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Government consults on the abolition of leasehold for new build houses

25 July 2017

Today the government publishes its consultation – ‘Tackling unfair practices in the leasehold market’ – seeking views on, amongst other things, its proposals to end the use of leasehold tenure for new build houses.

The prompt for action comes from a host of examples where leaseholders of houses have seen actual and forecasted hyper-escalations in the ground rents of their houses. Alongside this, leasehold houses fall outside of the Right of First Refusal, and it has meant that whole estates of leasehold houses have been sold by developers to third party landlords without reference to the house owners.

The consultation follows a commitment made first in the Housing White Paper and more recently in the Queen’s Speech to:

“consult and look to take action to promote transparency and fairness for leaseholders. We will look at the sale of leasehold houses and onerous ground rents, working with property developers, the Competition and Markets Authority and others as outlined in the Housing White Paper.”

The government also seeks views on:

  1. Possible changes to the Help to Buy scheme in relation to leasehold houses; and
  2. Providing freeholders on private estates with equivalent rights to leaseholders to challenge unreasonable service charges for the upkeep of communal areas and facilities via the First-tier Tribunal (Property Chamber).
  3. Limiting the starting value and increase of ground rents on all new residential leases over 21 years.
  4. Updating Ground 8 of the Housing Act 1988 so long leases over 21 years with an annual ground rent over £1,000 in London and £250 outside of London cannot be an Assured Tenancy.
  5. Areas for future leasehold reform.

The consultation closes on 19 September 2017 and responses can be submitted through an online survey.

Alternatively you can email your response to the questions in this consultation to: [email protected]

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LEASE is governed by a board, appointed as individuals by the Secretary of State for the Ministry of Housing, Communities & Local Government.