Back in October last year, we described it as a potential new PPI-type scandal – the mis-selling of restrictive and punitive leasehold conditions on many homes. And this is despite the fact of plans to ban the sale of leaseholds on new-build homes – as we reported as long ago as July 2017.
The government now seems to be taking positive action to address the scandal with an announcement on the 27th of June that any newly-built home must be sold freehold (unless there are exceptional circumstances) – all leasehold sales of such properties are to be axed.
Designed to put “fairness at the heart of the housing market” the measures include:
- ground rents on punitive leasehold contracts will be reduced to zero;
- unnecessary leaseholds to be banned; and
- the Help to Buy scheme no longer being available to support purchases of new leasehold homes.
Those with existing leases who need information about their leasehold contracts in order to sell their home also gain the right to demand a faster response – at minimum cost – from their respective freeholders or agents.
In a bid to encourage higher standards in the construction of new homes and to address further problems that might arise in the contracts of sale, the government also published in June a detailed consultation document on the appointment of a New Homes Ombudsman through whom buyers of New Homes may seek redress for problems with the quality of the build and unfair sales contract terms.
The consultation period has started and is scheduled to last until the 22nd of August 2019.