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Government set to ban leaseholds on new-builds in England

The government says it wants to ban “unfair” leasehold charges imposed on buyers of new-build homes in England. 

Under the measure, subject to an eight week consultation period starting this week, leaseholds on new-builds would be outlawed and ground rents could be reduced.

The initiative, believe to be scheduled for formal announcement today, comes after scandals involving some housebuilders and the doubling of some ground rents every 10 years.

"Enough is enough. These practices are unjust, unnecessary and need to stop," says Communities Secretary Sajid Javid.

The government has cited examples where one homeowner was charged £1,500 by the freeholding company to make a small change to their family home; another case study was a family home now impossible to sell because the ground rent is expected to hit £10,000 a year by 2060; and an owner who was told buying the lease would cost £2,000 but the bill came to £40,000.

The DCLG says some leases are now "increasingly onerous" and should instead "relate to real costs incurred".

The department calculates that 21 per cent of private housing in England is owned by leaseholders, with almost a third of those houses and the rest apartments.

The announcement came this morning in an article in The Times and a statement from the DCLG. 

  • David Bennett

    .... and the problem arises because the housebuilder throws in the legals (along with carpets, white goods etc), as part of the package to the buyer, whereby they (the buyer) do not receive balanced advise. A clear case of conflict of interest.

  • Mark Hempshell

    Added to which most people don't know what leasehold (or freehold for that matter) means anyway.

  • jeremy clarke

    Leasehold doesn't need banning as often it protects but what does need to change is the ability for builders to sell the freehold interest on to companies such as Homeground, also costs need to be confirmed in the lease and capped e.g. for buying the freehold or for enquiries at point of sale and for issues such as consent.

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