Communities secretary says new rules will make extending or buying a freehold easier, cheaper and faster.
In a recent statement, the communities secretary, Sajid Javid, has told the UK's 4.1 million leaseholders that they are set to be freed from “feudal" leasehold practices in the property market; announcing that new rules set to be implemented by the Conservative government will make extending a lease or purchasing a freehold “much easier, faster and cheaper”.
Javid continued by stating that the government would also go ahead with a ban on leaseholds on new-build houses first announced in July, and will force developers to cut controversial ground rents to zero for all new apartments and houses.
Furthermore, he confirmed that the government would write to all developers that have sold homes with “onerous ground rent terms” to ask them to provide “necessary redress”. Housebuilding and general construction powerhouse Taylor Woodrow has set aside £130m to assist leasehold buyers, but other developers have steadfastly refused to pay any form of compensation.
Despite the fact that Scotland has largely abolished the leasehold system, almost one in five of all properties in England - approximately 4.2m homes - are leasehold. A boom in the construction of apartment blocks UK towns and cities, in addition to the increasing amount of property developers profiting from selling houses as leasehold has seen the number of leasehold properties skyrocket in recent years.
With this, many homebuyers have found themselves exploited by their freeholders. Reports of homeowners trapped in spiralling ground rents, sometimes doubling every 5/10 years, are becoming all too common. Recent news stories have seen freeholds sold on to specialist companies demanding huge sums if the homeowner wanted to buy their way out. In extreme cases, homeowners have been left with homes made virtually worthless as banks will no longer lend against them.