Sharp increase in number of UK properties sold under leasehold agreements in 2017

Sharp increase in number of UK properties sold under leasehold agreements in 2017

New figures from the Office for National Statistics (ONS) suggest that the number of leasehold homes sold in the UK rose significantly last year ahead of the Government’s ban on new-build leasehold properties.

According to the data, as many as 15.6 per cent of all new-build properties purchased by homebuyers and investors in 2017 were sold under leasehold agreements – up from just 9.4 per cent five years ago.

The news comes not long after the Government unveiled plans to ban the sale of new-build properties under such agreements in an attempt to crackdown on the issue of ‘unfair’ ground rent increases.

In many cases, unsuspecting homebuyers had found themselves struggling to pay escalating ground rents, which were increasing substantially every few years, it said.

Up-to-date research suggests that the average annual ground rent in the UK is £371 but, in some cases, these costs were known to double – or even triple – once a set period had passed, previous reports have revealed.

Experts have said that the sharp increase in leasehold sales throughout 2017 could be in part due to developers’ efforts to overload these properties ahead of the leasehold reforms.

The new rules also see that all ground rents on new ‘long leases’ in England are set to zero – a rule which will apply to both houses and flats.