The Government announced last week that almost all new-build houses will in future have to be sold as freehold, and ground rents will be capped at just £10 a year. A new consultation of these plans has just been launched.
The announcement said that leaseholders currently pay on average over £300 ground rent a year, with some paying as much as £700.
Communities Secretary James Brokenshire said: “Unfair ground rents can turn a home owner’s dream into a nightmare by hitting them in the back pocket, and making their property harder to sell.
“Under the Government’s proposals, which are subject to consultation, the majority of new houses will be sold as freehold, and future ground rents will be reduced to a nominal sum.”
There was no suggestion that the move will be retrospective, implying that some recent home owners could still find their properties difficult to sell.
The consultation will run for six weeks and estate agents are among those specifically invited to comment.
National Association of Estate Agents (NAEA) chief executive Mark Hayward said: “Thousands of home owners across the country are facing escalating ground rents, charges for making alterations to their properties and unable to sell their home.”
A recent survey carried out by NAEA found almost half (45%) of leasehold house owners didn’t know they were only buying the lease until it was too late, two thirds (62%) feel they were mis-sold and the vast majority (94%) regret buying a leasehold.
Hayward continued “It’s only right that the Government looks to crackdown on unfair leasehold practices to stop even more people feeling trapped in homes they cannot afford to continue living in.