The government is consulting on plans to combat leasehold abuse, including a crackdown on rogue landlords.

The majority of new-build houses would be sold as freehold under proposals being put out for consultation on Monday by the housing ministry. Ground rents for new leases would be capped at the nominal sum of £10, down from the current average of £300.

The new proposals are aimed at improving the sector for would-be homeowners and ending the unfair selling of new houses as leasehold.

In December 2017 the government put a stop to the sale of new leasehold houses in England. Reforms include protecting leaseholders by making it easier for them to form recognised tenant associations through a reduction in the minimum membership required.

The move is intended to help leaseholders act together to represent common interests and raise complaints with their landlords over issues such as service charges and management practices.

James Brokenshire, the housing secretary, said: “Unfair ground rents can turn a homeowner’s dream into a nightmare by hitting them in the back pocket and making their property harder to sell.”

Proposals include clamping down on rogue landlords so tenants have the quality of home they deserve; helping existing leaseholders who want to buy their freehold by working with the Law Society to improve the process; and ensuring tenants are not hit by unfair rental costs.

While leasehold generally applies to flats with shared spaces, a number of developers have been increasingly selling houses on these terms. This places a heavier financial burden on prospective homeowners through unnecessary surcharges such as ground rent.

It can also mean selling their home is more expensive and will take longer than selling a freehold property.

The consultation will seek views on the appropriate exemptions, such as shared ownership properties and community-led housing. It will run for six weeks and is open to all, including leaseholders, freeholders, landlords, solicitors, conveyancers, management companies, developers, local authorities, estate agents, investors and lenders.

According to government figures there were 4.2m residential leasehold properties in England in 2015-16, of which around two-thirds were flats.

A first consultation between July and September 2017 received more than 6,000 replies, with the vast majority in favour of widespread reform.



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