HOUSE-builders will be banned from charging rip-off ground rents under a Government drive to cut family living costs.

Most new homes will be sold freehold, saving buyers up to £700 a year.

Communities Secretary James Brokenshire will this week announce plans to cap ground rent at a tenner.

The limit will make it uneconomical for leaseholders to collect the fee and encourage selling new homes freehold.

It is the latest measure to bring down the cost of home-owning and help young families on to the housing ladder.

On average, people who buy a house leasehold pay more than £300 a year in ground rent on top of their mortgage — with the worst hit having to pay £700.

Mr Brokenshire said: “Unfair ground rents can turn a homeowner’s dream into a nightmare by hitting them in the pocket and making properties harder to sell.

“That’s why I’m taking concrete action to end unscrupulous leasehold practices.”

The Government’s plans will be put out for consultation. Nearly one in five of all properties in England are leasehold.

This is due partly to the rise of apartment building in cities, but also because developers are selling more houses on these terms.