Prince William has agreed to end the last feudal restrictions on land ownership in parts of his hereditary Duchy of Cornwall estate after decades of complaints from residents.

The Prince of Wales will allow tenants in two of the most environmentally sensitive areas of his 55,000-hectare (135,000 acres) estate the right to buy the freehold to their homes for the first time.

Residents of central Dartmoor, the national park, which is the duchy’s largest landholding, and the Somerset village of Newton St Loe, near Bath, will be given the new right under the 2024 Leasehold and Freehold Reform Act, when secondary legislation is introduced by the government to bring it into force.

But the heir to the throne, who has faced criticism after it was revealed that his and King Charles’s property empires are earning millions from cash-strapped public bodies and charities, has refused to extend the freedom to duchy tenants in Scilly.

Leaseholders on the islands off the Cornish coast will now be able to buy much longer 990-year leases for their properties, which the duchy argues is almost as good as the freehold. But the duchy will have the right to buy them back to manage the supply of housing on the islands, under a deal similar to the one that will apply to 5,000 National Trust properties in the government reforms.

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The Duchy of Cornwall, which stretches across 23 counties, was created in 1337 and the laws governing residents and tenants on its land are complex.

The estate resisted efforts to bring it in line with the rest of Britain under the then Prince Charles, demanding exemptions from earlier leasehold reform legislation for Dartmoor, Newton St Loe and Scilly on the grounds of environmental sensitivities and their historic ties with the crown.

But the last Conservative government, which passed the primary legislation, and the new Labour administration, which intends to implement the secondary legislation, both appear to have put pressure on the duchy to change its approach.