UPDATE 22 August 2022: This article is amended to address the resale prices that are listed at the bottom.
So, Barratt has got away with it. Like other plc housebuilders it spread the scourge of leasehold houses around the country, played games with lease lengths and ground rents, and eroded the public’s understandably reserved trust in this sector.
It was a lesser offender than Taylor Wimpey and Countryside Properties plc, which both sold properties with highly aggressive 10-year doubling ground rents, which Barratt did not do: indeed, Countryside Properties plc, whose executives other housebuilders blame as the source of the doubling ground rent game, was still selling them in May 2017, long after LKP had blown open the scandal in autumn 2016.
Nonetheless, LKP told The Independent yesterday:
“Housebuilders sold leasehold homes often to buyers subsidised by taxpayer loans with purposely designed investment assets squirrelled into them, and then sold these lucrative freeholds to private equity punters, often based offshore.
“This practice has eroded the moral authority of this sector, along with the post-Grenfell building safety scandal, and the public must never allow these subsidised homebuilders such un-scrutinised freedom again.”
16 August 2022: The CMA is positively engaging with firms who purchased freeholds from Taylor Wimpey in order to secure formal commitments from those freeholders to remove doubling clauses from their leases, and any doubling terms that were converted to be based on the Retail Price Index (RPI).
If you wish to provide information to the CMA please use one or more of the following email addresses below:
Yesterday the Competition and Markets Authority announced:
“Following careful scrutiny of the evidence gathered, the CMA concluded that it was insufficient to support a clear legal case for the CMA to secure collective redress for Barratt leaseholders under its consumer law powers …
“Barratt’s sales practices have changed, and they no longer sell leasehold houses.”
Hardly a career enhancement, but should Barratt – arguably a lesser offender than Redrow or Bloor – have been let off the hook?
Certainly not, is the view of its former customers at Steinbeck Grange in Warrington, where buyers felt that they were manipulated into buying leasehold houses, some with only 125 year leases.
The freeholds appear to have been sold to Wallace Estates, which belongs to Italian Count Luca Rinaldo Contardo Padulli di Vighignolo, of the hedge fund Camomille Associates. FirstPort provides the management, which the leaseholders claim over charges them.
Three of the five recommended firms of solicitors on Barratt’s panel – which buyers say they were leant on to use by the sales staff – ceased trading after this part of the estate sold out in 2010, it is claimed.
It is also said that those who insisted on using their own conveyancers “appear to have 999 year leases”. And some of the homes were even sold freehold.
Many of the woes at Steinbeck Grange were reported in The Sunday Times last April in an article by Melissa York:
Six months after moving into her new home, Carolyn Bellers received a bill for more than £800 that she did not understand. It was from Solitaire, a property management company she had never heard of and it was for the maintenance of communal carpets and lifts – but she lived in a mews house.
The estate’s problems have also been reported locally:
ANGER is growing among residents trapped in the leasehold scandal as a developer faces accusations of strategically deceiving people and mis-selling homes. Leasehold ownership, most commonly found in flats, means purchasing a property for the duration of a usually long-term lease rather than owning it outright.
The local Conservative MP Andy Carter is quoted in The Sunday Times: “Some of the practices feel to me very dodgy after speaking to solicitors in the town. We have to clean this up. We can’t have this for the most expensive purchase anyone will make.”
Mike Caroll, on behalf of the “victims of Steinbeck grange”, told LKP:
“I am absolutely disgusted that this case has been dropped given the fact that myself and fellow residents have provided collective evidence of fraudulent miss-selling by this developer.
“Myself and residents where interviewed by the CMA after our case was provided to them to investigate by our MP Andy Carter, who met with their former chair Lord Andrew Tyrie at Westminster.
“I personally was interviewed for a number of hours. All of the residents interviewed were informed that we had quite clearly been miss-sold our homes and we have evidence to substantiates this. This includes evidence from ex-employees highlighting that they where not in possession of said leasehold and management information at the point of sale, not to mention the conduct of the developer since victims brought it to their attention.”
As most of the sales occurred before 2010, the CMA also feared that the issues were timed out for effective action by limitations rules.
Frankly, it is difficult to believe that the owners of homes at Steinbeck Grange are just making all this up and in spite of some inconsistencies is appears that Barratt had a pretty pushy sales op underway here.
However, in spite of the issues that campaigners’ have highlighted, resale prices on the Land Registry are almost all positive compared with initial purchase price: the one exception being long ago in 2010.
Campaigners have taken issue with LKP publishing these figures: some of the properties listed below either are not leasehold or do not have the shorter leases of 125 years, they claim. There may also be property management contract differences.
We are also aware, as reported in the Sunday Times, of one leaseholder losing thousands of pounds owing to errors in her lease.
16 Liberty Close, Warrington, WA5 8DS
A 2018-03-01 £220,000
A 2008-06-27 £204,250
24 Liberty Close, Warrington, WA5 8DS
A 2021-03-05 £290,000
A 2008-11-14 £258,950
29 Liberty Close, Warrington, WA5 8DS
A 2018-09-07 £335,000
A 2010-10-27 £290,575
37 Liberty Close, Warrington, WA5 8DS
A 2021-05-21 £357,500
A 2010-12-10 £250,000
51 Liberty Close, Warrington, WA5 8DS
A 2019-10-04 £225,000
A 2009-05-29 £150,000
53 Liberty Close, Warrington, WA5 8DS
A 2017-06-21 £190,000
A 2014-05-29 £173,500
A 2009-12-18 £173,250
55 Liberty Close, Warrington, WA5 8DS
A 2020-11-12 £205,000
A 2009-06-12 £159,000
59 Liberty Close, Warrington, WA5 8DS
A 2019-05-01 £200,000
A 2009-10-21 £158,000
8 Liberty Close, Warrington, WA5 8DS
A 2010-07-15 £222,000
A 2008-06-26 £245,695