The controversial practice by developers of selling new houses as leasehold, which has left homeowners out of pocket to the tune of thousands of pounds, has been axed.
We’re delighted that the government has taken this step, because the ground-rents on these leaseholds have been nothing short of pernicious.
From now on, all new houses must be sold on a freehold basis unless there are exceptional circumstances. At the same time, ground-rents on new leases have been reduced to zero, to prevent homeowners being out of pocket.
The move is a result of a consultation by the Law Commission, which looked into the leasehold controversy. The proposals have already had a fundamental impact on the housing market since they were unveiled, with the sale of leasehold houses falling from 11% to just 2% this year.
There was much publicity about the huge costs homeowners had incurred. It also made selling on a house with a lease difficult, with buyers reluctant to take on a property with costly fees attached.
Communities Secretary James Brokenshire announced other measures to help the housing market:
We’re delighted the government has taken these steps, which should have a positive impact on the housing market.