Onerous Leasehold Terms to be Banned

February 26, 2018

Onerous Leasehold Terms to be Banned

Following an outcry over the terms that apply to the purchase of new leasehold properties in some circumstances, the Government conducted a public consultation. This has now reported and legislation is expected soon to deal with the abuses identified.

Many unfair practices were reported as the sale of new properties on a leasehold, rather than freehold, basis has proliferated and some of the leases contain onerous terms that apply in the long run. Describing the practices as 'practically feudal and entirely unjustifiable', the Secretary of State for Communities and Local Government decided to end them 'once and for all'.

Legislation will be brought forward as soon as possible to put a stop to the sale of leaseholds over new-build houses or existing freehold houses, except in exceptional circumstances.

In addition, the ground rents on newly established leases of houses and flats will be set at zero and the Government is looking at ways owners of leasehold properties with escalating ground rents can be protected and have the right to acquire the freehold.