The end of unfair leaseholds - the Housing Secretary's promise
16 October 2018
By Andi Michael
The Housing Minister wants an end to unfair leaseholds - but what will this mean for those who have already bought leasehold properties?
The Leasehold Scandal has been ongoing for the last few years. Those buying new build houses who assumed they bought the freehold
or were under the expectation that they could buy their freehold down the line, were shocked to find them being sold on to private investors.
This meant issues like doubling ground rents, or a huge inflation in the asking price for the freeholds
. On average, leaseholders pay over £300 ground rent each year
, with some paying up to £700.
This was not only true for houses, but flats as well.
Some of the costs became extraordinary, and the properties were impossible to sell on, leaving buyers trapped in properties that were costing them more and more each year.
The Housing Secretary, James Brokenshire
has proposed that the majority of new build houses sold in the UK going forward should be sold as freehold, and that ground rents on new leases should be capped at £10.
Brokenshire has also recommended new measures to protect consumer interests, and for existing leaseholders who want to buy their freehold to work with the Law Society. The aim would be to minimise further cost to the consumer, along with making the process easier and quicker.
The proposal will be subject to consultation, with discussions likely to cover whether there are any appropriate exemptions, like shared ownership properties.