Sajid Javid has threatened to clamp down on the ‘feudal’ racket of housebuilders building leasehold homes with onerous ground rents.
The Secretary of State at DCLG is planning to use the Help To Buy scheme as leverage, which LKP has been urging since October when it began the campaign against leasehold houses.
Of course, plenty of leasehold flats also have appalling lease terms – not highlighted by the developer-recommended conveyancing solicitors.
Mr Javid said:
‘The last thing I want to do is tie the industry up in more red tape at a time when supply is already so far short of demand.
‘But as a Government committed to building a fairer society, I don’t see how we can look the other way while these practically feudal practices persist.
‘So I will look to ensure Help to Buy equity loans are only used to support new build houses on acceptable terms.’
Mr Javid said he had heard ‘all kinds of horror stories’, including homeowners told they could buy their lease for 30 times the ground rent, ‘only to discover the freehold has been sold to a third party who won’t give it up for less than 100 times the ground rent’.
Related posts:
Sajid Javid does not like regulation. What about micro management like Help To Buy?
Labour MP Helen Hayes ‘disappointed’ by Sajid Javid’s response on leasehold scandal
Sajid Javid vows to ‘stamp out abuses’ over leasehold that make homes unsellable
Has Brokenshire trashed Sajid Javid’s reforms of leasehold?
Sajid Javid has thought about leasehold property management and does not like what he sees …
LKP helps cut Hyde Group £600 ground rent demand to £50
What may I ask is the fate awaiting those that purchase leasehold houses not using the Help To Buy Scheme? Are they to be given any protection?
It is an outrage that the government is wasting tax payers money with ‘help to buy ‘ scheme, in reality they are just enriching the freeholders. This is no help to buy, it’s help to rent and the position of leaseholders and freeholders really needs to clarified.
The law needs to be changed, It should not be left down to the ‘benevolence’ of the freeholder, to decide how much to rip off the leaseholders- what sort of democracy is this? Do we make our own laws or not?
Well, that could be easily fixed by the government introducing legislation stopping, except in the known extenuating circumstances, the building of any leasehold houses, only freehold allowed.
Also there is no reason why the building societies/mortgage lenders, who are their own bosses, could not change their terms overnight, and exclude mortgages or any lending on leasehold houses
This will be a token gesture to prevent the Help to Buy Scheme trapping any further victims..
I doubt the Government will do anything for the thousands of leaseholders already entrapped by the Scheme or for those other victims who have not used it.
They will have to either rely on the “generosity” of the Developers who instigated these leases, or suing the Solicitors who either colluded with it or ignored it.
If all that fails then it is one hard slog through the Courts.
Very expensive, causing much anxiety and most unfair.
To celebrate Brexit and St Georges Day, on the 23 April the Government and TW will be announcing a joint £100m compensation package to assist the Ground Rent Doublers and the RPI’s
Mr Redfern of TW has just announced that he will be giving all his lolly to charidee!! Oh, and he is going to to wear sack cloth and ashes whilst devoting the rest of his life to jolly good works.. What a guy????
There is an article on their internet website by the BBC News at this minute, “Better Off Cashing In On Help To Buy”.
The use of taxpayers money has, and still is, a total disgrace. Some of the points in the article read,
Just over half of the people who have received taxpayers’ money to help them buy a home under a government scheme did not need it, according to research.
About 4,000 households in England earning more than £100,000 annually are in the Help to Buy Equity Loan scheme.
Official figures to December 2016 show more than 20,000 households who are not first-time buyers have been helped.
The initiative, which started in April 2013, aims to make buying a home more affordable.
But research conducted for the government found 57% of those who signed up to it said they could have afforded to buy without access to the scheme.
Help to Buy was launched by then Chancellor George Osborne to attempt to encourage more housebuilding.
The government offers a 20% equity loan to buyers of newly-built properties and 40% in London, on properties worth up to £600,000.
The buyers have to put down a 5% deposit and, when the property is sold, the government reclaims its loan.
