The Building Societies Association and housing charity Shelter have backed the Government decision to consult on banning the sale of new build properties on leasehold contracts.
Earlier today the Department for Communities and Local Government announced an eight-week consultation on plans to crack down on the practice.
Last November it emerged that some property developers had been selling new-build houses on a leasehold basis with very expensive ground rents.
Some of the contracts saw ground rents double every 10 years.
Building Societies Association policy adviser Sarah Wilde says: “This action by Government is very welcome. In addition to banning onerous conditions like escalating ground rents in the future, we want to see action for those already in leasehold homes where the terms could be considered onerous.
“This is also a great opportunity to simplify the way that leasehold terms are written. Right now they can be very convoluted and difficult to understand. We look forward to contributing to this consultation.”
Shelter has also backed the Government decision.
Shelter director of communications policy and campaigns Anne Baxendale says: “Our housebuilding system is failing families all over the country, many of whom are being stuck with ever increasing charges on expensive, and often second-rate, new homes.
“While the leasehold system can help make sure new homes are properly serviced, it’s clear it has been massively abused by developers who are using this to get something for nothing. Ground rent charges should be transparent and fair, and it’s vital that families hit by unjust charges are compensated.”