Planning and Housing

25.07.17

DCLG considers banning ‘unfair’ leaseholds on new-builds

The DCLG has today announced ambitions to crack down on “unfair abuses” that could ban new-builds being sold as leaseholds and restrict ground rents to as low as zero.

The proposals have been raised to deliver a fairer, more transparent system for buyers. Ground rents have doubled over the course of 10 years, often making properties impossible to sell on.

A consultation into the plans, which aim to stop homeowners being exploited by the company who owns the leasehold – as some have been charged £1,500 to make a small alteration to their home – has been opened today.

The measures only apply to England, where there are currently 1.2 million leasehold houses, with that number quickly growing.

“It’s clear that far too many new houses are being built and sold as leaseholds, exploiting home buyers with unfair agreements and spiralling ground rents,” said communities secretary, Sajid Javid.

“Enough is enough. These practices are unjust, unnecessary and need to stop. Our proposed changes will help make sure leasehold works in the best interests of homebuyers now and in the future.”

Anne Baxendale, Shelter’s director of communications, policy and campaigns, argued the current housebuilding system was failing families all over the country, many of whom are stuck with ever-increasing charges on expensive, and often second-rate, new homes.

“While the leasehold system can help make sure new homes are properly serviced, it’s clear it has been massively abused by developers who are using this to get something for nothing,” Baxendale explained. “Ground rent charges should be transparent and fair, and it’s vital that families hit by unjust charges are compensated.

“It’s good to see the government upholding commitments from their Housing White Paper, but it’s also important to remember this is only one small piece of the puzzle when it comes to our broken housing system.

“The only way we can put an end to this miserable housing crisis is for the government to get behind a different way of building homes, which puts the needs of families and communities first.” 

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