New leasehold reform legislation faces tough scrutiny from MPs and leasehold groups who are frustrated by an expectation that it will only cover houses, not flats.

Part of the King’s Speech today, the Bill includes a ban on developers selling new houses under leasehold and will cap ground rents for new and existing properties, setting the default length of leases at 990 years, rather than 99. It won’t extend that ban to flats, which make up about 70% of all leasehold properties.

Tory MPs, many of whose constituencies have large numbers of flats, have backed more substantial reforms and are ready to bring amendments.

Nickie Aiken (main picture), MP for the Cities of London and Westminster, told the Guardian: “I want to see what the draft bill says, but other countries have ended leasehold for flats and we need to learn how it’s worked in practice. I wouldn’t be surprised if amendments are brought on this.”

Matthew Pennycook (pictured), the shadow housing minister, says Labour would back attempts to ban leasehold for new flats; this might ultimately force a government U-turn or defeat.

Meanwhile, news that Martin Boyd, chair of campaigning group the Leasehold Knowledge Partnership (LKP), is to become the chair of government quango the Leasehold Advisory Service is seen as significant by the LKP, which says someone with a highly critical agenda now has a permanent seat to influence the direction of leasehold reform.

Complained

Leaseholders many of whom are landlords have complained for years about a range of practices by some freeholders and managing agents. Housing Secretary Michael Gove has previously promised to stop what he calls the “feudal” system of freeholders maintaining control over properties.

The Leasehold Reform (Ground Rent) Act 2022 came into force last year, abolishing ground rents on all new long leases of flats and houses purchased after 30th June 2022, so that only a peppercorn rent, which is effectively zero, can be payable. However, it doesn’t apply to existing leases.