As of writing it has emerged that the government plans to ban the sale of leasehold new build houses.  Under the proposals flats could still be sold under a leasehold arrangement however the ground rents charged would be limited to a “peppercorn” amount.  Why is this important?


Recently the press has been doing quite a lot of investigating into leasehold properties and what they have found is astounding.


Multiple newspapers have reported in their findings that in several situations leaseholders have come across some potentially unfair charges when they want to make alternations to their properties both internally and externally.  The charges affectively give them no more freedom than what a tenant may have in rented accommodation.  They have to seek the permission of the freeholder to make charges and in some cases were being hit by exploitive charges, in some instances just for asking permission and they would be charged again if they were then to make the changes.  Other charges that have been said to be unjust are leaseholders being quoted large, some may say extortionate, amounts when trying to purchase the freehold of a property only a couple of years old, to spiralling ground rents which increased by large percentages at regular intervals.


Now I’m sure, as with anything, this isn’t a practice all housebuilders will implement and a handful will be attracting all the bad press but a move to ban new leasehold properties will surely be welcomed by many.


Sajid Javid, the communities secretary, who is putting forward these plans said: “It’s clear that far too many new houses are being built and sold as leaseholds, exploiting homebuyers with unfair agreements and spiralling ground rents.  Enough is enough.  These practices are unjust, unnecessary and need to stop.”


The fact that the government is now putting forward proposals to outright ban these procedures suggests they are quite concerned with this and are serious about putting a stop to the potentially exploitive nature of certain leasehold hold arrangements.


Initially the government has noted that there are no concrete plans which would instruct homebuilders to take retrospective action for those already affected.  However, there is an eight week consultation period where points like this will likely be addressed.


Daniel Brown BSc (Hons), Cert SMP

31st July 2017

New Build Leasehold Houses To Be Banned?