Thousands are stuck in short-lease homes

NEARLY 400,000 households are trapped in properties with short leases that could leave them facing financial ruin, according to a report published today.

Around 1.6million families live in houses or flats they have bought with leases – meaning they do not own the property outright and pay an annual fee to the freeholder. But almost one in four of these homes – 24 per cent, or 378,000 – have less than 80 years left on their leases before full ownership resorts to the freeholder. The report, by the HomeOwners Alliance campaign group, estimates that the total cost of extending these leases could be ‘well in excess’ of £5billion for these families. It warns many households are in a ‘lease hold trap they can’t get of ’ because they can not afford to extend the lease or buy the free hold, and face huge losses if they sell- up due to the detrimental impact of the short lease on the property price. Many victims are first- time buyers who used the Government mortgage scheme Help to Buy to get on the housing ladder, while others face ground rents that double every decade. Paula Higgins, chief executive of the Alliance, said: ‘The Government needs to take urgent action to protect people from these practices, help people already trapped, and avert a full-blown crisis.’ The shorter the lease, the more costly it is to extend, as the freeholder is closer to resuming full ownership of the property and can demand a higher fee. Communities Secretary Sajid Javid last week attacked the ‘practically feudal practices’ of developers who build new houses and sell them with leases – forcing buyers to pay a yearly ground rent.