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”.