GROUND rents will be banned for new-build leasehold homes saving owners from spiralling costs.
Plans were revealed in the Queen’s Speech today, where Her Majesty announced a range of government plans to help homeowners and buyers.
The Queen’s Speech marks the official opening of Parliament and sets out the government’s agenda for the next 12 months.
Measures to end the practice of ground rents for new leasehold properties will be put into law.
The Queen’s Speech also laid out further plans to tackle housing issues, including:
- Stronger rights for renters
- Modernisation of the planning system
- Greater building safety regulations
New rules will effectively “set future ground rents to zero” in England and Wales.
A leasehold is where a homeowner buys the right to live in the property for a number of years, but doesn’t actually own the land the property sits on.
Owners of homes that are leasehold pay a ground rent to the landowner, known as the freeholder.
There is no limit on the amount freeholders can charge in ground rent.
Many leaseholders of new build homes have been caught out by ground rents that quickly jump in costs, sometimes by thousands of pounds.
Some clauses even state that the ground rent can double every decade.
Such clauses have prevented some owners from selling up and mortgage lenders refusing to lend on these properties.
One couple who bought a brand new flat for £117,000 from Taylor Wimpey in 2009 didn’t know they had a doubling ground rent clause.
