Government should go further on ground rents, say agents

Propertymark has said that the government’s ban on ground rent on new leasehold properties should go further.

The government revealed over the weekend that the ban - in England and Wales - will come into force on June 30 and will apply to new builds. 

Timothy Douglas, policy and campaigns manager for Propertymark, wants it to go further and says: “These unfair and restrictive charges levied on leasehold homeowners have in some cases been allowed to become a cash-cow and abolishing them has been a long time coming.

“Propertymark has been a strong campaigner on this issue and it was our investigation n 2018 that helped bring the scale of it to light for the first time, revealing the impact it was having on the housing market as leasehold homeowners struggled to improve or sell their properties as a result.

“These changes only legally restrict ground rents on new leases, so we hope they are a catalyst for further reform by the housebuilding sector itself and the UK Government that will release the estimated over one million existing homeowners who remain locked into these agreements.

“Agents should be ready to understand the implications and the material information they need to provide to consumers when these properties come on the market from June 30 onwards.”

Propertymark’s study in 2018 involved 1,100 leaseholders including landlords, and revealed that 62 per cent of respondents felt they were mis-sold their leasehold property, and 93 per cent said they wouldn’t purchase another leasehold property.

Some 57 per cent didn’t understand what being a ‘leaseholder’ meant until they had already purchased the property while 48 per cent were unaware of the escalating ground rent until it was too late.

The agency trade body says around 1.4 million homeowners in England own their houses through a leasehold.