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Sajid Javid launches crackdown on 'feudal practices' in housing market that exploit homebuyers

"It's unacceptable for home buyers to be exploited through unnecessary leaseholds, unjustifiable charges and onerous ground rent terms." Credit: PA

The government is to crackdown on "feudal" practices in the housing market, including unnecessary leaseholds, unjustifiable charges and onerous ground rent terms.

Communities Secretary Sajid Javid said it was unacceptable for home buyers to be exploited as he announced a ban on the sale of new build leasehold homes except where they are necessary, for example for shared ownership.

Ground rents will also be set at zero for new long leases on houses and flats, while the Government will work with the Law Commission to support existing leaseholders and make it easier, faster and cheaper to buy a freehold or extend a lease.

The measures follow the Housing White Paper and a Government consultation on unfair practices in the leasehold sector.

"It's unacceptable for home buyers to be exploited through unnecessary leaseholds, unjustifiable charges and onerous ground rent terms," Javid said.

"It's clear from the overwhelming response from the public that real action is needed to end these feudal practices. That's why the measures this Government is now putting in place will help create a system that actually works for consumers."

The measures will apply to 1.4 million homes in England and come as leasehold sales rapidly grow.

Leasehold generally applies to flats in shared buildings to make multiple ownership straightforward, but developers have been increasingly selling houses on these terms, adding costs to "over-stretched" home buyers, the Department for Communities and Local Government said.

The minister also announced a wider internal review of support and advice for leaseholders, including raising awareness on how to get redress for grievances.

Freeholders will also be given equivalent rights to leaseholders to challenge unfair service charges.

Shadow housing secretary John Healey said: "The Government is now backing Labour's proposals to end the routine building of new leasehold houses and crack down on escalating ground rents.

"However, ministers must do more to help home-owners in existing leasehold houses and flats who have insufficient protection against exploitative freeholders and their agents."