Labour plans to ban leaseholds on new-build homes
Although Brexit may still be dominating the headlines this summer, the Advantage team, who are experts in structural defects warranty, has noticed that both of the major parties have still been finding the time to tell voters how they’d tackle the issue of housing.
Most recently, the Guardian reported that Labour is promising to end the ‘feudal system’ in an overhaul of property ownership rules in England.
Jessica Elgot, the Guardian’s chief political correspondent, wrote that: Labour has set out plans to ban the sale of new private leasehold houses and flats in an overhaul of property ownership rules that could slash the costs for homeowners of buying their freeholds.
The shadow housing secretary, John Healey, said the proposals would end exploitative practices by freeholds, “from rip-off ground rents, to punitive fees to onerous contract conditions stating what they can and can’t do to their own homes”.
The government has already announced it will axe leaseholds on all new-build houses, though it is not clear when the measures will formally take effect. However, the Labour policy also proposes a ban on the sale of new leasehold flats by the end of the Labour government’s first term, a substantially larger number of homes.
It also says leaseholders should be able to buy the freehold of their home for 1% of the property value, which could substantially lower the costs. However, owners of current leasehold flats are likely to need to band together to buy the freehold of the block.
Housing Today reported that Healey had also referred to leaseholds as a “symbol of a broken housing system.”
The publication stated: Labour also called for a public inquiry into leasehold misselling, which it said had resulted in thousands of properties sold with “extortionate terms such as doubling ground rents, making them unsellable”.
Housebuilders have been criticised for selling on leases to investment firms which ramp up ground rents.
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