Following a speech at the Chartered Institute of Housing Conference earlier today, James Brokenshire, Secretary of Ministry of Housing, Communities and Local Government (MHCLG) has announced that all new build housing will need to be sold as a freehold property.
There will be an immediate action to ban Help to Buy developers selling leasehold houses. Homes England will now renegotiate all Help to Buy contracts ‘to explicitly rule out the selling of new leasehold houses, other than in exceptional circumstances, to protect new home buyers from unscrupulous charges.’
James Brokenshire also confirmed that pernicious ground rents on all new leases will be reduced to £0 in a bid to prevent leaseholders from being charged excessive fees without receiving any benefit.
The changes also looked to improve efficiency and speed in the leasehold buying process. Freeholders will now be capped on the time they can take and the amount they are able to charge for vital information regarding a leasehold contract. Moving forward, freeholders will have a maximum of 15 working days to send this information and can charge no more than £200 for the service.
All leaseholders that were incorrectly sold a leasehold property will now be able to get their freehold title outright at no extra cost.
Communities Secretary Rt Hon James Brokenshire MP, told the Chartered Institute of Housing conference:
“We have long recognised that we have a responsibility to confront unfairness in the leasehold market. Last year we consulted on proposals including the leasehold house ban and ground rent reduction.
“Today I can confirm we will go ahead with our original plan to reduce ground rents on future leases to zero, as opposed to a cap of £10 per year.
“And we will legislate to ensure that in the future – save for the most exceptional circumstances – all new houses will be sold on a freehold basis.
“We are committed to taking bold action to reform the sector and will be pressing ahead as soon as parliamentary time allows – helping us delivery our promise to make the home buying and selling process quicker, cheaper and easier.”
Paula Higgins, Chief Executive of HomeOwners Alliance, commented:
“We welcome the Government’s raft of measures announced on leasehold reform and better protection for those buying new homes.
“They have stood up to industry by saying that all future ground rents must be zero and there are no exemptions. This move will not only put a stop to one way unscrupulous freeholders can make money out of leaseholders, but it will make extending leaseholds and buying the freehold less complicated.
“The leasehold system is incredibly complex, which has allowed some developers, freeholders and managing agents to abuse it. As we called in our Homes Held Hostage report, we would like the leasehold system to be abolished over time.
“A survey out today by the National Leasehold Campaign found that 72% of those who have encountered leasehold problems are very anxious and worried for the future. So we must recognise that these measures will do little to help existing leaseholders living a nightmare with their mental well-being badly affected.”
What will these changes mean for people trapped in leaseholds? How important are these changes?
One Response
But no help for existing leaseholders. A right to buy a conversion to nil ground rent is needed