The government will outlaw the sale of new-build houses as leasehold, a form of ownership that has saddled thousands of homeowners with extortionate fees and, in the worst cases, unsellable properties.

All new houses will be sold on a freehold basis and ground rents on new leases will be reduced to zero, the Ministry of Housing, Communities and Local Government announced on Thursday.

“We have long recognised that we have a responsibility to confront unfairness in the leasehold market,” James Brokenshire, the communities secretary, said.

“We will legislate to ensure that in the future – save for the most exceptional circumstances – all new houses will be sold on a freehold basis. We are committed to taking bold action to reform the sector and will be pressing ahead as soon as parliamentary time allows.”

Consumer groups and others have warned for years that buyers of leasehold houses and flats have been ripped off on a large scale.

The ‘pod homes’ that sit on stilts above car parks designed to crack the housing crisis Show all 7 1 /7 The ‘pod homes’ that sit on stilts above car parks designed to crack the housing crisis The ‘pod homes’ that sit on stilts above car parks designed to crack the housing crisis Zed Pod A ZED Pod is a small, low cost energy efficient starter home intended for housing young people within city boundaries over existing areas of parking or garages. This avoids having to purchase land to create affordable homes. zedfactory The ‘pod homes’ that sit on stilts above car parks designed to crack the housing crisis Who is ZED POD for? The occupancy will vary depending on the location of the ZED Pods. The Pods flexible nature allows them to serve as short term accommodation, such as for holiday makers, as well as in a long term scenario for young professionals, or single people wishing to get on to the property ladder in an affordable manner. zedfactory The ‘pod homes’ that sit on stilts above car parks designed to crack the housing crisis Terraced-Pod By minimising the demand for energy and water, and placing a translucent waterproof solar canopy over the space between the homes, it is possible to provide zero energy bills for the these homes as well as providing zero emissions electricity to charge points integrated in the parking spaces zedfactory The ‘pod homes’ that sit on stilts above car parks designed to crack the housing crisis The tiny homes could sell for between £50,000 to £60,000 or rented as one bed homes for young couples for around £750 month with around £50 bills on top, according to the architect’s estimates.The development costs are reduced as there is no need for land acquisition. zedfactory The ‘pod homes’ that sit on stilts above car parks designed to crack the housing crisis Shanghai POD - Shanghai Art & Design Exhibition Further benefits extend to the prefabricated nature of the pod, which significantly increases speed of construction without effecting the durability of the pod. A typical Pod community can be erected and commissioned in under a month, and within a week on sensitive sites. zedfactory The ‘pod homes’ that sit on stilts above car parks designed to crack the housing crisis Shanghai POD - Shanghai Art & Design Exhibition The eco-friendly houses, around 74 square feet of floor space, would be complete with solar panel roofs, water recycling systems and electric vehicle charging. zedfactory The ‘pod homes’ that sit on stilts above car parks designed to crack the housing crisis Communal space under the canopy “It is cheap to live in, gives young people privacy, has good shared communal spaces, has good access to public transport and saves key workers from long commutes into city centres with high property values,” Bill Dunster OBE told the Independent zedfactory

Leaseholders are granted the right to live in their property for an agreed period – usually between 99 and 125 years.

Under the lease, the freeholder typically charges ground rent to the leaseholder. Charges can also be levied for making alterations to a leasehold house. A significant number of leaseholders say they have been hit with unjustifiable rises to the ground rent or unfair charges for making minor cosmetic changes such as changing a doorbell.

Owners of leasehold flats have complained about high service charges and a lack of transparency over what they are being charged for, as well as excessive administration fees.

In the most extreme cases, charges have been so high that leasehold houses and flats have become difficult to sell.

The housing ministry also said it will act to stop freeholders and managing agents taking “as long as they want and charging what they want” to provide leaseholders with the information they need to sell their home: a new time limit of 15 working days will be introduced and fees will be capped at £200.

Apart from this measure, the government did not announce any other plans to act on abuses affecting the owners of existing leasehold properties. Neither did ministers mention any plans to ban the sale of leasehold flats in new-build blocks.