Leasehold Solutions, the market leader in project managing lease extensions and freehold acquisitions, has welcomed today’s report by the National Association of Estate Agents (NAEA Propertymark) into abuses in England’s leasehold housing market.
The NAEA report sets out a raft of recommendations to support those working on leasehold reform to ensure that leasehold homeowners are treated fairly in the future. The recommendations include:
- Requiring freeholders to sign up to a redress scheme
- Ensuring developers do not build on land for which they do not own the freehold
- Providing leaseholders with the right to purchase the freehold of their home, before the developer can sell the freehold to a third party
- Educating consumers about the implications of leasehold ownership
- Capping ground rents to provide clarity to home owners.
Prominent leasehold campaigner, Louie Burns, Managing Director of Leasehold Solutions, said: “For too long freeholders have simply denied the many problems evident in the leasehold system, but the NAEA’s report is a damning verdict on the role of developers and freeholders in causing and perpetuating the leasehold houses scandal.
“The report shows that 94% of leasehold home owners regret buying a leasehold property, while 93% say they would never buy another leasehold home. These figures illustrate the issue at the very heart of the leasehold scandal. It is outrageous that leasehold houses continue to be sold when they are clearly doing so much harm to home owners.
“Often consumers have little choice but to buy leasehold properties, which can appear to be cheaper than freehold properties at initial purchase, but which quickly become an ongoing financial burden for the consumer, and a cash cow for developers and freeholders who can exploit their tenants for decades through ground rent, service charges, lease extensions and fees for property alterations.
“This is truly a scandal and the Government needs to take urgent, robust action to ensure that leaseholders are protected from such abusive practices.”
The NAEA report reveals some very troubling statistics about the way leaseholders have been treated when purchasing their property:
- 62% of leaseholders felt that they were mis-sold when they bought their leasehold home.
- 65% of people who bought leasehold homes used solicitors that house builder recommended.
- 57% said that they didn’t understand what being a leaseholder meant until they had already purchased their property.
- 48% were unaware of escalating ground rents attached to their lease when they purchased the property
- 70% of leaseholders are worried that they will not be able to sell their homes because they are leasehold
- 60% of those leaseholders currently trying to sell their home report that they are struggling to sell the property because it is leasehold
Louie Burns continued: “Developers are quick to advise leaseholders that they should simply sue their solicitors if they were not given adequate advice, but this can be very costly for leaseholders who are already struggling financially.
“Shockingly, leasehold houses are not covered by the 2015 Consumer Protection Act, so leaseholders have no legal recourse. It is absurd that consumers have more legal protection when they buy a new toaster than when they purchase a leasehold property.
“We are calling on the Government to change legislation to stop the continuing abuse in the leasehold sector. The Government has tabled a raft of potential legislative changes and we urge them to provide legal protection for people who find themselves caught in the spider’s web of leasehold.
“We also urge all leaseholders to take part in the Law Commission’s forthcoming consultation this autumn, to provide enough real evidence to compel law makers to change this feudal land tenure of leasehold once and for all.”