22/12/2017
Cutting out ‘unfair and abusive’ leasehold practices (E)
A ban on the sale of new-build leasehold houses, unless there are exceptional circumstances such as the houses being built on land with special restrictions or having shared services, heads a package of measures promised by the government to tackle unfair and abusive practices in the rapidly expanding leasehold market.
While leasehold makes multiple ownership of flats with shared spaces more straightforward, developers have also been increasingly selling houses on leasehold. The government estimates that there were 4.2 million residential leasehold dwellings in England in 2015/16, of which 1.4 million were leasehold houses – an increase of 200,000 compared with the previous year.
The current state of the market is revealed by the response to ‘Tackling Abuses of Leasehold (E)’, (CPA News, 28 July 2017), a consultation that generated 6,000 responses, the vast majority expressing concerns about the experiences of buying and living in a leasehold property.
‘Tackling unfair practices in the leasehold market’, which summarises the exceptionally high consultation feedback, sets out the government responses and provides further details of the measures that it plans to introduce, which include
- legislating to prevent the sale of new-build leasehold houses unless there are exceptional circumstances
- making certain that ground rents on new long leases – for both houses and flats – are set at zero
- working with the Law Commission to support existing leaseholders and make the process of purchasing a freehold or extending a lease much easier, faster and cheaper
- providing leaseholders with clear support on the various routes to redress available to them
- conducting a wider internal review of the support and advice to leaseholders to make sure it is fit for purpose in this new legislative and regulatory environment
- making sure freeholders have equivalent rights to leaseholders to challenge unfair service charges
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