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PROPERTY NEWS 119
Cracking down on unjust leaseholds
Government plans to ban sale of ‘unjust’ leasehold houses, why families need new homes with greater fl exibility, plus exclusive new home for Beulah Road and the chance to snap up a piece of Georgian Gothic living in Hadlow
freehold. The move is designed to end the exploitation of would- be buyers.
I
People buying homes sold under leasehold, in which the owner buys only the right to occupy and use a property not ownership of the land itself, regularly face unacceptable fees and costs from the landowner, making them hard to sell. Sajid Javid has said he wants to put a stop to these “unjust” and “unnecessary” practises. Under new proposals, the payment of “ground rents” on new-build homes
f Government proposals outlined by Communities Secretary Sajid Javid go ahead, it could soon become illegal to sell new-build homes under leasehold instead of
IT’S CLEAR FAR
TOO MANY NEW HOUSES ARE BEING BOUGHT AND SOLD AS LEASEHOLDS EXPLOITING HOMEBUYERS
could be banned completely. The proposals, which are subject to an eight- week consultation, aim to make future leases fairer by reducing ground rents so they “relate to real costs incurred”. The plans include measures to close legal loopholes to protect leaseholders who can be left vulnerable to possession orders, as well as changing the rules on Help to Buy equity loans so they can only be used for “new-built houses on acceptable terms”. Mr Javid said: “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.
Our proposed changes will help make sure leasehold works in the best interests of homebuyers now and in the future.”
Fact fi le
• Leaseholders pay fees to the freeholder – who could be the property developer or the local authority in the case of homes formerly owned by the council – who retains legal ownership of the ground on which the leaseholder’s home is built.
• Flats have traditionally been sold on a leasehold basis, but there are now 1.2 million houses that have leases, including around 170,000 detached homes. • More than 10,000 new leasehold houses have been sold through Help to Buy since its launch in 2013. • In 1996, just 22% of new-builds were leaseholds, but by 2015, this number had increased to 43%.
Image licensed by Ingram Image © lev dolgachov
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