U.K. Curbs Ground Rents on Leasehold Properties to Help Owners
(Bloomberg) -- The U.K. government will give 4.5 million people the ability to cancel fees known as ground rents on homes they had bought for a fixed time period, after complaints of soaring costs charged by firms.
Anyone who has bought their property for a specific duration, known as a leasehold, will be able to extend their lease for 990 years at zero ground rent, an annual fee to the owner of the land which the property is on, Housing Secretary Robert Jenrick said in a statement on Thursday.
Reforming the leasehold system has been a priority for Jenrick’s department, and in September four of the U.K.’s biggest homebuilders were named in an investigation by the Competition and Markets Authority over selling properties on “potentially unfair terms concerning ground rents.”
The government also announced that retirement leasehold properties, built specifically for older people, will have ground rents restricted to zero for new leases.
“We want to reinforce the security that home ownership brings,” Jenrick said. “These reforms provide fairness for 4.5 million leaseholders and chart a course to a new system altogether.”
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