Leasehold reform – reviews and consultation

Following serious concerns about the operation of the housing market, the Government has initiated a number of reviews.

5 December 2018

The reviews are looking at issues such as:

  • the sale of houses on leasehold terms
  • ground rents that escalate sharply over the course of the lease
  • onerous consent regimes
  • the difficulty and excessive cost of enfranchising and extending leases.

These issues are all closely connected, and the various streams of work need to be seen in association with each other.

We agree that serious abuses have emerged in the housing market in recent years and that Government is right to review the situation urgently, with legislation needed as soon as possible.

One of the consultations sets out how the Government proposes to implement its decision to ban the sale of houses on leasehold terms. We support the proposed ban, subject to exemptions for shared ownership housing, Community Land Trusts, and other cases where leases are essential. We are pleased that the consultation paper accepts the case for these exceptions.

The same consultation also proposes that (subject to suitable exemptions) ground rents should be subject to a strict upper limit so that they no longer allow the extraction of a significant profit from purchasers. We support this proposal, and agree that the suggested limit of £10 per annum will achieve this purpose.