Tackling unfair practices in the leasehold market

Leasehold House Sales in Sefton 

At the Meeting of the Council on 26th January 2017, the following motion was referred to the Overview and Scrutiny Committee (Regeneration and Skills) for consideration:

"This Council is concerned about the alarming rise in the number of new houses sold as leasehold, the time period of the lease and the details of service charges being levied.

This is against a background of more new build properties being sold as leasehold with duration of the leases averaging 150 years, just three generations. This means that unless the lease is purchased at an unknown sum it will then revert to the owners. Buyers in this situation are purchasing a house but with rental conditions". 

The full text of the Council meeting (Minute 74) can be viewed here

A report outlining the proliferation of leasehold sales was provided to the Overview and Scrutiny Committee (Regeneration and Skills) with information and evidence about leasehold house sales and associated issues at both the national and local level. The full report can be viewed here 

One outcome of the Overview and Scrutiny Committee meeting was to offer “guidance on leasehold sales, including a ‘jargon buster’, to help raise the awareness of the issues of leasehold sales”.

Council officers researched a number of official and unofficial information sources regarding leasehold and freehold housing transactions and concluded that the most appropriate information resource regarding this matter was provided by the Leasehold Advisory Service (LEASE).

LEASE gives free independent legal advice to leaseholders on the law affecting residential leasehold in England and Wales and also includes easy to understand Frequently Asked Questions (FAQs)LEASE is an executive non-departmental public body, sponsored by the Department for Communities and Local Government.

Against a national background of increasing pressures of being able to access and afford appropriate housing the government introduced the Housing White Paper: Fixing Our Broken Housing Market. This document looked at a range of housing issues that the country currently faces and included aims to improve consumer choice and fairness in the leasehold sector.

On the 21st December 2017, the Government published its response to their consultation on ‘Tackling unfair practices in the leasehold market’. This consultation looked at a range of measures to tackle unfair and unreasonable abuses of leasehold; in particular the sale of new leasehold houses and onerous ground rents.

This document provides a summary of responses to the consultation. It also provides the government’s response which includes a range of measures such as introducing legislation to prohibit the development of new build houses; restricting ground rents in newly established leases of houses and flats to a peppercorn (zero financial value); and support for existing leaseholders, such as making buying a freehold or extending a lease easier, faster, fairer and cheaper.

The full consultation response can be viewed here.

Last Updated on Wednesday, January 18, 2023

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