Government announces protection for buyers of new homes
The Secretary of Ministry of Housing, Communities and Local Government has announced that all new build housing will need to be sold as a freehold property.
Following a speech at the Chartered Institute of Housing Conference on 27 June 2019, James Brokenshire confirmed an immediate action to ban Help to Buy developers selling leasehold houses. Homes England will now renegotiate all Help to Buy contracts ‘to explicitly rule out the selling of new leasehold houses, other than in exceptional circumstances' in a decision designed to protect new home buyers from unscrupulous leasehold charges.
Mr Brokenshire also confirmed that pernicious ground rents on new leases would be reduced to zero to prevent leaseholders from being charged excessive fees without receiving any benefit.
The planned changes also aim to speed up the leasehold buying process; in future, freeholders will be capped on the time they can take and the amount they can charge for vital information regarding a leasehold contract. Freeholders will also have a maximum of 15 working days to send this information and will not be permitted to charge more than £200 for the service.
All leaseholders who were incorrectly sold a leasehold property will now be able to get their freehold title outright at no extra cost.
A recent survey by the National Leasehold Campaign found that 72% of those who have encountered leasehold problems are very anxious and worried for the future. Although the new changes do little to help existing leaseholders, they will benefit “buyers of new, leasehold properties.
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