Countryside Properties this week joined Taylor Wimpey and Aviva in announcing it will end the doubling of ground rents on new build developments.
Consequently, thousands of leaseholders who purchased properties from the housebuilder will no longer be subjected to ground rents that double every 10 or 15 years.
Countryside Properties will keep rents at the same level as when they first bought their home after a probe by the Competition and Markets Authority (CMA).
The move has been welcomed by various bodies, including the Association of Leasehold Enfranchisement Practitioners (ALEP).
Mark Chick, ALEP director, said: “The momentum behind leasehold reform continues to grow. The announcement by Countryside Properties will remove onerous and unfair clauses and end the doubling of ground rents every 10 to 15 years, meaning thousands more leaseholders are now more likely to be able to sell or remortage their properties.
“We would encourage any leaseholders who have been affected or who are unsure of how the proposed changes may affect them, to contact one of our members for advice.”
Countryside is doing the right thing by scrapping leasehold ground rents, albeit having been incentivised to do so following the investigation by the CMA, according to Jonathan Frankel, leasehold enfranchisement specialist and partner at Cavendish Legal Group.
He commented: “It is another step in the right direction following the announcement by Persimmon and Aviva in June to allow leaseholders to buy their freehold.
“We hope that it will encourage other housebuilders to do the same because the fact is leaseholders are in a state of limbo right now. They have been waiting months and months for the government to move forward with the reforms announced in January, and in the meantime find it much more difficult to sell their property whilst the shadow of ground rents is over them.
“We also only hope that Michael Gove in his new role as housing secretary can move things along with more urgency than his predecessor Robert Jenrick.
“There is no good reason why homeowners should be paying ground rents in 2021 and developers and landlords across the country should be doing the right thing and enabling leaseholders to feel truly secure in their own homes.”
Mark Hayward, Propertymark chief policy advisor, concurred: “Most consumers are completely unaware that buying a new build directly through a developer leaves them vulnerable and without protection.
“Unfortunately, many leaseholders get lumbered with escalating costs making these properties expensive to live in and often difficult to sell.”
“Mark Hayward, Propertymark chief policy advisor, concurred: “Most consumers are completely unaware that buying a new build directly through a developer leaves them vulnerable and without protection.”
How is this possible? Developers are subject to CPRs 2008 – so how are the “consumers” Mr Hayward refers to unprotected and/or vulnerable? Or how is the same ‘consumer’ less vulnerable and more protected buying a property… ANY property… through an Agent – whether they be a Propertymark member or not?
If this is Mr Hayward’s play to make Membership of Propertymark mandatory for developers, then he’s going about it like a wassock with a chainsaw.
Perhaps EYE could ask Mr Hayward these questions. I for one would love to know the answers…
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“We would encourage any leaseholders who have been affected or who are unsure of how the proposed changes may affect them, to contact one of our members for advice.”
Erm… aren’t the “proposed changes” applicable to new sales only – not to be applied retrospectively to current homeowners? Otherwise, surely, all current Leases will need to be amended (potentially involving some cost to the homeowner?) – and in many cases those Freeholds are already in the hands of others who I cannot see being willing parties to give up their meal tickets.
The article goes on to state
“Countryside is doing the right thing by scrapping leasehold ground rents”
They aren’t. As it says in the first paragraph, they are ending “the doubling of ground rents”.
Clocks are extremely difficult things to turn back…
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