New government plans
‘Radical’ new proposals have been revealed by the government to ban ‘unfair’ leaseholds.
The proposals announced today plan to ban new build houses being sold as leaseholds as well as restricting increasingly expensive ground rents.
Leaseholds generally apply to flats or buildings that have shared spaces but developers have been increasingly selling houses with leasehold terms.
The proposals only relate to properties in England and a consultation on the proposals will last for eight weeks.
Communities Secretary, Sajid Javid said: “It’s clear that far too many new houses are being built and sold as leaseholds, exploiting home buyers with unfair agreements and spiraling ground rents.
“Enough is enough. These practices are unjust, unnecessary and need to stop.
“Our proposed changes will help make sure leasehold works in the best interests of homebuyers now and in the future.”
The Department for Communities and Local Government estimate there are 1.2m leasehold houses in England.
The terms of some leases they said often expose ‘homebuyers to unreasonable and long-term financial abuse.’
Recent cases reported include; a homeowner being charged £1,500 by the company to make a small alteration to their home and a family house that is now unsaleable because the ground rent is expected to hit £10,000 a year by 2060.