Government to crackdown on leaseholds for new-build houses

The government this weekend has announced almost all new build homes in the future will have to be sold as freehold and ground rents will be capped at £10 per year.

The announcement said that leaseholders are currently paying on average over £300 ground rent annually, with some paying as much as £700.

There was no suggestion for an immediate change for current homeowners, implying that some recent homeowners could still find their properties difficult to sell. Ground rents are turning a homeowners dream into a nightmare as finding a potential buyer is becoming increasingly challenging.

Leasehold has more generally applied to flats with shared spaces. Reports suggest a number of developers have been selling houses on these terms- placing further financial burden on those looking to buy a house of their own. This has meant it has become more expensive and takes longer to sell the house compared to freehold properties.

The government proposes the majority of new houses will be sold as freehold and future ground rents will be reduced to a nominal sum.

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