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Government announces New Homes Ombudsman, zero ground rent for new leases and freehold only for new build houses

June, 2019

In a speech to the Chartered Institute of Housing conference in Manchester today, the Communities Secretary, James Brokenshire MP announced that in future all new-build houses will be sold as freehold to tackle unfair leasehold practices and prevent future home-owners from being trapped in exploitative arrangements. This follows the Government’s consultation, in October 2018, on the implementation of reforms to leasehold.

Where buyers are incorrectly sold a leasehold home – saddling them with a property that could ultimately prove difficult to sell – they will be able to get their freehold outright at no extra cost.

Homes England has been instructed to renegotiate Help to Buy contracts to explicitly rule out the selling of new leasehold houses, other than in exceptional circumstances, to protect new home buyers from unscrupulous charges.

In future ground rents for all new leases will be zero ; and to make the home buying and selling process cheaper and quicker the Government will limit freeholders and managing agents to 15 working days and a maximum fee of £200 to provide leaseholders with the crucial information they need to sell their home.

Government took the opportunity today to also launch a consultation on redress for purchasers of new build homes and the New Homes Ombudsman. This seeks views on the detail of the proposed legislation and how a new homes ombudsman can be delivered and will run until August 22. They are also exploring the options to appoint a New Homes Ombudsman in shadow form – someone to work closely with industry, consumer groups and government to ensure improvements and standards are delivered quickly and help shape the future scheme.

Communities Secretary Rt Hon James Brokenshire said:

“We have long recognised that we have a responsibility to confront unfairness in the leasehold market. Last year we consulted on proposals including the leasehold house ban and ground rent reduction.

“Today I can confirm we will go ahead with our original plan to reduce ground rents on future leases to zero, as opposed to a cap of £10 per year.

“And we will legislate to ensure that in the future – save for the most exceptional circumstances – all new houses will be sold on a freehold basis.

“We are committed to taking bold action to reform the sector and will be pressing ahead as soon as parliamentary time allows – helping us delivery our promise to make the home buying and selling process quicker, cheaper and easier.”

LEASE’s interim Chair, Wanda Goldwag, said:

“This afternoon’s announcements, including the promise of dedicated redress for new build purchasers in future, are tremendous steps in addressing the poor practices and unfairness that have affected ordinary people and their homes. We look forward to seeing these changes, supporting them and informing the consultation on redress and the New Homes Ombudsman”.

Further information

New Homes Ombudsman consultation:

If you are responding in writing, the Ministry of Housing, Communities & Local Government ask that you make it clear which questions you are responding to.

Written responses should be sent to: New Homes Ombudsman Consultation, Ministry of Housing, Communities and Local Government, Housing Diversification, 3rd Floor Fry Building, 2 Marsham Street, London, SW1P 4DF

LEASE is governed by a board, appointed as individuals by the Secretary of State for the Department for Levelling Up, Housing & Communities.