LEASEHOLD REVOLUTION
Rip-off charges trapping families in unsaleable homes to be banished
NeArLy 4.5million leaseholders in england will be ‘tens of thousands of pounds’ better off as a result of laws to be unveiled today by the Housing Secretary.
robert Jenrick said his attempt to make it cheaper and simpler for leaseholders to buy their properties is the biggest property law reform since Margaret Thatcher’s right-to-buy revolution in the 1980s.
Ground rents will be scrapped for millions with a new right to extend leases to 990 years.
They will also be reduced to zero on all new retirement homes.
The Government said the changes ‘could save households from thousands to tens of thousands of pounds’. Mr Jenrick will also pledge to boost moves to allow residents of flats to take charge of running their blocks, freeing them from sky-high maintenance charges by landlords accused of ‘ripping off’ leaseholders.
He wants to increase the number of commonhold agreements, a littleknown form of ownership that allows residents of apartment blocks to maintain it themselves or employ a maintenance firm to do it.
It would mean that if the company fails to do the job properly, the residents could sack them.
Leaseholders groups welcomed Mr Jenrick’s ‘anti rip-off landlords charter’ and warned him not to let powerful landlords block it.
The announcement is intended to start the phasing out of leaseholds, the origins of which date back to
William the Conqueror. Mr Jenrick’s announcement comes after a Daily Mail campaign to end ‘toxic leaseholds’ used by developers of new housing estates to force owners to pay soaring costs. It has been claimed that 100,000 families cannot sell their homes because their contracts are so unfair.
Mr Jenrick said the Grenfell Tower disaster, in which 72 people died in an blaze in London in 2017, highlighted the need for reform.
Writing in today’s Daily Mail, he says: ‘The Grenfell Inquiry has laid bare some of the astonishingly brazen behaviour of developers and managing agents in cutting corners and putting residents at risk.
‘This is a corporate scandal. We are – and will continue – holding them accountable.
‘The Government is working at pace to develop further financial solutions to protect leaseholders from unaffordable costs.
‘The scandalous pitfalls of leasehold are being banished by this Government, and we are putting fairness back at the heart of the housing system.’
There have been a series of botched attempts to reform leasehold laws in the last 50 years. Some landlords have sold on freeholds to third parties who only allow homeowners to buy them out for exorbitant fees.
Some leaseholders have had to pay huge sums for permission just to add a conservatory to their house.
A Law Commission report last year which said the ‘medieval’ leasehold system was not working.
It was time to end ‘high, escalating and onerous’ ground rents, excessive service charges and profiteering
by developers, it added. The commonhold system had been used successfully by other countries, the Commission added.
Mr Jenrick will set up a Commonhold Council of experts to decide how such an agreement would work, such as if there are freehold and leasehold residents in the same apartment block.
When the new law is introduced, leaseholders will be able to work out the cost of their premium – the payment to the landlord for purchasing the freehold or extending the lease – via an online calculator. At present it can cost tens of thousands of pounds to extend when a lease has less than 80 years to run.
Katie Kendrick, of the National Leasehold Campaign, warned against giving landlords too much say in the commonhold plans. ‘We cannot trust those who created this scandal to be part of the solution,’ she said.