Time to end scandal of ‘rip-off’ leases
MPs in Kent are leading calls for a change in the law to help tens of thousands of homeowners in the county facing “scandalous” charges they can often do nothing about.
Figures obtained by the KM show an estimated 122,000 home owners in Kent are trapped in controversial property management contracts.
And it is not just those in flats that are at the mercy of rising fees imposed by unregulated companies, but an increasing number of houses in newly-built developments.
Homeowners in new developments often have to pay “estate charges” on top of their council tax bills.
Some of the worst examples nationally include a homeowner charged £1,500 by a property management company to make a small alteration to their house and a family house branded “unsellable” because the ground rent is expected to reach £10,000 a year by 2060.
Many homeowners who have bought new-builds might not even be aware such charges exist as some say the extra costs were not made clear during the buying process and are buried in complex lease documents.
The government is currently analysing feedback received from a public consultation into tackling unfair practices in the housing sector.
A white paper, Fixing our Broken Housing Market, highlighted ministers’ aims to “tackle unfair and unreasonable abuses of leasehold; in particular the sale of new leasehold houses and onerous ground rents”.
Officials are said to be considering reducing ground rent fees to zero on new-build homes and an announcement is expected within the coming weeks.
But it is not clear what will happen to existing owners.
Despite facing additional fees, house owners do not have any right to challenge them.
Flat owners face unlimited ground rent charges and, according to residential leasehold law in England, as such payments are connected to the property’s lease, the owner can be evicted if they fail to pay.
Rochester and Strood MP Kelly Tolhurst, who organised a debate about property management company fees in parliament, is among those demanding changes to the law.
“This is an industry with too much room to rip off those with few options,” she said in the House of Commons.
Maidstone and Weald MP Helen Grant, a member of the All Party Parliamentary Group for Leasehold and Commonhold Reform, confirmed she had received complaints from constituents about property management companies which she has acted on.
“I believe the leasehold model is appropriate in certain circumstances,” she said.
“But I also feel strongly that reform and controls are needed to curb unfair leasehold terms.”