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Welsh Government announces deal with house builders to end leasehold abuse
The Welsh Government has agreed a deal with major house builders to cut down on exploitative leasehold arrangements for new builds.
Developers in Wales will no longer be able to receive Help to Buy cash for new houses sold as leasehold unless they can present a “genuine reason” for retaining the freehold.
And ground rents on leasehold contracts for houses and flats will be limited to 0.1% of the property’s sale value.
Leasehold agreements will also need to run for at least 125 years for flats and 250 years for houses.
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Barratt, Taylor Wimpey, Bellway, Redrow and Persimmon have all agreed to the new criteria.
Smaller builders that receive loans from the Welsh Government’s Property Development Fund will also need to meet the requirements to qualify for Help to Buy.
Ministers have also launched a conveyancing accreditation scheme which will offer advice from registered conveyancers to everyone purchasing a home through Help to Buy.
Rebecca Evans, Welsh housing and regeneration minister, said: “We have acted swiftly to take targeted and tangible action over concerns about leasehold sales on new build homes, and where leasehold is already the tenure, I am setting up a new group to recommend reforms to the system.
“I intend to put in place a voluntary code of practice to underpin these measures, improve standards and to promote best practice.
“This is only the start of my plans to address concerns around leasehold. I have not ruled out the possibility of legislation in the future, which may well be needed to make leasehold, or an alternative to it, fit for the modern housing market.”
Anthony Essien, chief executive of the Leasehold Advisory Service, said: “We look forward to continuing to work with the Welsh and English governments in supporting leaseholders.
“Measures like these are clear evidence of their intent to support leasehold homeowners now and in the future.”
The announcement follows action from English ministers to combat perceived abuse of the leasehold system.
