Sajid Javid vows to end 'feudal' leasehold house sales

Posted On: 
21st December 2017

Sajid Javid has pledged to end the scandal of "exploitative" leasehold contracts.

Sajid Javid has vowed to ban leasehold contracts on new homes
PA Images

The Communities Secretary said the practice of charging unsuspecting homeowners extortionate ground rents will be banned.

He branded the contracts - which have escalating charges hidden in the small print - “feudal” and said they amounted to “legalised extortion”.     

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The move will ban leasehold clauses on almost all new homes and set ground rents on all new leases at zero.

Selling homes on a leasehold basis has traditionally been associated with flats, as the ground underneath the property is shared.

However, over the past few years developers have increasingly sold new homes under leasehold and profited from hiking ground rents.

Four million flats and houses in England are currently owned on a leasehold basis.

Mr Javid said: “It’s unacceptable for home buyers to be exploited through unnecessary leaseholds, unjustifiable charges and onerous ground rent terms.

“It’s clear from the overwhelming response from the public that real action is needed to end these feudal practices.

“That’s why the measures this Government is now putting in place will help create a system that actually works for consumers.”

Labour’s John Healey welcomed the news but also called for tougher measures to give some redress for home-owners already tied into exploitative leasehold contracts.

The Shadow Housing Secretary said: “The Government is now backing Labour’s proposals to end the routine building of new leasehold houses and crack down on escalating ground rents.

“However, Ministers must do more to help home-owners in existing leasehold houses and flats who have insufficient protection against exploitative freeholders and their agents.”