The leasehold homes scandal is gaining momentum according to a leading campaigner.
Ellesmere Port’s Katie Kendrick was commenting after being invited by Ellesmere Port and Neston MP Justin Madders (Lab) to Westminster to speak at the All Party Parliamentary Group (APPG) on leasehold reform.
Katie is the driving force behind the National Leasehold Campaign Facebook group she set up which already has over 3,400 members.
She understood she was purchasing a leasehold house when she bought in the town back in 2014 and was informed she was legally entitled to purchase her freehold after she had lived in the property for two years. This she fully intended to do.
But house builders Bellway sold her freehold on after 18 months and that saw the cost rising from around £4,000 to £13,350 in less than a year.
She says: “The leasehold scandal is gaining momentum as more and more people are realising that this mess actually affects them. We need to keep the pressure on developers, this needs to be relentless.
“Justin Madders has been amazingly supportive regarding the abuses of leasehold we are facing both locally and nationally. He is determined to stamp out this harsh practice.
“I feel very lucky that we have such a supportive MP that truly appreciates and listens to his constituents.”
Katie explains: “The situation we find ourselves in now as leaseholders is totally unacceptable.
“Many used the Government’s Help to Buy scheme. During the APPG I urged the Government to stop offering help to buy on new build leasehold properties as it further misleads people into thinking they are buying a home when in fact they are simply tenants for the duration of the lease.
“Help to Buy is a massive pull factor when selling houses, remove this and the developers will struggle to sell these houses as leasehold.
“If I knew then what I do now about the web of leasehold I was entering into I would never have bought a leasehold house and put myself and my family in such a vulnerable situation.
“Hindsight is a marvellous thing. This situation thousands find ourselves in isn’t just simply a case of not reading our contracts or leases.
“We were never given all of the information to make an informed decision at the point of sale. We were never informed they were intending to sell our freeholds on to greedy investors and never knew the financial implications of them doing so.
“The people who have the doubling ground rent clauses, these clauses are so deeply embedded in the leases that even legal professionals have failed to spot them. “All these leases are worded carefully to maximise profits for the freeholders. There is absolutely no benefit to the leaseholder whatsoever.
“Once our freeholds are sold on it costs an awful lot of money to buy them back. It is a total rip off.”
Mr Madders told the group: “We have a pretty clear statement from the current Prime Minister there is no good reason for detached or semi-detached dwellings to be sold on a leasehold basis.
“Government has got the message that this is a scandal and it needs to do something about it. I think it is safe to say that there will be something in the Labour manifesto trying to address this problem.
“I’ve referred to this as the PPI of the housing industry and I think that gives an indication of how big an issue this is. The more focus on this will mean the more pressure on the house builders not to go down this road.”
He said he was ‘very pleased’ to have it confirmed that 171 homes in Ellesmere Port which were to be sold leasehold would now be sold freehold.
“Unfortunately we still have Redrow which has permission for 2,000 leasehold houses and which still insists for no reason that I can gather other than it suits their business model to sell them on a leasehold.”
'Rotten practice'
He concluded: “I think this rotten practice has been exposed and we now need to deal with it. I want to see transparency.
“I want to see contrition from everybody who’s been involved in this and I want to see people own their homes in a fair and transparent way.”
Katie added: “There is a lot of new housing developments being built in Ellesmere Port, I just hope they are freehold tenure. I would advise against purchasing a leasehold house to anyone and I would urge anyone tempted to enter into this web of leasehold to reconsider.
“The National Leasehold Campaign will continue to stand united to fight this and we will continue to raise awareness both locally and nationally.
“We are planning several more demonstrations at new build development sites to deter people from falling into the leasehold trap and I totally agree with Justin Madders this is potentially the PPI scandal of the housing industry.”
Taylor Wimpey, which has properties in Ellesmere Port, announced at its AGM it is introducing a £130m scheme to help customers who purchased from them and who still own homes which have a lease with a 10 year doubling ground rent clause. Although the leases are legal they are ‘not consistent with our high standards of customer service’ the company feels. The scheme, which is being offered by the house builder on a voluntary basis to qualifying customers ‘follows a comprehensive review which looked at the concerns raised regarding the saleability and mortgageability of these properties and included detailed discussions with the current freeholders, lenders and third party experts,’ according to the company. The move will help customers convert their existing doubling leases to an alternative arrangement ‘incorporating materially less expensive ground rent review terms’. “We are of the view that this measure will also allay the concerns that some of our customers have around the saleability or mortgageability of their homes due to the doubling leases,” says the housebuilder. It is working with the organisations that own the freeholds of the majority of the properties with these leases ‘and these discussions are proceeding well’. The company adds that whilst it is not legally obliged to take any action with regard to doubling leases it recognises they leases have caused concern. “We want to help our customers and we are committed to helping to resolve this,” it says. |
Mr Madders has welcomed the decision by the company to apologise to leaseholders facing doubling ground rents and to set aside £130m in compensation.
However while he has described the decision as ‘a significant victory’ for the campaign against unfair leasehold practices he has also warned developers that the ‘battle for justice is far from over’.
The MP has expressed concerns the statement indicates it is only those who bought direct from Taylor Wimpey who will be helped.
Mr Madders commented: “This is a significant victory as it establishes clearly an important principle which is that the developers rather than the purchasers are at fault and that as such the purchasers need to be compensated.
“What is now needed is for all developers to immediately stop selling houses on a leasehold basis and to recognise their responsibilities to the thousands of people who are disadvantaged. We also need to see any ground rent increases immediately frozen until this takes place.
“The battle for justice is far from being over but I am more hopeful than ever than our campaign will be successful.”
