All new build homes should be sold on a freehold basis in future, in a bid to tackle unfair and exploitative leasehold practices, the government announced in recent weeks.
Under the current system, leaseholders who own their property but not the land on which it stands can end up trapped paying unfair charges and hefty ground rents, with some finding their properties impossible to sell.
In a speech to the Chartered Institute of Housing conference in Manchester, the Rt Hon James Brokenshire MP confirmed plans to abolish the selling of new houses as leasehold properties and reduce ground rents for new leases to zero.
More than sixty property developers have so far pledged that they will commit to freeing existing leaseholders trapped in deals where ground rents double every 10 or 15 years.
“We will legislate to ensure that in the future – save for the most exceptional circumstances – all new houses will be sold on a freehold basis,” said Mr Brokenshire. “We are committed to taking bold action to reform the sector and will be pressing ahead as soon as parliamentary time allows – helping us deliver our promise to make the home buying and selling process quicker, cheaper and easier.”
An end to selling delays
Owners of leasehold properties can face lengthy delays and costs when trying to obtain the information they need from freeholders and managing agents to sell their homes.
The government plans to introduce a new time limit of 15 working days and a maximum fee of £200 so that the home-buying process is cheaper, faster and easier.
Under the measures announced, buyers who are incorrectly sold a leasehold home should be able to get their freehold outright at no extra cost. Developers won’t be able to sell leasehold houses through the Help to Buy Scheme either, other than in “exceptional circumstances.”
More help for renters
The government also unveiled plans to make it easier for renters to transfer their deposits when moving home.
Some renters find themselves trapped in their current homes or fall into debt because they have to provide a second deposit to their new landlord to secure a property.
Ministers are inviting proposals to make it easier for renters to move deposits directly from one landlord to another when moving home.
Mr Brokenshire said: “Freeing up deposits and allowing a renter’s hard-earned cash to follow them from property to property – as they move to take that perfect job, to move nearer to family, or find a place that suits their changing needs – will create a fairer housing market that works for all.”
Leaseholds axed for all new houses