Shares in UK housebuilders fell on Thursday after the government banned the sale of new homes on a leasehold basis, starting immediately.
The government said new ground rents would be set at zero as it aimed to end "feudal practices" in Britain's residential construction industry.
Leaseholds are traditionally applied to flats and apartment blocks where the upkeep of shared spaces is maintained by the building's leaseholder, who charges residents a "ground rent" to pay for this maintenance.
Single-occupier ground rent
But more recently, some housebuilders have applied such charges to new, single-occupier builds for the permission to make changes to the property. It is this practice that the government aims to stop with the new rules.
Sajid Javid, communities secretary, said: "It's unacceptable for home buyers to be exploited through unnecessary leaseholds, unjustifiable charges and onerous ground rent terms."
McCarthy & Stone tumbles
The government estimates that about 1.4 million households across England are on leaseholds, up from 1.2 million in 2015.