NEW plans have been proposed by government that would see the banning of leasehold sales of new-build houses.

But what is a leasehold and why should you care?

I’ll admit, I had no idea what it meant, which was met with a few laughs and eye rolls at my expense.

So, what it basically means is that in some cases of buying a house you might own the house, but you don’t own the land beneath it - which you are effectively renting.

Leasehold terms vary, ranging typically from 99 years to 999 years, meaning if you’re planning on leaving your house to future generations, someone down the family line isn’t going to be too pleased if the developer tries to take the land back (which your house is now rudely occupying).

The principle of leaseholds is often applied when buying flats, as sharing the land ownership between various different flat occupants can get confusing and financially difficult.

And that isn’t the only problem, since you don’t actually own the land, you pay a leaseholder fee (ie you’re renting the land). These fees might be low at the beginning of the lease, but are subject to increases as years go by.

Homebuyers can face exorbitant costs and properties can be rendered unsellable because of leasehold fees, but plans put forward by the communities secretary, Sajid Javid, aim to put a stop to “unjust” and “unnecessary” practices.

Sajid Javid wants to restrict ground rents to zero and prohibit future houses being sold as leasehold in England after a rise in developers selling houses under terms which usually apply to flats, particularly in the North West.

The proposals, which are subject to an eight-week consultation, aim to make future leases fairer by reducing ground rents so they “relate to real costs incurred”.

The plans include measures to close legal loopholes to protect leaseholders who can be left vulnerable to possession orders, as well as changing the rules on Help to Buy equity loans so they can only be used for “new-built houses on acceptable terms”.

Mr Javid said: “It’s clear that far too many new houses are being built and sold as leaseholds, exploiting home buyers with unfair agreements and spiralling ground rents.

“Enough is enough. These practices are unjust, unnecessary and need to stop.

“Our proposed changes will help make sure leasehold works in the best interests of homebuyers now and in the future.”

Sir Peter Bottomley, co-chair of the all-party parliamentary group on leasehold reform, welcomed the crackdown but said action should be taken to help those with unfair existing leases.

The Conservative MP said: “Having control and hopefully abolition of unjustified and unnecessary fees, which would apply to existing leasehold as well as future ones, then I would argue that if not covered by existing law, there should be action taken by Parliament so that unfair existing terms or existing leases can be struck out as unreasonable.”

Sir Peter, who said responsible freeholders had “nothing to fear” from the proposals, added: “It sounds as though the Government is going beyond what was in any party’s manifesto - this will be welcomed by everyone concerned for the wellbeing and welfare of leaseholders and there are more steps needed to make the dispute system work fairly and at very low cost.”

But government opposition said that the Labour Party has been telling the Conservative government for the last year that expensive ground rents are unjust and unfair.

Labour’s shadow housing secretary John Healey said: “The Government has known about and ignored the ground rents scandal for a long time, allowing hard-working families to be ripped off under costly leasehold agreements.

“Labour has said for the last year that using leasehold to sell homes is unfair and unjustifiable. And at the election we said we’d end the routine use of leasehold ownership for all new homes and cap charges on ‘ground rents’ to stop the scam.”

More than four million people live in leasehold properties in England - around a quarter of which were leasehold houses, according to the Department for Communities and Local Government.

However, one estate agent in Taunton says that the issue isn’t a problem in the South West, as the ‘phenomenon’ has been seen or used across Somerset and elsewhere in the West Country.

Michael Dukes, head of residential sales for Greenslade Taylor Hunt, said: “The question of leasehold new properties has been in the press recently as the community secretary, Sajid Javid, is looking to ban such tenure in the market place.

“The first thing to say is that this will only apply to new houses/bungalows and not apartments, as such leasehold tenure is both extremely common and also required as far as finance is concerned to ensure group observation of covenants.

“The more recent problems have revolved around what would normally be freehold houses and bungalows being sold on a very long leasehold arrangement with retained ground rents, which have proven to be a useful additional income stream for developers.

“Although this is a phenomenon that has not been seen within the West Country, nevertheless it is a matter that I think should rightly reach Government attention as the prospect of not having a determined future for your own home is not one that can be easily relished.

“Leasehold ownership within the capital is relatively common where there are large landed estates, The Grosvenor Estate, The Crown Estate being two examples, but outside of London, such a phenomenon is very unusual and the ‘creeping ivy effect’ should be nipped in the bud if possible.

“The issue is not so much one of usage of the property but more surrounding the ground rent issue which, while reasonably low at the beginning - normally around £250-£750pa - is subject to review and nasty shocks might arise further down the line when it comes to review in perhaps 20 or 25 years’ time.

“Anything that is likely to give cause to eyebrows being raised by a prospective buyer cannot be healthy as there will be plenty of other choices available to them and they will simply choose those instead meaning that the leasehold property will be marked down on its value.

“I suspect that such Parliamentary support for the proposal will be wide spread and a bill will be passed.”