October 29, 2023, 2:50 p.m. | Updated: October 29, 2023, 2:52 p.m

All new homes will be sold as freehold under Michael Gove’s plans. Image: Alamy

All new homes in England and Wales will be sold as freehold as part of government reforms to end the “feudal” tenancy system.

The government’s aim is to “give true home ownership back” to buyers. This policy is due to be presented in the King’s Speech next month.

The reform, led by Housing Secretary Michael Gove, will see all new homes sold with the land on which they were built, unless there are exceptional circumstances.

Under the reforms, new homes can still be sold as leasehold properties, meaning buyers own the property for a period of time, usually over 100 years, but not the land underneath.

If you are a tenant rather than a freeholder, you are not responsible for maintaining your building, but maintenance fees and other freeholder fees may apply.

Read more: Tenancy system needs major reform as property owners claim it is ‘inducing them to loot’

Read more: The housing minister hints at reforms in the coming weeks as she insists the government has not abandoned its promise on home ownership

Michael Gove. Image: Getty

Many have said they feel trapped by the exorbitant costs to shareholders, which are often not transparent.

Ministers are also seeking to cap all ground rents on existing leasehold properties at a very low “peppercorn” rate and move the standard lease extension from 90 to 990 years, the Times reported.

The government has already abolished ground rent for new leasehold properties.

But Labor described the proposed changes as “thin mush” and pointed out that the government had announced plans to ban rental homes in its 2019 election manifesto.

Mr Gove has been vocal in the past in favor of abolishing the “feudal” tenancy system. He told the Sunday Times: “I don’t think leases are fair in any way.

New houses in Chepstow, Wales. Image: Alamy

“It is an outdated feudal system that needs to go. And we need to move to a better system and free people from it.”

But the plans were scrapped in May this year after a row between him and Rishi Sunak.

Now an agreement has been reached and Housing Minister Rachel McLean confirmed on Sunday that leasehold reform will take place in the King’s Speech on November 7.

“Plans to abolish tenancy and restore true home ownership were confirmed today as part of the King’s Speech,” she said.

“We will give millions of people back real home ownership and end the reign of rip-offs and incompetent profit-hungry management companies.”

“The government is running out of time”: CEO of Leasehold Knowledge on the need for leasehold reform

But Matthew Pennycook, Labour’s shadow minister for housing and planning, said: “The Tories announced four years ago that they would scrap leasehold rights for all new homes.”

“If all we get is this thin gruel in the King’s Speech, the tenants will have been let down.

“A Labor government will fundamentally and comprehensively reform the leasehold system.”

Tenants are being “plundered” by building managers.

A spokesperson for the Department of Leveling, Housing and Communities said: “We have already made significant improvements to leaseholds – ground rent will be removed from most new residential tenancies and we will make it easier and cheaper for leaseholders to extend their lease or their freehold to buy.” .

“The Secretary of State has made it clear that we will bring forward legislation to protect leaseholders as quickly as possible.

“This will give them more information about their service fees and ensure they are not incurring unwarranted legal costs.”

Source : www.lbc.co.uk

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