Business secretary Sajid Javid (pictured) has announced that he will use the government’s Help to Buy scheme to police the growing problem of properties sold with unfair leasehold terms.

Speaking to housing leaders at the Royal Society of Medicine in London yesterday, he heavily criticised the industry for the terms of agreements it forces some buyers to sign when buying the new breed of ‘leasehold houses’ being built across the UK.

Javid says that although the last thing he wants to do is tie up the industry in “red tape”, he didn’t see how the government could “look the other way” while these “feudal practices” persist.

So Help to Equity Loans will soon only be used to support new-build houses sold on acceptable terms.

“This will send a serious message to the building industry: if you want the government to help you build and sell homes, you have to sell them on fair terms.

“I’m hearing about more and more cases where developers are selling newly-built houses on a leasehold basis for no obvious reason,” he said.

Javid also recounted the story he had been told of a leaseholder “stuck in a house with ground rent that doubles every ten years”, he said. “Starting at £175 in 2009, by 2060 it will be more than £11,000 a year.

“Others shared stories of leaseholders being charged nearly £3,000 by the landlord for the right to extend their home [and some] home owners being told they have first refusal to buy out their lease for 30 times the ground rent, only to discover the freehold has been sold to a third party who won’t give it up for less than 100 times the ground rent.”