Most newbuild homes will in future be sold as freehold, while leases will be capped at £10.
The new measures are part of a government clampdown on unfair practices in the housing market.
Communities Secretary James Brokenshire has launched a consultation on plans to improve the leaseholder sector, which will bring an end to the unjustified selling of new houses as leasehold.
On average, leaseholders pay over £300 ground rent each year, with some paying as much as £700. In future, ground rents for new leases will be limited to just £10
Mr 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.”
While leasehold generally applies to flats with shared spaces, several developers have been increasingly selling houses on these terms – placing further financial burdens on those looking to buy a house of their own through unnecessary surcharges like ground rent.
This can also mean selling their home is more expensive and take longer than selling a freehold property.
To further support leaseholders, ministers have also made it easier for them to form recognised tenant associations by reducing the minimum membership required. This will further empower those in leasehold homes to enforce their collective rights and hold landlords to account.
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