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Tackling unfair practices in the leasehold market

Last updated: 19 Sep 2017

Consulting body:
Department for Communities and Local Government
Status:
Closed
Period of consultation:
Runs from 25 July 2017 to 19 September 2017
CML action:
Response submitted

The Department for Communities and Local Government (DCLG) has published a consultation on tackling unfair practices in the leasehold market in England.

Key areas they are consulting on are:

  • limiting the sale of new leasehold houses
  • limiting support for sale of leasehold houses through help to buy equity loan
  • limiting the reservation and increase of ground rents on all new residential leases
  • seeking views on what a reasonable ground rent is, and whether exceptions might apply in certain cases e.g on Right to Buy
  • how government can support existing leaseholders with onerous ground rents
  • Amending the Housing Act 1988 with regard to Ground 8 possession orders
  • improving the ability to challenge service charges for freeholders on a private estate
  • views on other areas of leasehold reform

UK Finance response

We make the following proposals and calls to action:

  • Limit the sale of leasehold houses, to specified exceptions – and those exceptions must include safeguards against onerous lease terms. Steps should be taken, in parallel, to mitigate the impact on existing leasehold houses.
  • Providing key leasehold information about the length of the lease, the ground rent level and review methodology, and other charges, to be provided to prospective buyers, up front and in simple terms; alongside measures to ensure that new residential leases have standard, simple and fair terms.
  • That action is taken to address onerous leasehold terms in existing leasehold properties (whether housesor other property types).
  • Reform the suite of leasehold legislation, ensuring more consistency of leaseholder rights, providing safeguards against excessive ground rents and other charges; and more balanced legislative rights and remedies.
  • That Ground 8 of the Housing Act 1988 is amended so long leases over 21 years with an annual ground rent over £1,000 in London and £250 outside of London cannot be an Assured Tenancy.
  • We support a review of the commonhold tenure.

Read the full UK Finance response to this consultation below.