The industry has welcomed the Government confirmation earlier today that leaseholds on new build homes will be banned.
Following a consultation, communities secretary Sajid Javid announced that the ‘unfair and abusive’ practices in the system would be cut.
UK Finance director of mortgages Paul Smee says: “We support the DCLG’s efforts to address the onerous and potentially unfair issues surrounding the leasehold system.
“Lenders will continue to work with Government and other interested parties to address the complexities associated with leasehold properties, particularly where valuation is concerned.”
Great Marlborough Estates co founder Grant Lipton says: “The new measures to cut out unfair and abusive practices within the leasehold system are long overdue. Leaseholds have their place in the market, but what doesn’t have a place is duping people and ripping them off. The proposed changes will curb landlords pushing tenants into unfair ground rents.”
“Ultimately what we need is more transparency at every stage of the house buying process, where consumers are fully aware of their rights and their advisers fulfill their responsibilities.”
Meanwhile, Nationwide director for products and propositions, Chris Rhodes called on lenders to review their criteria in leasehold borrowing.
“We welcome the Government’s positive measures in addressing onerous leasehold terms and escalating ground rents. We hope this encourages providers to review their lending criteria in this area and also guide homebuilders on future developments.
“Today’s announcement gives further momentum to this important issue.”