By Ben Kerrigan-
Communities Secretary Rt Hon James Brokenshire MP has launched a consultation on plans to improve the leaseholder sector for would-be home owners. The plans are expected to bring an end to the unjustified selling of new houses as leasehold.
The consultation also proposes new ground rents for new leases to be capped at just £10. On average leaseholders pay over £300 ground rent each year, with some paying as much as £700.These charges are excessive and amount to exploitation on a grand scale.
These measures are also designed to build upon comprehensive action by the government to make the housing market fairer for everyone.
Under the new rules, landlords will be required to provide contact information of eligible leaseholders to the secretary of the residents’ association within 4 months of the request. This provision assumes that leaseholders have expressly consented to their details being shared. The move is expected to help leaseholders act together to represent common interests and raise complaints with their landlords and agents for things such as service charges and management practices.
Included in the plans are a crack down on rogue landlords so tenants have the quality of home they deserve. Under the plans, existing leaseholders who want to buy their freehold by working with the Law Society, can do so. This will make this process faster, fairer and cheaper, and ensuring tenants are not hit by unfair rental costs.
The Rt Hon James Brokenshire MP, Secretary of State for Communities, said:
”The government is committed to making the economy work for everyone by helping people with the cost of living.
Unfair ground rents can turn a homeowner’s dream into a nightmare by hitting them in the back pocket, and making their property harder to sell.
That’s why I’m taking concrete action to protect homeowners and end those unscrupulous leasehold practices that can cost tenants hundreds of pounds.
While leasehold generally applies to flats with shared spaces, a number of developers have been increasingly selling houses on these terms – placing further financial burdens on those looking to buy a house of their own through unnecessary surcharges like ground rent.
This can also mean selling their home is more expensive and take longer than selling a freehold property.
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.
The consultation will also seek views on what are the appropriate and fair exemptions, such as shared ownership properties and community led housing to ensure consumers’ best interests are at the heart of the property market.
To further support leaseholders, ministers have also made it easier for them to form recognized tenant associations by reducing the minimum membership required. This will further empower those in leasehold homes to enforce their collective rights and hold landlords to account”.