Oct

Labour plans to end ‘rip-off’ leasehold ownership with sales ban on new homes

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Leasehold Sales:

Labour has said it
will bid to ban the sale of leasehold homes and “crack down” on
the controversial practice if it wins power. The Labour Party has
set-out its plans for a “leasehold revolution” to tackle
“rip-off” ground rents, contract terms and fees faced by millions
of households.

Properties sold as
leaseholds see occupiers buy the right to live in the homes for a
fixed period of time, most typically 60 to 120 years, while the
landlords, known as the freeholders, often charge the leaseholders a
rising annul ‘ground rent’. Occupants are also tied in to make
payments to contractors for the properties’ upkeep, with
alterations and sub-letting incurring further charges.

Ministers have been
accused of ‘kicking the can down the road’ on the leasehold
crackdown issue, but Conservative ministers have also vowed to end
‘feudal’ system of leasehold house sales in the modern era.

According to a
Labour Party report, six in ten leaseholders don’t fully understand
what being a leaseholder means until they have already purchased the
home, and nine out of ten regretted buying their leasehold
properties.

Shadow Housing
Secretary John Healey has said:

“Leasehold is a
symbol of our broken housing system, with millions of England’s
homeowners feeling like they’ve bought their home but still don’t
own it.

“The scale of the
problems faced by leaseholders, from rip-off ground rents to punitive
fees to onerous contract conditions stating what they can and can’t
do to their own homes, demands wholesale change.

“We need a
revolution in rights for leaseholders.

“This consultation
document sets out the next Labour government’s ambition end the
broken leasehold model for good.”

Under Labour’s
plans, the sale of leasehold flats and houses will be a thing of the
past by the end of its first term in office, and occupants
(leaseholders) will be able to buy the freehold of their homes for 1%
of the property’s value.

The party says it
wants to increase leaseholders’ rights, to empower them to
challenge unfair fees and poor repairs service.

Meanwhile the
Government has also vowed to curb the modern leasehold sales
practices, committing to ensure that new homes will be sold on a
freehold basis and to reduce ground rents to ‘peppercorn’ rates
on future properties.

However, Labour has
accused the government of lack of progress on the issue and says that
there is still no sign of change for home-buyers who have become
locked into unfair leasehold contracts, and there are still no plans
for the new legislation needed to release them.

View Full Article: Labour plans to end ‘rip-off’ leasehold ownership with sales ban on new homes