Leaseholders and campaign groups have slammed a building industry pledge to stop leasehold exploitation.
The Government excitedly unveiled an industry pledge from freeholders and property developers yesterday to end the use of onerous terms in leases, but the efforts have been described as a PR stunt.
Louie Burns, managing director of Leasehold Solutions, which advises leaseholders on purchasing or extending their lease, said: “This pledge is a pathetic attempt by the Government to row back on its commitment to leasehold reform.
“Despite the Government’s promise that it would legislate to end abusive practices by freeholders, what they’ve actually done is put the very people responsible for exploiting leaseholders in charge of regulating themselves.
“Of course, it’s high time that leaseholders affected by doubling clauses have such terms removed from their leases. But let’s not forget that the property developers and freeholders who have signed this pledge were the architects of doubling ground rent clauses in the first place.
“They have made massive profits from their unsuspecting leasehold clients for years and it is absolutely laughable that they are now pretending they’ve had enough of freeholder abuses and want to protect leaseholders.
“This is akin to being caught robbing a bank and then being put in charge of guarding the vault. These housing developers and freeholders have already demonstrated that they are not to be trusted and will always prioritise profits. The pledge is not legally binding, and it does not offer one scrap of reassurance to leaseholders.
“The Government needs to stop wasting time with inconsequential PR stunts and instead focus on carrying out its promise to change legislation to actually protect leaseholders.”
Activists in the National Leasehold Campaign (NLC) group were equally scathing.
Jo Darbyshire, of the NLC, said: “This pledge is the ‘as little as they think they can get away with’ response that the NLC predicted when asked what we think developers and freeholders will do to try to resolve the leasehold scandal they created, and until recently denied existence of.
“It is a sad reflection of our broken housing market that this pledge has to be made at all.
“It’s time for Government to take a much stronger stance and avoid being taken in like Little Red Riding Hood as the leasehold wolves dress up like granny. We’ve seen developers posting obscene profits; they can afford to do the right thing, they choose not to.”
There was some support for the pledge.
Mark Hayward, chief executive of NAEA Propertymark, described it as “a victory for those stuck in leases with onerous ground rent payments, charges for making alterations to their properties, and ultimately, unable to sell their homes.”
He said: “Buying a property is a huge undertaking and it should be an exciting time, but for thousands of homeowners, it’s led to financial difficulty as they’ve become trapped in confusing contracts with freeholders.
“The Government promised to ban the sale of new leasehold houses in 2017, but the pledge, backed by developers, is a triumph for those already tied into leases.
“It’s also positive that the retirement sector has been included in the Government’s pledge. With event fees being reformed, older homeowners who have historically been stung with unfair charges when they become ill or die, will be treated fairly when they are at their most vulnerable.
“These measures are a huge step in the right direction towards fixing Britain’s broken housing market.”