promised since 2017. Doing so would cost the Treasury nothing and, crucially, stop yet more unsuspecting flat buyers from being sucked into the leasehold debt trap.”

Responding, a spokesperson 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.”

The likely impact of a new Leasehold Bill