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| Leasehold now the No 1 concern for UK homeowners, study finds | |
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| Leasehold has become the No 1 concern for homeowners in the UK, according to a new study, after it emerged that many new homebuyers have been trapped by spiralling ground rents. | Leasehold has become the No 1 concern for homeowners in the UK, according to a new study, after it emerged that many new homebuyers have been trapped by spiralling ground rents. |
| The annual survey of property owners by the HomeOwners Alliance found that 50% of UK adults see the current leasehold-freehold system (including service charges and ground rent) as a very serious or serious problem, up from 42% last year. | The annual survey of property owners by the HomeOwners Alliance found that 50% of UK adults see the current leasehold-freehold system (including service charges and ground rent) as a very serious or serious problem, up from 42% last year. |
| Paula Higgins, the chief executive of the HomeOwners Alliance, said: “Unscrupulous players within the industry have turned what has been a form of tenure for centuries into a money-grabbing scheme that has left thousands of buyers across the country trapped in properties that are now essentially unsaleable. | Paula Higgins, the chief executive of the HomeOwners Alliance, said: “Unscrupulous players within the industry have turned what has been a form of tenure for centuries into a money-grabbing scheme that has left thousands of buyers across the country trapped in properties that are now essentially unsaleable. |
| “Leasehold houses, doubling of ground rents and unfair clauses are leaving homeowners in a nightmare situation and the government is clearly not treating the issue with the severity it deserves. These people need help and they need it now.” | “Leasehold houses, doubling of ground rents and unfair clauses are leaving homeowners in a nightmare situation and the government is clearly not treating the issue with the severity it deserves. These people need help and they need it now.” |
| The Guardian, in partnership with campaign group Leasehold Knowledge Partnership, revealed last year how developers such as Taylor Wimpey had introduced clauses into 999-year leases on new-build houses that resulted in ground rents doubling every 10 years. Some buyers have found their homes unsaleable after mortgage companies refused to lend against properties with onerous ground rent clauses. | The Guardian, in partnership with campaign group Leasehold Knowledge Partnership, revealed last year how developers such as Taylor Wimpey had introduced clauses into 999-year leases on new-build houses that resulted in ground rents doubling every 10 years. Some buyers have found their homes unsaleable after mortgage companies refused to lend against properties with onerous ground rent clauses. |
| Others have been staggered to learn that their freehold has been sold on to other companies, which in turn have demanded inflated amounts to buy them out. | Others have been staggered to learn that their freehold has been sold on to other companies, which in turn have demanded inflated amounts to buy them out. |
| Taylor Wimpey has since stopped selling homes with doubling ground rent clauses, and begun a £130m scheme to change the leases, but many buyers remain unhappy. | Taylor Wimpey has since stopped selling homes with doubling ground rent clauses, and begun a £130m scheme to change the leases, but many buyers remain unhappy. |
| Lee Bennett from Manchester has begun parking advertising vans outside new-build developments in the north-west where homes are being sold as leasehold. His van, parked outside one Persimmon development at the weekend, says: “Thinking of buying new dream home? Before signing anything, make sure it’s not leasehold, or it will become a prison!” | Lee Bennett from Manchester has begun parking advertising vans outside new-build developments in the north-west where homes are being sold as leasehold. His van, parked outside one Persimmon development at the weekend, says: “Thinking of buying new dream home? Before signing anything, make sure it’s not leasehold, or it will become a prison!” |
| Bennett bought a leasehold house with a 999-year lease, but is now part of a Facebook campaign against charges that has attracted more than 4,000 members. “I was never told it doubled. The sales staff said do not worry about it – you can buy the freehold for £4,800 at any time you like. Then they sold it on to an investment firm without ever warning us. Now the new landlords want £45,000 off us to buy it back,” he said on his Facebook posting. | Bennett bought a leasehold house with a 999-year lease, but is now part of a Facebook campaign against charges that has attracted more than 4,000 members. “I was never told it doubled. The sales staff said do not worry about it – you can buy the freehold for £4,800 at any time you like. Then they sold it on to an investment firm without ever warning us. Now the new landlords want £45,000 off us to buy it back,” he said on his Facebook posting. |
| Ground rents are not the only issue worrying homeowners, with many new buyers engaged in battles over service charges and the cost of extending existing leases. | Ground rents are not the only issue worrying homeowners, with many new buyers engaged in battles over service charges and the cost of extending existing leases. |
| Leasehold, once seen as a dying relic of the Victorian property market, has returned with a vengeance since the 1990s, according to the HomeOwners Alliance. In 1996, just 22% of new-builds in the UK were sold as leasehold, but this has doubled to 43% at present. In London, nine out of 10 new-builds are now leasehold. | Leasehold, once seen as a dying relic of the Victorian property market, has returned with a vengeance since the 1990s, according to the HomeOwners Alliance. In 1996, just 22% of new-builds in the UK were sold as leasehold, but this has doubled to 43% at present. In London, nine out of 10 new-builds are now leasehold. |
| The group is demanding that the government calls a halt to new leaseholds, with developers forced to switch to “commonhold” instead. This is similar to the US-style system used for condominiums, which effectively gives a freehold to every flat buyer alongside a common responsibility for the building. It was introduced in the UK in 2002 but has been a “massive disappointment”, according to Higgins. | The group is demanding that the government calls a halt to new leaseholds, with developers forced to switch to “commonhold” instead. This is similar to the US-style system used for condominiums, which effectively gives a freehold to every flat buyer alongside a common responsibility for the building. It was introduced in the UK in 2002 but has been a “massive disappointment”, according to Higgins. |
| Mortgage lenders are likely to be crucial when it comes to the future of leasehold. Last month Nationwide told developers it would no longer lend against new-build properties where the ground rent is more than 0.1% of the value of the home, or where the lease is shorter than 125 years. | Mortgage lenders are likely to be crucial when it comes to the future of leasehold. Last month Nationwide told developers it would no longer lend against new-build properties where the ground rent is more than 0.1% of the value of the home, or where the lease is shorter than 125 years. |