BUILDERS are set to be banned by the government from selling houses as leaseholds in England and ground rents on flats could be cut to zero following widespread outrage over exploitative contracts.

In a blow for major housebuilders such as Taylor Wimpey and Persimmon, the communities secretary, Sajid Javid, set out plans to ‘ban new-build houses being sold as leasehold as well as restricting ground rents to as low as zero.’

Flats can be continued to be sold as leasehold, but ground rents will be restricted to a ‘peppercorn’ level and therefore be of little financial value to speculative buyers. The ban is expected to come into force after a short eight-week consultation period.

Householders of Stonemere Drive, Radcliffe, were sold leasehold homes by housebuilding company Taylor Wimpey between 2007 and 2010.

Along with thousands of others who bought from the housebuilder between 2007 and 2011, they became locked into a leasehold contract under which the ground rent doubled every 10 years.

The contracts saddled many buyers with a huge financial burden, leaving their homes ‘almost unsellable’, they believe.

Jo Darbyshire, whose Taylor Wimpey-built house has a clause in which the ground rent doubles every 10 years and is part of a National Leasehold Campaign group, said the ban was ‘fabulous news.’

She said: “I’m delighted to say that all our hard work campaigning against the leasehold scandal is starting to pay off.

“This is an amazing step forwards and now we just need help to sort out the mess for existing leaseholders.”

Peter Hardman, who owns a home in Stonemere Drive, agreed but said this may not help current leaseholders. He said: “Whilst I have read the proposed changes to the onerous practice regarding ground rent, unfortunately it only seems to cover new-builds and offers no tangible alteration to existing leases.”

Sebastian O’Kelly, whose Leasehold Knowledge Partnership has been the sharpest critic of the practice, said: “Leasehold houses are an absolute racket and in short, housebuilders have been cheating customers."