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The UK government has confirmed that it will pass legislation to outlaw the sale of new-build leasehold homes (except in the case of shared ownership) following a consultation that yielded 6,000 responses.

The decision follows increasing criticism of the leasehold system in England, described by Secretary Sajid Javid as displaying ‘unfair and abusive practices’ which ‘exploited’ home buyers. Mr Javid said that the new measures will ‘help create a system that actually works for consumers’.

The measures will also allow existing leaseholders to buy their freehold more easily and cheaply and will set ground rents on new long leases for both houses and flats at zero.

The Law Commission is also being asked to ensure that it supports those wishing to extend their lease or purchase their freehold by making the process easier, faster and cheaper including a review to evaluate if the current offer is fit for purpose.

The outlawing of the sale of new-build leasehold homes will not apply to circumstances where a leasehold is required e.g. houses with shared services (flats etc.) or those built on land with specific restrictions, but will apply in all other circumstances.

For more information about leasehold and freehold house purchases and sales, or any other aspect of buying or selling a house, contact a member of our Residential Conveyancing team.

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