Mortgages.scot

It was around 4 years ago the Government promised action to end leaseholds on newly built properties in England and Wales. Since then there has been a lot of talk without action. Here we are again being told that the King's Speech coming soon will include proposals to start the process.

Michael Gove had committed to abolishing the leasehold system earlier this year but it was suggested he was defeated in that effort by his own party.

Before there is any cheering, the proposals are limited, certainly a watered-down version of Gove's promised abolition of the leasehold system. Still welcome though.

Leasehold Proposal

The main points that are being proposed are

-All new houses are to be sold as Freehold.
-Removal of the requirement to have lived in a property for two years before negotiating a lease extension.
-Amending the standard lease extension term from 90 years to 990 years.
-Limit ground rent on existing leasehold properties to a peppercorn rate1.

Of course, this does mean that leasehold on flats will remain. But with a couple of benefits as noted above.

Really not the best outcome given the promises of the past, but let's take something over nothing at this point!

Many are still being let down

What these proposals don't do is help existing leaseholders. Many are still locked into rising service charges, ground rents and fees being charged by companies that exist to hold freeholds and their only purpose is to profit from the leaseholders.