BPF response to government plans to ban leaseholds on new build homes

Today, the government has announced its plan to ban leaseholds on new build homes and improve the process for recognising tenants’ associations.

Ian Fletcher, Director of Real Estate Policy, British Property Federation comments:

“We welcome the government’s consultation on unfair leasehold practices. It is important to distinguish between houses and flats, where the use of leasehold in flats is very common, but irregular in new build houses. Traditional freehold owners of leasehold flats have been aghast at the use of leasehold in houses, which is in most cases wholly unnecessary and inappropriate. The motivation seems to have been to raise unreasonable ground rents and, for the sake of home owners, the government is right to clamp down on house builders who have been abusing this form of tenure, and with it their customers.

“The government has also announced improving the process for recognising tenants’ associations. It is something we have long-supported. Tenants’ associations have rights of scrutiny over the running of their buildings, but with buy-to-let and other types of non-resident owner it is often difficult to make contact with the people who would have a vote in such circumstances. Making that process easier has our support. We would also support changing the threshold of votes needed to form a tenant association, from the 60% in current guidance, to a simple majority.”

Kindly shared by BPF