Leasehold reforms ‘do nothing to help existing home owners’

The backlash against the Government’s leasehold reforms has already begun.

Housing Secretary James Brokenshire unveiled a range of reforms for the new-build sector last week including setting new ground rents at zero and banning the sale of new-build houses as leasehold.

But Louie Burns, managing director of enfranchisement firm The Leasehold Group, warned that these changes do nothing to help existing leaseholders currently paying ground rents.

He said: “Naturally, we welcome the ban on ground rents for new leasehold houses. There is absolutely no reason for a house to ever be sold on a leasehold basis, so ending this exploitative model of home ownership is certainly a step in the right direction.

“If the Government has felt the need to step in and change legislation to ban the sale of leasehold houses, this proves that it was clearly wrong to sell them as such in the first place.

“However, there are thousands of people who already own houses on a leasehold basis and these proposals do not remove their obligation to pay ground rents.

“These proposals do nothing to help existing leaseholders and will create a two-tier market, where the values of leasehold houses will fall further as the properties become increasingly unattractive to buyers.

“Something must now be done to help those already trapped by the leasehold house scandal, not to mention the millions of leasehold flat owners who are still affected by onerous ground rents, unfair service charges and exploitative informal leases that offer no legal protection.

“The Government now needs to act quickly to help the many people already caught in this trap.”

Burns also criticised exemptions on ground rent charges for The Crown Estate, the National Trust and retirement sector.

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