North Swindon MP Justin Tomlinson has welcomed the Government’s crackdown on unfair and abusive leasehold practises.
Over the past 20 years, the proportion of new-build houses sold on as leasehold has more than doubled, and in some parts of the country it is now almost impossible for a first-time buyer to purchase a new-build home on any other basis.
Huge numbers of properties – including standalone houses with no shared facilities or fabric – are being sold as leasehold simply to create a reliable revenue stream for whoever owns the freehold. In many cases new homes are being built and are sold on in this way, with some of them being sold to new home buyers who are left with unfair agreements that lead to exploitative surcharges and spiralling ground rents.
Under the new system these practices will be stopped and the procedural implications of buying a leasehold home will be simplified.
Justin has been an active campaigner on these issues for quite some time and has progressed these causes through his work on the All Party Parliamentary Group (APPG) on Leasehold Reform, as well as speaking and asking questions in Parliament.
Earlier this year the Government held a consultation into tackling unfair practices in the leasehold market. More than 6,000 people responded, with the majority in favour of widespread reform. In response to this the Government has announced a range of measures to crack down on these unfair practices.
These include:
- Introducing legislation to prohibit the sale of new build leasehold houses, other than in very exceptional circumstances;
- Restricting ground rents in newly established leases of houses and flats to a peppercorn (zero financial value);
- Addressing loopholes in the law to improve transparency and fairness for leaseholders and freeholders; and
- Working with the Law Commission to support existing leaseholders – including making buying a freehold or extending a lease easier, faster, fairer and cheaper; reinvigorating commonhold to provide greater choice for consumers; and to take forward the work in our recent call for evidence on regulating managing agents
The Secretary of State for State for Communities and Local Government has also written to developers setting out that he does not think it is appropriate for the Help to Buy Equity Loan scheme to support the sale of leasehold houses.
Justin Tomlinson MP said: “I have been contacted by many residents who are put in unjust & unfair positions with their housing agreements that leave them having to pay charges which are left in the fine print meaning things like ground rent rise substantially. This has been a major issue of focus for me as an MP, as it has impacted many of the new-build developments in Swindon. I am very pleased to see that The Government has set out concrete measures to address the situation and put an end to this unfair practice.”
