Legislation to ban leaseholds on almost all new-build houses is among the measures promised by communities secretary Sajid Javid to cut out unfair and abusive practices within the leasehold system. The government also said it would work with the Law Commission to make the process of purchasing a freehold or extending a lease much easier, faster and cheaper
Campaigners for reform warmly welcomed the announcement, which follows growing public outrage at first-time buyers and elderly people who find themselves with unsaleable homes. Sebastian O’Kelly, trustee of the Leasehold Knowledge Partnership, described the announcement as ’a full frontal assault on a multi-billion pound sector which has been the property market’s dirty little secret.’
Mark Chick, director of the Association of Leasehold Enfranchisement Practitioners and partner at London firm Bishop & Sewell, said: ’Clearly the current leasehold system does not work effectively for leaseholders or freeholders, and we are very pleased to see that the government is taking steps to bring about real changes to the system that will benefit consumers.’
The Law Society said it would be contributing the the Law Commission’s review of residential leasehold law. A spokesperson said: ’The Law Society supports the government’s moves to protect home buyers and combat the abuse of complicated leasehold terms by some developers. It is in the best interests of home buyers if properties are sold freehold unless there are compelling reasons justifying a leasehold tenure.’
The government said a consultation showed an overwhelming response in favour of tackling unfair practices. Javid said the response showed that ’real action is needed to end these feudal practices.’
According to the government, measures to be introduced include:
- legislating to prevent the sale of new build leasehold houses except where necessary such as shared ownership
- making certain that ground rents on new long leases – for both houses and flats – are set at zero
- working with the Law Commission to support existing leaseholders and make the process of purchasing a freehold or extending a lease much easier, faster and cheaper
- providing leaseholders with clear support on the various routes to redress available to them
- a wider internal review of the support and advice to leaseholders to make sure it is fit for purpose in this new legislative and regulatory environment
- making sure freeholders have equivalent rights to leaseholders to challenge unfair service charges.
The Communities and Local Government Department said that legislation would be introduced as soon as possible subject to the availability of parliamentary time.