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  1. ITV Report

Plans to ban 'unjust' leaseholds on new-build houses

Leaseholds on new-build houses could be banned outright under proposals to stamp out abuses of the system.

Sajid Javid slammed exorbitant leaseholds costs facing home-buyers, which sometimes render properties unsellable, as "unjust".

The Communities Secretary wants to restrict ground rents to zero and prohibit future houses being sold as leasehold in England following a rise in developers selling houses under terms which usually apply to flats.

Mr Javid's proposals, which are subject to an eight-week consultation, aim to make future leases fairer by reducing ground rents so they "relate to real costs incurred".

The plans include measures to close legal loopholes to protect leaseholders who can be left vulnerable to possession orders, as well as changing the rules on Help to Buy equity loans so they can only be used for "new built houses on acceptable terms".

Sajid Javid described exorbitant leasehold fees as 'unjust'. Credit: PA

Mr Javid said: "It's clear that far too many new houses are being built and sold as leaseholds, exploiting home buyers with unfair agreements and spiralling ground rents.

"Enough is enough. These practices are unjust, unnecessary and need to stop.

"Our proposed changes will help make sure leasehold works in the best interests of homebuyers now and in the future."

More than four million people live in leasehold properties in England - around a quarter of which were leasehold houses, according to the Department for Communities and Local Government.

They have a legal right to occupy and use the property for a set period, typically from 99 to 999 years, with certain conditions set out in the lease.

Leaseholders pay fees to the freeholder who retains legal ownership of the ground on which the leaseholder's home is built.