There has been a recent trend for new houses to be sold off as leasehold properties. This allows the seller to continue to make money throughout the term of the lease by charging for consents or increasing the ground rent.
These practices have been attracted a lot of media coverage this year as some mortgage lenders decided to stop lending to properties which either had a high ground rent from day one or would increase substantially or to an unknown value during the lifetime of the lease.
Now that the Government consultation into 'Tackling unfair practices in the leasehold market' has closed, the Conveyancing Association has outlined their view on when leasehold properties should be used (see the quote below).
As yet, we don't know when the results from the consultation will be published but it will be one of the most awaited announcements as it may be the beginning of another radical shake up of leasehold law. We will keep you updated.
Leasehold should be applicable only where there are genuine shared amenities, and the term of the lease should be 999 years with a peppercorn ground rent, the association says. Administration fees should be based on a reasonable tariff. Leaseholders must have access to a redress scheme.