Leasehold houses
The Government has announced several changes to leasehold houses in England, to address matters which have arisen with unfair conditions, rising ground rents and leasehold houses.
These include prohibiting new leases for houses meaning that new-build houses will have to be sold as freehold, apart from shared ownership properties, community-led development, National Trust land and excepted sites on Crown land.
Methods have been introduced to ensure residential freeholders have the same rights as leaseholders on private and mixed tenure estates, such as the right to challenge the fairness of estate rent charges.
Governments new measures.
The Government have proposed new measures to provide a more consistent process when leasehold properties are sold. For example, it should take no more than 15 days to provide leasehold information to a prospective buyer and there is now a maximum fee of £200 + VAT for producing a leasehold property enquiry pack (LPE1) to prospective buyers. Ground Rent should be reduced in future leases to £0 (‘peppercorn’), except for retirement properties, community-led developments and financial lease products such as equity release.
The changes on leasehold houses have been announced in order to prevent freeholder landlords from making a commercial profit from leaseholders. Any costs for the upkeep of a property are intended to be covered in the service charge. The Government proposes that there is no transition period for the banning of the sale of new leases for houses once the legislation is brought into force.
They also will give leaseholders the ability to apply to the First-tier Tribunal for a refund of any incorrectly paid ground rent, at any point. Freeholder landlords will also be subject to a civil penalty of £5,000 per property for illegally charged ground rents, and the Government has indicated they will potentially introduce higher charges for repeat offenders in the future.
For more information on Mortgages go to https://thefinancehouse.co.uk/ and https://www.gov.uk/leasehold-property for more information on leasehold houses.