The move, intended to tackle unfair leasehold practices, will also see new leases capped at £10.
Nearly all new-build houses will be sold as freehold under new Government proposals designed to stamp out unscrupulous leasehold practices.
Communities secretary James Brokenshire said the consultation aims to bring to an end the “unjustified selling of new houses as leasehold”.
The Government also plans to cap ground rents on new leases at £10. On average, leaseholders pay more than £300 in ground rent each year – with some forking out as much as £700. The consultation will also seek view on what are appropriate and fair exemptions, such as shared ownership properties.
Why is this happening?
Leaseholds – the legal right to live in a building for a set period of time – usually applies to flats. But a number of developers and housebuilders have been selling houses on leasehold terms too.
It’s left thousands of homeowners across the country facing escalating ground rents, charges for making alterations to their properties and unable to sell their home, according to NAEA Propertymark.
Brokenshire said: “Unfair ground rents can turn a homeowner’s dream into a nightmare by hitting them in the back pocket, and making their property harder to sell.
“That’s why I’m taking concrete action to protect homeowners and end those unscrupulous leasehold practices that can cost tenants hundreds of pounds.”