Boris Johnson allies pile pressure on Michael Gove over his 'failed' promise to scrap 'feudal' leasehold system and urge him to act on 'fleeceholds' - as Labour blast 'eviscerated shell' of Tory reforms

Boris Johnson’s allies have piled pressure on Michael Gove over a failed promise to scrap the ‘feudal’ leasehold system in England.

The Housing, Levelling Up, and Communities Secretary came under attack from ex-advisers to the former PM in the House of Lords.

During peers’ first debate on the Government’s Leasehold and Freehold Reform Bill, Mr Gove was warned the legislation does not meet a Tory manifesto pledge.

He also faced demands to deal with so-called ‘fleecehold’ arrangements, which were described as the ‘next great scandal approaching the housing market’.

Labour joined the attacks on Mr Gove and branded his proposed reforms an ‘eviscerated shell of a Bill’.

Boris Johnson ‘s allies have piled pressure on Michael Gove over a failed promise to scrap the ‘feudal’ leasehold system in England

Leaseholds are a form of home ownership that gives the householders the right to live in a property for a fixed number of years

Baroness Finn, former chief of staff to Mr Johnson in Downing Street, urged the Government to stick to its manifesto commitment of banning all leasehold homes

Leaseholds are a form of home ownership that gives the householders the right to live in a property for a fixed number of years.

But it can mean residents having to pay service charges to the freeholder, who owns the land.

Mr Gove last year committed to abolishing the ‘outdated, feudal’ leasehold system by the next general election.

This followed a 2019 Tory manifesto commitment to implement a ‘ban on the sale of new leasehold homes’.

Amid reports of a battle between Mr Gove’s department and Rishi Sunak’s Downing Street team, the Government has since been accused of watering down reforms.

The Leasehold and Freehold Reform Bill bans the sale of new leasehold houses –  except in exceptional circumstances – but does not ban the sale of new leasehold flats, which make up 70 per cent of properties affected.

Baroness Finn, former chief of staff to Mr Johnson in Downing Street, last night urged the Government to stick to its manifesto commitment of banning all leasehold homes.

‘Boris Johnson secured a substantial majority just five years ago on a manifesto that included the promise to implement a ban on the sale of new leasehold homes,’ she told fellow peers in the Lords.

‘The Government has sought to suggest that banning leasehold houses fulfils this promise. It does not, for the majority of leaseholders are in flats.’

Baroness Finn, an ex-girlfriend of Mr Gove, added: ‘I suggest that the Government takes the power to allow the Secretary of State to end all leaseholds on permitting here that it will only be commenced once the market was ready.’

Labour’s housing spokesperson Baroness Taylor of Stevenage said: ‘From the original vision for the Bill, what we have before us today is a virtually eviscerated shell of a bill.’

She added that it has ‘little to give comfort to the people and families who had hoped to realise their dream of homeownership, and have found instead that being a leaseholder simply does not offer the security and control of their lives that their dream promised’.

The frontbencher added: ‘This Bill is a very long way from what leaseholders have been waiting and hoping for, and that is an end to the injustice of the anachronistic leasehold system.’

Lady Taylor said the omission of a ban on new leasehold flats justifies her description of an eviscerated bill because it ‘means the Bill simply won’t do what it sets out to do’.

Meanwhile, 46 MPs have written to the Government calling for an end to ‘fleecehold’ agreements, whereby people with freehold properties can be locked into contracts with private companies to maintain communal areas around them.

In a letter addressed to Mr Gove, the MPs – including two former housing ministers – highlighted ‘problems with the unadopted, private estates model’.

They called on the Government to ‘go further to empower residents on existing Fleecehold estates, and to end this model for new estates’.

Tory peer Lord Moylan, a former advisor to Mr Johnson when he was London mayor, said: ‘I think this (‘fleecehold’) is the next great scandal approaching the housing market.

‘It is in very large measure attributable to councils who are simply resiling from taking on their duties.

‘They will accept the additional council tax that is generated by the new properties but they will not take on the responsibilities for maintaining those common amenities.’

Responding to ‘fleecehold’ concerns, housing minister Baroness Scott of Bybrook said: ‘It is up to the developers and the local planning authority to agree on specific issues relating to new development, including appropriate funding and maintenance arrangements.’

She said the Government was ‘carefully considering’ a report by the Competition and Markets Authority (CMA) into problems faced on such unadopted new-build estates.

As well as strengthening consumer protections, the regulator is also considering increasing the extent to which amenities are taken on by councils.

Earlier, Lady Scott told peers that the Bill would ban new leasehold houses other than in exceptional circumstances.

She added: ‘Flats on the other hand have shared fabric and infrastructure and therefore require some form of arrangement to facilitate management and this has historically been facilitated by a lease.

‘Nonetheless the Government recognises the issues in the leasehold system and I have heard the concerns regarding a lack of commonhold measures as a meaningful alternative to replace leasehold for flats.

‘I want to reassure you that the Government remains committed to the commonhold reform and we see it as long-term replacement for leasehold.’

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