Campaigners in Ellesmere Port have ended the year with action by the Government to crackdown on unfair leaseholds.
Katie Kendrick of the National Leasehold Campaign has welcomed Westminster ‘taking much needed action to address the leasehold scandal that affects millions of hard working families in the town and across England and Wales’.
The campaign describes the announcement as ‘a massive step forward’ but stresses that how it is going to help existing leaseholders remains ‘very vague and unclear’.
Banning houses being sold as leasehold in the future is the right thing to do, it says, ‘but as a direct result of this, the Government is making 1.4m leasehold homeowners further disadvantaged as our homes will be even less desirable and more difficult to sell which will impact on their overall value.”
“The only way out for leaseholders is to purchase our freeholds,” argues Katie. “Whilst the Government has announced they will look at a fairer way for us to do this, there is no time scale.
“Words are simply not enough, we need action and we need it now. Whilst it’s good news that the Government is working with the Law Commission to bring about legislation to help current leaseholders this is years from being implemented and we need help now.”
She continued: “We need a fair and transparent valuation model to calculate the purchase price of freehold and we need that as soon as possible.
“We would also like to see the whole enfranchisement process simplified to allow the purchase of freeholds without the need for expensive legal fees or the need to go to tribunals to argue for the removal of permission fees and unnecessary restrictive covenants.
“The campaign has significant concerns regarding the advertising and marketing of new build ‘freehold’ homes which should be ‘free’ from ‘hold’.
“Yet creeping into the sector is a new tenure the campaign has called ‘fleecehold’ which means the same fee generating permissions and covenants generally associated with leases are built into the purchase of a supposedly freehold home.
“This is not acceptable, and we urge the government to stamp this out immediately. The Government has said new long leases on houses and flats will be set to zero. Again this is welcomed but does not help those already in such properties.”
She concluded: “If leasehold is wrong for the future it has set a precedent that it was wrong in the past and Government must help those of us who are stuck in this abusive web of leasehold and not further disadvantage those that feel they were totally mis-sold their homes.”
Her colleague Jo Darbyshire added: “We will continue campaigning for justice for the thousands caught up in leasehold scandal.”
Ellesmere Port and Neston MP Justin Madders (Lab) told a Commons debate: “We are pleased that the Government have responded so positively to the consultation on ending unfair leasehold practices. It seems they will address many of the concerns raised.
“Many relate to the ongoing situation that leaseholders find themselves in. The proposal for ground rents to be zero in new long leases is welcome but there appears to be nothing to tackle the existing leases with onerous ground rent clauses in them.
“Many are now at the 10th anniversary date, when the ground rent doubles, but it appears from the Government’s response that we cannot expect anything to outlaw that particular scam.
“There also appears to be nothing to deal with the many hidden clauses and charges in leases that come to light only when someone wants to build an extension or even ask a question of their freeholder. Does the minister agree that charging £108 to ask a freeholder a question is indefensible?”
Mr Madders, a member of the all party parliamentary group on the leasehold issue who has presented a private member’s bill, added: “There is a constant stream of cases bringing different arguments to the property tribunal about the fees and costs for lease extensions and purchases.
“Wealthy landlords are refining their arguments in every single case to maximise their income and they inflict further pain on the leaseholder by making them pay for the privilege of having their case tested in the courts. Action cannot come soon enough to end that racket upon a racket.”
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He argued: “Serious questions need to be asked about how the freeholds are passed around from one company to another, sometimes outside this country in tax havens, with secrecy about the ultimate recipients of the substantial income coming from the leases.
“It is clear to me from talking to the many people affected by the scandal that when they bought their houses they thought they were doing just that, buying their home. Let us reform the rotten system without further delay,”
In his comments housing minister Alok Sharma referred to ‘consumers with very onerous ground rent terms who are effectively trapped in their own homes, unable to find a buyer’. “Some of those people have not been able to get redress and do not know where to turn for support,” he said.
“It is clear that the leasehold system as it stands is not working in many consumers’ best interests. Even most developers accept that the use of leasehold for new build houses, unless in exceptional circumstances, is entirely unjustified. This has got to stop.”
He added: “We said earlier this year that we would act and I believe that we have done that so far. We are resolved to reforming leasehold and ultimately to promoting fairness in the system.”
