Boris Johnson waters down plans to help homebuyers by ending sales as leaseholds

'This looks like Conservatives backtracking in the face of opposition from vested interests in the property market,' says Labour

Boris Johnson’s government has watered down commitments to end the sale of new homes as leaseholds and combat exploitative arrangements for homeowners.

It comes as the new majority Conservative government unveiled dozens of bills in the Queen’s Speech on Wednesday, as Boris Johnson set out his domestic agenda beyond Brexit for the coming year.

Four bills addressing housing were included in the package of reforms, including plans to give tenants greater rights and measures to improve building safety in the wake of Grenfell Tower fire tragedy.

Theresa May’s government had vowed to axe all new homes being sold as leaseholds to “tackle unfair practices” and reduce ground rents to zero in an effort to put “cash back into the pockets of future homeowners”.

The new Housing Bill says ministers will end “unfair practices” in the leasehold market, but adds: “The government will ensure that if a new home can be sold as freehold, then it will be.”

It continues: “We will get rid of unnecessary ground rents on new leases and give the rights to homeowners to challenge unfair changes. The government will also close loopholes to prevent unfair evictions and make it faster and cheaper to sell a leasehold home”.

Labour’s shadow housing secretary, John Healey, said: “This looks like the Conservatives backtracking in the face of opposition from vested interests in the property market.

“The truth is a Conservative government can’t help leaseholders because they won’t stand up to those who are profiting out of the leasehold scandal.”

Consumer groups and others have warned for years that buyers of leasehold houses and flats have been ripped off on a large scale. Leaseholders are granted the right to live in their property for an agreed period – usually between 99 and 125 years.

Under the lease, the freeholder typically charges ground rent to the leaseholder. Charges can also be levied for making alterations to a leasehold house. A significant number of leaseholders say they have been hit with unjustifiable rises to the ground rent or unfair charges for making minor cosmetic changes such as changing a doorbell.

A separate Renters’ Reform Bill will also reverse measures introduced by Margaret Thatcher’s administration by ending landlords’ ability to evict tenants on a whim and without reason. Likely to be introduced to parliament in the new year, the Bill vows to abolish the use section 21 notices as set out in the 1988 Housing Act.

Known as “no-fault evictions”, the practice enable landlords in the private rental sector to evict tenants without reason once their fixed-term contract has ended.

Labour has previously claimed the rules have contributed to a rise in homelessness in the England and Theresa May had promised the biggest overhaul for renters. Ahead of the general election, Mr Johnson was accused of betraying renters after appearing to shelve the plans in his first Queen’s Speech as prime minister.

But addressing the misery of ‘no-fault evictions’, No 10 said today the new legislation will protect tenants and abolish the Section 21 notices. The government also said it would introduce a “new lifetime deposit” for renters so that tenants do not have to save for a new deposit every time they move house.

A spokesperson for the Ministry of Housing, Communities & Local Government later contacted The Independent and said "in all but exceptional circumstances" new houses built will be delivered on a freehold basis under the reforms to be set out in draft legislation.

“We have given a cast iron guarantee that unfair leasehold practices will come to an end under this government, and it is completely inaccurate to suggest otherwise," they added.