Propertymark has given its backing to the ban on ground rents for new leasehold properties and has reminded agents of their responsibility to provide consumers with tenure information.
The government confirmed last week that a ban on ground rent on new leasehold properties in England and Wales will come into force on 30 June 2022.
Where an existing lease is extended as part of an agreed or voluntary renewal, the ground rent can continue during the remainder of the old lease, but the ground rent must be zero for any new period of time added to the lease.
The Department for Levelling Up, Housing and Communities said this was the first part of the government’s reform package that will make homeownership cheaper, fairer and more secure.
Future measures include a new right for leaseholders to extend their leases to 990 years at zero ground rent and an online calculator to help leaseholders find out how much it would cost to buy their freehold or extend their lease.
Timothy Douglas, policy and campaigns manager for Propertymark, says: “These unfair and restrictive charges levied on leasehold homeowners have in some cases been allowed to become a cash-cow and abolishing them has been a long time coming.
“Propertymark has been a strong campaigner on this issue and it was our investigation in 2018 that helped bring the scale of it to light for the first time, revealing the impact it was having on the housing market as leasehold homeowners struggled to improve or sell their properties as a result.
“These changes only legally restrict ground rents on new leases, so we hope they are a catalyst for further reform by the housebuilding sector itself and the UK Government that will release the estimated over one million existing homeowners who remain locked into these agreements.”
It comes as agents face a deadline of the end of this month to comply with new material information rules set by the National Trading Standards Estate and Letting Agent Team.
All property listings must include the council tax band or rate (for lettings and sales), as well as the property price and tenure information (for sales).
Douglas adds: “Agents should be ready to understand the implications and the material information they need to provide to consumers when these properties come on the market from 30 June onwards.”