Plans revealed to end leaseholds on new properties in England
Landlords in England who invest in brand new properties could soon see the end of some of the most frustrating, and perpetually rising, costs they face, as the government unveils new plans to end leaseholds on newly built homes across the country.
The plans, which apply to England only, would see leaseholds on new homes completely banned, would also look to reduce ground rents considerably. At the moment, rising ground rent prices can be one of the biggest problems landlords face, especially as the cost can be an entirely unexpected one for newer operatives in the sector.
In many cases under the current rules, ground rent charges can double every decade. This represents not just a costly outgoing that needs to be paid by investors, but also makes it almost impossible to sell homes if the cost of ground rent is too high.
Communities secretary Sajid Javid, who unveiled the new plans set to face public consultation, said: "Enough is enough. These practices are unjust, unnecessary and need to stop."
He said that at present, 1.2 million homes across England alone are subject to leasehold terms. He continued, saying the rapidly rising cost of ground rents for these properties represents a "broken housing market".
Many people who live in, or own, leasehold properties, will never face any problems with the system. This is because most leaseholds will last multiple decades, and, as such, never really interfere with how people buy and sell their homes.
The problem comes, however, when there are shorter leaseholds on homes, where sellers can struggle to find a buyer, particularly if the remaining lease is less than 70 years.
"Builders and developers should be seeing what they can do to right some of the wrongs of the past," Mr Javid told the BBC's Today programme.