An end to leaseholds?
The latest figures show that 21% of private housing in England is owned by leaseholders but this is likely to change drastically with new plans. Over the last year, the issue of leaseholds has become a huge news item and finally the Government is planning to intervene.
In February, the BBC reported on the story and showed that on a new-build home one buyer was quoted between £2,000 and £4,000 to buy the freehold after two years. But, after an investment company bought the freeholds, that price went up to £13,300.
It’s clear that this doesn’t work for the UK housing market and now the Communities Secretary Sajid Javid has said has had his say. He said:
Enough is enough. These practices are unjust, unnecessary and need to stop.
According to research, there are more than one million houses on leasehold across the UK, and this is another factor in a housing market that needs revamping. As we can see below, this has been increasing over recent years.
Will leaseholds soon be banned?
The plan now is to crackdown on this, which would see the practice of selling leaseholds outlawed and ground rents on current properties in this bracket cut.
Some homeowners have told of their problems selling a property that is on leasehold and three cited examples include:
- A homeowner being charged £1,500 by the freeholding company to make a small change to their family home
- A family home which is now impossible to sell because the ground rent is expected to hit £10,000 a year by 2060
- A homeowner who was told buying the lease would cost £2,000 but the bill came to £40,000
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