… And issues 999 year leases
… And ensures all new sites have residents’ management companies
A fundamental crack seems to have appeared in the leasehold racket as Barratt London drops ground rents, issues 999 year leases and enshrines leaseholder self-governance with resident management companies.
It is unclear whether this is a nationwide policy change by Barratt, or restricted to Barratt London. It may, indeed, only apply to the Blackhorse View site in Walthamstow where homes are priced £322,605 to £489,000.
The Independent takes up the story:
Campaigners have hailed a breakthrough in the leasehold scandal that could help thousands of prospective homeowners after the UK’s largest house-builder eliminated ground rents on its new developments. Barratt Developments is beginning to offer 999-year leases and zero ground rent on new-build flats.
Nonetheless, it is huge shift in gear on the part of a plc housebuilder and indicates a change of direction as consumers rebel against predatory ground rents and gaming the opportunities of leasehold tenure.
It is now an open question whether – perhaps even when – other developers follow suit.
For years LKP – and more recently the National Leasehold Campaign – have been calling for an end to the leasehold racket.
Is Berkeley also abandoning ground rents? If so, this is massive …
A leasehold reform Bill is anticipated to respond to the Law Commissions three reports to reform the leasehold sector. And the government is pledge to set new ground rents to zero (possibly with an unmerited exemption for retirement builders. Even Communities Secretary Robert Jenrick repeated the commitment to zero ground rents last month.
The leasehold system has seen consumers pay sky-high prices for flats with predatory lease terms, including gaming the ground rent review periods and flogging off the freeholds to murky and anonymous private equity investors, often based offshore.
Given that 100,000s of flats in high rises and those lower than six storeys – ie 18 meters – are blighted and unsellable thanks to the cladding scandal, these purchases look very dubious indeed.
As the government trumpets Build! Build! Build! to get a new generation of home owners onto the property ladder, the previous generation of first-times caught up in the cladding scandal face homelessness and financial ruin.
The full Barratt document dated December 2020 is here. We will seek clarification from Barratt on how widespread this change of heart is on Monday: