During 2020, we have been in constant contact with cabinet ministers, concerned MPs, peers and civil servants to stress how, while left unchecked, the leasehold market is continuing to cost homeowners eye-watering sums of money for escalating ground rent and fees, effectively imprisoning them in their property while they are rendered impossible to sell.
Another point of contention that has affected leaseholders is the ongoing issue of the removal of dangerous cladding from multi-storey properties, many of which are made up of apartments owned by leaseholders. In September, the Government published the Draft Building Safety Bill, however there were major concerns that the draft does not do enough to protect leaseholders. As part of our campaign for leasehold reform, we continue to press Government for further support for leaseholders in this area.
This week, we had a response from MHCLG which confirmed that our campaign is continuing to pay off, with an indication that tackling unfair practices in the leasehold market is being pushed forward by Government and new legislation will be brought to Parliament in the near future.
What needs to be done?
In September 2018, NAEA Propertymark produced a report based on feedback from over 1,000 leaseholders within the UK. The findings were stark, with almost all buyers regretting buying a leasehold, indicating a deep-rooted dissatisfaction with the circumstances that come with owning a leasehold property.
There is also a particular concern with new build properties, with housebuilders and developers not being transparent enough about what buying a leasehold property means for homeowners. This is highlighted in our report, with 62 per cent of leasehold property owners feeling like they were mis-sold, and 57 per cent admitting they did not understand what being a leaseholder meant until they had already purchased the property.
There is a long list of improvements the Government needs to focus on to ensure the leasehold market is fair, but we have argued that any changes must include measures to prevent ground rent from escalating unfairly and a restriction on the sale of new-build houses unless there is a legitimate reason.
In their response to us this week, MHCLG also said they are looking at a number of measures, including banning the sale of new leasehold houses, restricting ground rents to zero for future leases, give freehold homeowners new rights to challenge unfair charges and will look to close the loopholes that cause unfair evictions.
