New government funding schemes will no longer be able to use the money for new leasehold houses, in a continuing push to tackle abusive practices within the leasehold system.
The move was announced by Communities Secretary, the Rt Hon James Brokenshire MP, as he outlined the government’s next steps towards delivering both the homes the country needs.
The release of £450 million to speed up delivery of homes on sites of surplus public sector land and encouraging pace and modern methods of construction as a part of the building process.
The Rt Hon James Brokenshire MP, Secretary of State for Communities, said, “The leasehold market has been a particular concern to me. Buying a home is the biggest financial investment any of us will be lucky enough to make. Getting the keys to your home is a real moment of pride.
“But abusive practices in the leasehold market – unexpected costs that rise every year and bear no relation to services – can turn a homeowner’s dream into a nightmare.
Unjust and unfair leasehold terms also risk making relatively new houses unattractive to buyers.
“Enough is enough. We’ve already said we’re banning the unjustified use of leaseholds on new homes and we will bring forward legislation at the earliest opportunity. And for flats, in future, ground rents for long leases will be limited to a peppercorn.”
“I can confirm we will go a step further. Any new government funding scheme will contain the condition that the money cannot support the unjustified use of leasehold for new houses. We want to build more homes, yes, but not at any cost. This will bring real change – an essential step to restore pride and dignity to homeowners everywhere.”
The government is already working to make it cheaper and easier for existing leaseholders to buy-out their freehold and improve information available about redress for those consumers who face the most onerous terms.
Changes will also be made so that ground rents on new long leases – for both houses and flats – are set to zero.