Issue 17May 2018

News Roundup

Jump in new houses sold as leasehold ahead of ban

The number of properties sold under leasehold agreements soared last year ahead of a government crackdown on unfair ground rent increases. According to Land Registry data by the Office for National Statistics, 15.6% of new-build houses were sold as leaseholds (excluding flats and maisonettes) which is an increase of 6.2% since 2013. In many cases, ground rents have doubled; in order to combat this the government are planning to announce a ban on leaseholds for almost all new-build houses and crack down on outdated practices.


Flats and maisonettes are traditionally far more likely to be sold as leaseholds rather than freeholds. This is due to the fact that the owner of the block in which the flats are located often provides communal services to residents and remains responsible for some of the upkeep.

A number of large housebuilders have been accused of punitive leasehold 

terms, including Taylor Wimpey, which slashed bonuses for its senior directors by 25% after the problems emerged. Persimmon has also said it will increase its freehold sales and Bellway and Redrow have been caught up in the leasehold row.

Sebastian O'Kelly, a trustee of the Leasehold Knowledge Partnership charity said: "There's been a disgraceful exponential growth in the sale of new leasehold properties in recent years. "Housebuilders have cheated their former customers by selling them tenancies that provide a considerable income for the anonymous speculators who own the freehold. There's no excuse for selling houses under leasehold agreements except to rip people off."

The figures show that London has seen the biggest rise in new-build leasehold houses for any region in England and Wales since 2012. In the year to September 2012, 8% of transactions for such properties were leasehold, compared with 21.1% in the year to September 2017.