Developers are going to be banned from selling houses leasehold on land they own, according to the Daily Mail yesterday.
It reported: Government sources said officials are looking at ending the use of leasehold for new developments of houses as well as setting a minimum lease length for new flats, ‘offering leaseholders greater security and saving them money over the long term’.
Communities Secretary Sajid Javid has already announced plans to clamp down on the sale of leasehold homes under the Government’s Help to Buy mortgage scheme.
More than 10,000 new leasehold houses have been sold through Help To Buy since it was launched four years ago.
It included nearly 5,000 last year alone, or one in seven of the houses in the taxpayer-funded project.
A report by the Department for Communities and Local Government (DCLG) said that one in five private homes in England – four million in total – are leasehold.
While 2.8million of these are flats, which have traditionally been leasehold, there are now 1.2million houses that have leases, including 167,000 detached homes.
A DCLG spokesman last night said a consultation on ending leaseholds for new houses has been launched.
“We will announce more details shortly,” he said.
“It’s unacceptable that homebuyers are being exploited with unfair charges and unfavourable ground rent agreements. We will take action to tackle all unfair and unreasonable abuses of leasehold.”
The newspaper quoted Paula Higgins, of the HomeOwners Alliance campaign group, saying: ‘Leasehold is a ticking time bomb and millions of householders are in a precarious position.
‘The leasehold system too often turns the dream of homeownership into a nightmare.’
The Leasehold Knowledge Partnership campaign group estimates, the Mail reported, building firms make £300million to £500million a year from the sale of ground rent agreements to investors.
Related posts:
Daily Mail turns up the heat on ‘fat cat’ housebuilder bosses
Daily Mail on leasehold houses and doubling ground rent scandals
‘Cameron’s brother-in-law Will Astor and the toxic leasehold scandal’, Daily Mail
Daily Mail ‘reveals’ Will Astor’s ‘links to leasehold rip-offs’
Leasehold ‘a lucrative way to stop people from buying their own home outright’ – Daily Mail
‘Cameron’s brother-in-law Will Astor and the toxic leasehold scandal’, Daily Mail
What about leasehold flats being OUTLAWED?
It was what was started down at the Lands Tribunal which has now migrated over to Leasehold Houses. The cartels who are responsible are the ones who need to be jumped on here. How about looking at closing the Co’s in question by going after their liability insurance on the grounds of wrongful trading? Can this be done?
Why aren’t the leasehold flat’s OUTLAWED?
Yet the flats rip-offs have been going on for hundreds of years? Could this be a class issue?
Are we the holders of the flat leases lower class?
It’s a shame that there have to be a different Law between the house and flats Leases.
WHY?
Surely the antiquated Leasehold should be abolished completely and replaced by commonhold!
It is snobbery, however if they get rid of the Leasehold Houses farce 1st then it’s a start. With any luck this will create a ripple in the pond effect.
Skipper, Mystified, leasehold flats and leasehold house are two separate issues.
Except in extenuating circumstances, houses do not have to be leasehold, they can be freehold, no problem.
It is no where near such a simple thing to do with flat blocks.
Mystified, why do you suggest you are lower class, when, for example, some flats cost over half a million pounds and more
Today there is no reason and /or excuse for Leasehold Flats/Hses for residential purposes. Leasehold has changed in that today it is based around Commercial Tenancies not Residential. This is what is used and abused. Only here in England and Wales do we still have this antiquated Feudal system.
Trevor,
As far as I am concern Lease is a Lease regardless of the type of property and price. In both cases the same rip off mentality and practises apply. No difference at all. Only that the flat leaseholders have been ripped off for a very long time!
The flats too do not have to be leaseholds. The commonhold is the way forward as it is in the most of the countries all over the world. Not a business model to make money out of the ordinary people who just wish to own their home, property.
I don’t suggest that I personally or any other Leaseholder are second class citizen, but the way the Leaseholders are treated to me it should not be acceptable in the 21st Century.
Unfortunately the class system is still well and alive.
I agree- the law actually still treats modern leaseholders like 18th c farmer tenants in the service of the landed aristocracy. Terms like ‘owner occupiers’ are meaningless and the various changes in the law to allow ‘consultations’ with the freeholder/managing agent have no teeth, they are worse than useless, because they are misleading.. I fell for that and spend a ,out of money trying to improve things with no real result
As I stated, leasehold flats and leasehold houses are separate issues.
At a minimum, the way forward for flats is commonhold, but the way forward for houses is freehold.
Except in extenuating circumstances there is no need whatsoever for a house to be leasehold
Whatever the nae ascribed to the system of ownership, put simply save in very rare circumstances where a house is built on freehold land, there is no excuse for that house to be sold as a leasehold purchase.
Let no one be left in any doubt that in the case of leasehold houses, a lease has been created with the sole purpose of creating an artificial value to the developer freeholder.
Leasehold flats are different in the sense that clearly a structure needs to be in place charged with managing the entire block and associated grounds.
That does not mean that leaseholders should not own a share of the freehold and take joint responsibility for maintenance
Nor does it mean they should be subjected to huge ground rent demands, huge fees for seeking permissions and extending leases etc?
Why should off shore companies pay 5% of the capital value of a flat be allowed to profit from the leaseholders who invest 95% of the capital value in their property?
As existing flat “owner” I worry being left with unsellable lease if law only changes for new leases and makes them longer. Why would anyone buy an old lease?
Law needs to do something for existing victims of rip offs in leasehold. Make peppercorn extensions really compulsory at clear prices without all the cynical loopholes would be a good start.