This means if the value of the home goes up, the government will make a profit.
Similar schemes were set up and have now ended in Scotland and Wales.
I totally agree. Having seen some of the 5 bedroom properties bought with the ‘ Help to buy’ scheme, I do do wonder if the recepients of taxpayers cash were in fact worthy of our help. I believed that it was first Time buyers/ ‘ Starter homes’ that were being helped…. perhaps purchasers complaining of ground rent etc are now reaping what they have sown!! They may have to just suck it up.
Hi Kim, yes, I always thought the HTBS was for “Only For First Time Buyers”.
Makes you wonder eh, government “managing” taxpayers money.
That BBC News page “invited” comments so have just fired an A4 page off to BBC.
Trevor, please update when / if you receive a reply from the BBC………
Kim,
I certainly will update on any contact I receive
Help to buy was also available for those looking to move up the property ladder too.
You may not agree with this but this is how the help to buy scheme was set up.
It enabled people to move up the ladder and free smaller houses for first time buyers looking to get on the ladder.
Let’s not attack people for using the help to buy. For whatever reason they used it they were obviously entitled to it at the time.
On the governments HTBS website it has some FAQs. One of them is –
Who provides the Government’s contribution for Help to Buy?
The answer given is –
The equity loan is provided by the Homes and Communities Agency.
What it should say is –
The loan is provided by using Taxpayers Money
(the government do not have any money, never have done, never will)
Dear Leaseholder, I am certainly not ‘Attacking HTB purchasers. They were indeed ‘entitled to it at the time”- as were the developers ‘entitled’ too flog off the freeholds to spivs!! We are all entitled to our opinion and I have given mine.
Leaseholder, I am not attacking anyone for using the scheme, but how it is been allowed by the government for it to be used to purchase a lease, not a house.
You are also wrong when you say “It enabled people to move up the ladder and free smaller houses for first time buyers looking to get on the ladder”.
Under the terms of HTBS it has to be used for a newly built property so if someone has moved out as you suggest, a first time buyer could not use the HTBS to get that second hand property
Hi Trevor
I totally agree the help to buy should not be allowed to be used on leasehold houses as u have highlighted you are simply renting for the duration of the lease. Not buying a anything.
I accept your point that it was only available for newbuilds for both first time buyers and exciting homeowners. I miss understood this.
The point is here help to buy should not be used against leasehold houses. I totally agree.
Hi Leaseholder, no worries here. We are all usually on the same track, or very close.
Keep calm and press on!!! United we stand, and of course give such good advice to those ministers who don’t seem to have a clue!!, or even worse, don’t do anything that is “meaningful”
Kim Firstly if a buyer meets the strict criteria for HTB scheme then they are entitled to use it and obviously it was not just for first time buyers as people with existing homes also used the scheme. The “fault” lies with the government for not setting the criteria correctly. Secondly to say that people who have used HTB have “reaped what they have sown” regarding the ground rent increases linked to leasehold new build is definitely an unwarranted attack on ALL leaseholders caught in this trap as the majority were completely unaware of the consequences. I do wonder why you felt compelled to make that statement. Finally my understanding is that all HTB purchasers need to pay the 20% loan back based upon the current value of the property plus interest so if you think about it those with the more expensive “five bedroom detatched houses” will potentially be repaying larger amounts back than the first time buyers who used HTB for cheaper starter homes. This means they are paying their due back to the tax payers …so any condemnation about HTB should be truly abd firmly directed towards the government and not the leaseholders.
Ann, I was not making an ‘Attack’ on the HTB purchasers who were not in genuine need of taxpayers funds to purchase their property. The facility was there and why shouldn’t they use it? Similarly the same can be said for the developers flogging off the Freeholders – Why shouldn’t they? The government allowed it- It s not illegal. I think it unethical but so what? It’s allowed- ditto people on a £100’000 getting taxpayers money to help them buy a house. I make no apologies for my previous comments.