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Posted on 26th July 2017

Ban on leaseholds for new builds, will this resolve high charges?

With increasing media interest surrounding leaseholds on new properties, extortionate ground rents and other charges have led to proposals for change.

The accelerated trend for new-build houses being sold as leaseholds means that some developers, once the properties have been built, have then sold the freeholds to investment companies, which in turn has led to any agreed charges being reviewed and extensively increased by the new freehold owners.

In response to media interest and highly publicised cases, the Department for Communities and Local Government have now intervened stating that some of the terms in the leases ‘were becoming increasingly onerous’ and have proposed a public consultation to reduce ground rents to a ‘real costs incurred method’. This could stop future developers and investment companies exploiting these additional charges within leaseholds on new build properties in England, however it does not assist existing leasehold owners.

It has been highlighted that there are 1.2 million cases of leasehold properties with high additional charges, leading to what was described as a ‘broken housing market’. This in turn affects future sales, with existing owners trying to seek remedy and redress with the house builders, or solicitors, if the increased charges were not highlighted to prospective buyers prior to exchange of contract.

With the consultation being proposed to last for eight weeks, unrest still lies where leasehold properties exists.

Respond to the ‘Tackling unfair practices in the leasehold market’ public consultation online.

For further advice on your property contact our our residential property team.

Published by

Sara Smith


T: 01622 680401

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