The government has recently proposed a ban on selling new build houses on a leasehold basis, in addition to cutting ground rent to zero.
The ban follows widespread media coverage on pervading onerous terms in residential leases, resulting in doubling ground rent every decade and freehold costs rocketing when purchased by third party investors. Such leases have resulted in many leasehold properties becoming unsellable, years down the line.
Whilst the proposed ban has generally been embraced, the position of existing leasehold homes and their respective residents has not yet been clarified. It is anticipated that a consultation will take place to consider providing support to those currently affected as well as awarding them with greater rights in relation to their property.
The Department for Communities and Local Government took the issue of growing ground rents, and commented on how these could be amended: “Under government plans, [ground rents] could be reduced so that they relate to real costs incurred, and are fair and transparent to the consumer.”
Let’s watch how this plays out.
Til next time