Property developers are ruthlessly hiking the prices on leasehold houses ahead of a Government ban, Telegraph Money can reveal.
The cost of the average new leasehold house rose 12pc over the past year, while the price of houses sold on freehold terms – where owners have greater control and protection – went up by less than 1pc.
Property investment platform British Pearl, which analysed Land Registry data, said housebuilders were taking advantage of first-time buyers and the Help to Buy programme.
The Government is consulting on reforming Britain's archaic property rules, including a crackdown on the sale of new-build leasehold homes.
Investment manager James Newbery said: "Britain’s first-time buyers are already hampered by a chronic lack of housing stock, so for property vultures to take advantage is unforgivable.
"Help To Buy is probably partly to blame, with developers leaping to milk these taxpayer subsidised loans for all they’re worth. They simply jack up the prices of existing stock – knowing buyers facing stiff competition are capable of paying more."
Under property law, a home bought on leasehold terms is actually owned by the freeholder, who wields great power. They collect ground rent, which in some cases increases dramatically over time, and in some cases can obstruct sales.
While almost all flats are sold with leases, most houses in Britain are freehold. However, developers starting selling houses with leases a decade or so ago as a way to boost profits. A year ago the Government promised to ban the sales of such homes, and its proposals are now out for consultation.
The Government estimates that there are more than 4.2 million leasehold properties in England, representing about 18pc of total housing stock.
Mr Newbery said: "It may be years before homeowners realise they were taken for a ride. The Government needs to legislate as a matter of urgency and ban the sale of houses with leases to protect buyers."