Leasehold issues ‘not addressed’
RESEARCH shows over the past decade almost 4,000 homeowners in Weaver Vale constituency became trapped in a leasehold system that goes back to when kings and barons ruled the land.
Leasehold is where people buy a home but don’t own the freehold, with many discovering only later they must pay spiralling ground rents, untransparent service charges and obscure fees on top of their mortgage.
Land Registry data shows 3,852 people have bought flats and houses this way in Mike Amesbury MP’s Weaver Vale constituency since 2010, with 4.5m affected leaseholders across the country.
The injustice was supposed to be tackled by the Government’s Leasehold Reform (Ground Rent) Bill which received its third reading in Parliament last week.
But Mr Amesbury says the law will only apply to new homes in the future and won’t do anything for current leaseholders in places like Winnington, Northwich, as well as Sandymoor and Beechwood in Runcorn.
He said: “It doesn’t attack the many issues already plaguing existing leaseholders. It won’t deal with existing ground rent costs, with untransparent service charges and managing agents’ fees.
“It won’t force accountability on freeholders or managers for their actions, and it won’t cover the cost of fixing historic building safety defects. It won’t deal with unfair contract terms or the many other issues still faced by homeowners locked into leasehold.
“The unfairness and injustice must be gone for good for the Government to be able to say they’ve taken action.”
Historically, ground rents were set at a nominal ‘peppercorn’ level but in recent years it has been exploited as a source of profit by developers.
Mr Amesbury is pleased the new law will reduce ground rents to zero for new leaseholders but was disappointed his amendment to extend the legislation to existing leaseholders was voted down by the Conservatives.
Leaseholders were often unaware of hidden costs at point of purchase in a mis-selling swindle Mr Amesbury has dubbed the ‘new PPI scandal’.
Sometimes this was because the vendor recommended the use of a licensed conveyancer to seal the deal.
Unlike a traditional conveyancing solicitor, they are not truly independent as they work for both seller and buyer.
The MP added: “I, together with residents from the National Leasehold Campaign, called for an intervention and investigation from the Competition and Markets Authority.
“The CMA has since shone a light on the scandal forcing a number of developers to end the practice of doubling ground rents every 10 years. This investigation continues examining the role of recommended solicitors when selling leasehold properties.”