The retirement sector will no longer be exempt from zero ground rents on new builds.
Retirement developers have slammed government’s recent leasehold reforms which will see ground rents on all new retirement properties reduced to zero.
Long-awaited changes to leasehold law were recently unveiled which will allow leaseholders in England to extend their leases by up to 990 years at zero ground rent.
As part of the announcement, ministers reversed a previous decision to exempt retirement properties from a promise to reduce ground rents on most need leasehold homes to zero.
The government said the move will protect older people from “uncertain and rip-off practices”.
But John Tonkiss, chief executive of retirement housing giant McCarthy & Stone, said the market had been “caught in the crossfire of leasehold reform which was intended to address bad practices elsewhere in the housebuilding industry”.
Under existing leasehold law, ground rents must be paid annually by leaseholders to freeholders who can increase fees at their discretion without providing extra benefit to leaseholders.