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Crack down on unfair practices in leasehold

We will crack down on unfair practices in leasehold, such as escalating ground rents.

Our Verdict

Under the leasehold model, buyers enter into an agreement with a landlord which means they are leased ownership of a property for a certain number of years. After that period, ownership of the property returns to the landlord (or freeholder). For some time there have been concerns about the transparency and fairness of selling houses on a leasehold basis, with many purchasers unaware of the precise details of how a lease functions, and ground rent charges, paid to freeholders, sometimes resulting in owners finding themselves unable to sell a property.

When he was Secretary of State for Communities and Local Government, Sajid Javid said of the leasehold system for new build houses:

“I don’t see how we can look the other way while these practically feudal practices persist.”

This policy is a promise to tackle the issue head on.

From July to September 2017 the government ran a consultation on prohibiting the sale of new build leasehold houses, limiting ground rents and protecting leaseholders from possession orders. Its response was published in December 2017, following which it was announced that measures would be introduced to tackle leasehold injustices and end exorbitant ground rents.

The Leasehold Reform Bill 2017-19 is still at the early stages of its progress towards Royal Assent, but it seems likely it will become law. When it does, we will be able to move this promise to crack down on unfair practices in leasehold to ‘done’. Until then, it remains ‘in progress’. Follow this policy to stay up to date.

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