Labour outlines its plans for leasehold reform as criticism continues over Government inaction

The Government has been accused of “fence-sitting” when it comes to leasehold reform as Labour sets out its stall on how it would change the market.

It comes as the Government responded to the Housing, Communities and Local Government Committee’s leasehold inquiry last week, but appeared to have not taken many of the suggestions forward.

The Government response highlighted recent announcements it has made on banning the sale of leasehold houses, removing ground rent costs on new leases and the creation of a new homes ombudsman.

But there was little response on support for existing leaseholders, with the Government merely acknowledging proposals on capping ground rents for existing leaseholders.

Its response has been criticised for describing leasehold as a “legitimate form of home ownership”, and also didn’t respond to calls to prohibit the offering of financial incentives to persuade a customer to use a particular solicitor, which has been blamed for many buyers not understanding or knowing that they were purchasing a leasehold property.

Louie Burns, managing director of enfranchisement specialists the Leasehold Group of Companies, said: “While indecisive ministers dally, freeholders continue to abuse leaseholders unchecked. The introduction of a voluntary pledge of good behaviour, supported by Government, has not curbed freeholders’ worst instincts, nor have they lost their drive to extract as much money as they possibly can from leaseholders.

“We regularly travel the country with our free roadshows speaking to thousands of leaseholders advising them of their legal rights. We speak to people in tears suffering at the hands of greedy freeholders and their dirty tricks. Many are suffering with mental health issues and feelings of real despair.

“The first debate on leasehold abuses was held in 1884 with hundreds of examples of freeholders’ abuses. Since then there have been thousands of other examples offered in parliamentary debates.

“Yet the document reaffirms that ‘The Government is clear that leasehold is a legitimate form of home ownership’, even though everyone in this country, save the freeholders who profit, knows that leasehold is an unjust system.”

Meanwhile, Labour has put out its own proposals that would go further than the current reforms if it were in Government.

Its report, titled Ending The Scandal, Labour’s New Deal For Leaseholders, proposes a ban on the sale of both new leasehold houses and flats.

Labour would also make leaseholders able to purchase their full freehold for a maximum of one per cent of the property value, and ground rents on existing leaseholds would be capped at 0.1 per cent of the property value, up to a maximum of £250 a year.

John Healey, shadow housing secretary, said: “Leasehold is a symbol of our broken housing system, with millions of England’s home owners feeling like they’ve bought their home but still don’t own it.

“The scale of the problems faced by leaseholders, from rip-off ground rents, to punitive fees to onerous contract conditions stating what they can and can’t do to their own homes, demands wholesale change. We need a revolution in rights for leaseholders.

“This consultation document sets out the next Labour Government’s ambition to end the broken leasehold model for good.”

The National Leasehold Campaign said the proposals “upped the stakes in the competition for votes of the millions of existing leaseholders”.

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9 Comments

  1. Rob Hailstone

    Law Society response yesterday:
    New leasehold information rules a big victory for consumers – Law Society
    The endorsement by ministers of proposals to give consumers significantly more information early in the home buying process was today given a partial welcome by the Law Society of England and Wales.
    “It is encouraging to see government has recognised just how much easier it will be for consumers to make informed decisions if full information is provided at the very beginning of the home buying process,” said Law Society president Simon Davis.
    “Conveyancing solicitors are usually involved at a much later stage, by which time clients may have already emotionally committed to the purchase – and may be less open to hearing advice about onerous conditions. This can make it much more difficult to advise. A time limit of 15 working days for developers and estate agents to provide the necessary information is therefore entirely appropriate and to be welcomed.
    “It is particularly pleasing that alongside the government-proposed key features document for new build homes, there will also be some provision for the second-hand market. This will help consumers to make comparisons between properties they wish to view. “We are keen to see a satisfactory resolution to all of the issues currently facing affected owners and prospective purchasers of leasehold properties. Although these proposals appear to be a step in the right direction, we look forward to seeing further details of how the proposed legislation will work in practice.”

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  2. Will2

    If Corbyn and his cronies have their way all property would be owned by the state

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    1. GDMS

      But they want to reduce costs for individuals who own leases, and reduce payments to large often corporate freeholders.

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  3. TwitterSalisPropNews

     

    What nonsense to say:

    “……to prohibit the offering of financial incentives to persuade a customer to use a particular solicitor, which has been blamed for many buyers not understanding or knowing that they were purchasing a leasehold property.”

    The REAL reason why purchasers do not understand leasehold property is because:

    1.              Estate agents give no factual information
    2.              Rightmove give no factual information linked to the leasehold properties they sell
    3.              Mortgage advisers give no factual information
    4.              Mortgage companies give no factual information
    5.              Surveyors give no factual information
    6.              The Government do not require any of the above to give any factual information
    7.              The Law Society TA7 (Leasehold Information Form) gives no information

    Finally

    …..8.           Yet when it gets as far down the line as the closing stages with the conveyancer stepping in…..so many of them TRUE……then offer such a poor Property Report on the lease, certainly with little or no third party literature to help explain what a lease is etc,

    So everyone is at fault in the system.

    Nothing at all to do with the conveyancer receiving a financial incentive, that is just complete nonsense. Conveyancers are not corrupt! If they have failed to give factual information, it is because they, like vast numbers of conveyancers – even ones reading this now who will defend themselves – just have a brief reporting system, nothing sinister, just a poor conveyancing service.

    (Some of us conveyancers do offer a very good explanation and Property Report BTW   – a very good one!  :o)    )

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  4. Alan Murray

    First thing to say is, do the Labour Party know their history? When was one of the biggest housing booms in recent memory, where any vacant car park or wasteland was bought by developers to turn into leasehold flats? During the premiership of Tony Blair of course, a Labour prime minister. Or are they deleting that from their history?
    To the Trotskyist/Marxist/Leninist loony lefties that now run the party property is of course theft. So decent hard working middle class straight white people such as myself are anathema to these people and have everything to fear in the terrifying event that the electorate are crazy enough to vote them into power. I would expect a massive hike in upper levels of stamp duty and rights for private renters to buy property in the same way as council and social housing tenants presently have the right.
    The policy I would really fear is some kind of mansion tax, people with big houses and empty rooms being forced to take in homeless people or pay tax on empty space. To punish them for working hard and buying properties bigger than they need! How dare people want the best they can have? I don’t think the country has anything to gain from these lunatics taking over the asylum.
    Certainly we could expect a property crash, which they would probably want anyway. They will probably just abolish existing leasehold and say all Leases in favour of freeholders are null and void and the masses own their freeholds again. Unless the lessees live in Knightsbridge or Kensington of course.
    Nothing will be too extreme for these people, they hate the country and the people that have paid taxes for many years to sustain it. Their supporters are going to expect free stuff and giveaways similar to Obama’s America and the “haves” are going to be hammered. Whilst all the time bringing the country to a standstill by striking every five minutes. Be afraid be very afraid.

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  6. bornadl

    First thing to say is, do the Labour Party know their history? When was one of the biggest housing booms in recent memory, where any vacant car park or wasteland was bought by developers to turn into leasehold flats? 

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    1. bornadl

      Very nice aricle.

      https://life-music.ir/

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