new build houses

CHANGES TO LEASEHOLD HOUSES AND A NEW HOMES OMBUDSMAN

The Government has announced that plans are now in place to abolish leaseholds on new-build houses sold in England, with the date for these plans yet to be confirmed. A New Homes Ombudsman is also going to be created for the UK to tackle problems faced by new-build owners.

What will this mean for new-build houses in the future?

Although the Government hasn’t confirmed when these plans will come into place, the following rules and regulations have been announced relating to new build houses in the future:

  • All new build houses will be sold as a freehold.
  • Anyone sold a leasehold house by mistake can buy the freehold at no extra cost.
  • Help To Buy won’t be available on leasehold houses.
  • The Ground Rents (Leasehold Properties) Bill has been put forward, to put a maximum amount on what ground rent is paid by those who currently own a house with a leasehold.
  • Property developers are to be liable for the legal costs of current leaseholders, who wish to change their contract to sell their house, meaning homeowners might not have to pay any legal fees involved.
  • Freeholders and managing agents of leasehold houses will have 15 working days to give leaseholders the information they need to sell their house.
    • This information can also only be charged for a max. fee of £200.

The New Homes Ombudsman will be created to hold housing developers to account for any issues that come up on new build homes, meaning you can get compensation for any major issues with your property, like incomplete work or faulty fittings.

Benefits of the New Homes Ombudsman will hopefully include:

  • Builders pay compensation for defective properties.
  • Builders sign up to a code of conduct in order to be part of the Help to Buy scheme, meaning they will have to follow strict rules if they want to sell more houses.
  • A redress scheme for homeowners who have complaints regarding their property, so you have the chance to get compensation.

You can help decide how the New Homes Ombudsman will work by responding to the Government’s consultation here.

Leaseholds will still exist when buying flats and there is no change to this.

Why has all this happened?

A minority of housebuilders have been accused of unfairness due to trapping homeowners in leasehold contracts or building properties that aren’t up to scratch, leaving homeowners with long snag lists and waits to have their property repaired.

We here at Propertymark have actively campaigned to prevent leasehold contracts that take advantage of homeowners and for an ombudsman scheme that allows homeowners to have access to compensation.

When are these new schemes coming into effect?

Currently, no date has been announced for the schemes to come into effect, but the consultation for the New Homes Ombudsman closes on 22 August 2019.

Propertymark is committed to keeping consumers aware of all major issues which affect their house buying or selling process. Our website is continuously updated when any legislation is changed which affect consumers.

If you want to know more about leaseholds, then read our handy guide.

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