GREAT LEASEH OLD BETRAYAL
Minister refuses to crack down on toxic contracts ... and blames buyers for being too ‘excited’ to read small print
A HOUSING minister has refused to help families stuck in toxic leasehold deals.
Heather Wheeler dismissed claims of mis- selling and said fresh legislation would trigger a ‘horrendously expensive’ wave of compensation claims.
She appeared to play down the numbers affected, saying it could be as low as 12,000 and not the 100,000 cited by campaigners.
And she said buyers might have been ‘caught up in the moment’ and ‘excited’ when they signed leases for first homes.
Mrs Wheeler said she would prefer to rely on developers and property companies voluntarily giving families better terms. Government estimates suggest there are 4.3million homes with leases in England, 1.4million of them houses.
The Leasehold Knowledge Partnership campaign believes 100,000 families are trapped in houses that are now unsellable because their contracts are so unfair.
Some double charges every decade, while other freeholds are sold on to third parties who only allow homeowners to buy them out for exorbitant fees.
Ministers have pledged to outlaw the sale of newly built homes with leases following a public outcry. But Mrs Wheeler’s comments suggest those already hit by the problem will be left to fend for themselves.
Speaking at a Commons committee, Mrs Wheeler said legal advice showed legislation would be ‘horrendously expensive’, add- ing: ‘I’d much rather go down the voluntary route. There have been agreements between freeholders and leaseholders and clearly we want that momentum to carry on.’
The Mail has led the way in exposing the leasehold scandal, including where clauses make ground rents double every decade.
The issue has been dubbed ‘the PPI of the housebuilding industry’ – a reference to the mis- selling of payment protection insurance by banks. Campaigners say developers used the ‘feudal’ agreements to squeeze extra cash out of families desperate to get on the housing ladder – many with the support of the taxpayer through Help to Buy.
Katie Kendrick, founder of the National Leasehold Campaign, said: ‘Heather Wheeler’s performance was absolutely appalling.
‘ Leaseholders are in uproar about this. When your life has been blighted by this scandal and you are still living this nightmare daily, and you hear what she is saying, it is just not acceptable.
‘This has been going on for years now and yet we are no further forward. Heather Wheeler just does not get it. Her demeanour at the committee made it seem like she did not have much respect for leaseholders and she made several flippant comments.’
Sebastian O’Kelly, a spokesman for the Leasehold Knowledge Partnership, said: ‘ Heather Wheeler’s evidence revealed a complacent approach when there should be urgency.’
Labour MP Tan Dhesi said: ‘The only way to solve the problem is with legislation.’
Home Secretary Sajid Javid vowed when he held the housing portfolio to outlaw the use of leaseholds on newly-built homes in December 2017, branding the practice ‘feudal’.
But more than a year later, campaigners say those trapped in toxic contracts are no closer to escaping them.
Despite many leaseholders claiming they were not made aware of the full terms of their contracts, and suggestions it was similar to the PPI scandal, Mrs Wheeler said she did not agree it was an example of mis-selling.
The 59-year-old, who owns her constituency home in Burton- on-Trent outright according to the Land Registry, previously sparked controversy when she tweeted that the ‘ British Empire’ came first with 396 medals in the Rio Olympics, referring to Britain and countries that were formerly its colonies.
Mrs Wheeler told MPs the comparison to PPI was difficult ‘ because in effect with PPI you were sold something you really didn’t need, whereas this is completely different’. She said the Government was waiting on the outcome of two reviews, one by the Law Commission and another by Lord Best, related to leaseholds. But campaigners say neither of these are likely to help those already trapped in unfair deals.
An inquiry is being carried out separately by MPs on the Commons housing committee.
The Ministry of Housing, Communities and Local Government said: ‘This government is determined to crack down on unfair practices within the leasehold market and ensure that consumers are protected from unjust charges and poor service.
‘Many leaseholders have told us of their concerns about the quality of legal advice they received when purchasing a leasehold property.
‘That’s why the Secretary of State wrote to the Solicitors Regulatory Authority in November to ask them to look into this issue as a matter of urgency, and will not hesitate to take further action if necessary.’
TRAPPED in homes they can’t sell because of toxic leases foisted on them by grasping developers, upwards of 100,000 beleaguered homeowners are crying out to the Government for help.
Predominantly first-time buyers, they are stuck with spiralling ground rents on unmortgageable properties, which they believe were sold under false pretences.
And to make things much worse, their freeholds have been sold on to rich, faceless investors interested only in maximising profits. Some are being charged thousands just for permission to build extensions.
It is a heartbreaking tale of greed and exploitation. So what is the Government doing about it? The answer is, nowhere near enough.
Two years ago, the then communities secretary Sajid Javid described the selling of new houses on these toxic leases as a ‘feudal’ practice and pledged urgent action.
But yesterday at a Commons committee meeting, housing minister Heather Wheeler struck a very different tone.
Having first claimed the numbers were grossly exaggerated and that this was nothing more than a minor issue, she suggested affected couples were the architects of their own misfortune.
There had been contracts and legal advice, so the buyers were to blame.
Besides, providing compensation or redress would be ‘horrendously expensive’.
What a breathtakingly callous abrogation of responsibility by a minister appointed to protect local communities.
The culprits here are not the buyers but the big developers. They knew exactly what they were doing when they sold these ghastly leases. It is they who should make redress.
It’s not as if they can’t afford it. At the end of 2016, Persimmon, one of the companies at the centre of the scandal, paid £500 million in bonuses to 150 senior staff – including £75 million to its chief executive alone.
So while these fat cats are living the high life, their victims languish in effectively worthless homes.
It is a ruthless abuse of capitalism which plays straight into Labour’s class war narrative. A Tory government should be stamping it out – not condoning it.