First squawk from the (smaller) house builders

The housebuilders have been very shy to discuss leasehold, with the Home Builders Federation even turning down BBC R4’s hugely influential Today programme when LKP was on.

Taylor Wimpey has said very little; Countryside Properties plc which has been selling doubling ground rents this year, has said nothing at all.

Now there is a squawk: the House Builders Association (HBA) – the housebuilding division of the National Federation of Builders (NFB) – thinks that leaseholds can still be a legitimate model of ownership for housing.

HBA members are the small and medium-sized house builders, who tend to work within a 15-mile radius of their head office.

Rico Wojtulewicz, policy advisor for the HBA, explained how on BBC Radio 5 Live: “An HBA member in Sheffield offers 249-year leases with ground rent charges of £100 annually, increasing then by £100 every 30 years.

“Ground rents can be legitimate for the adoption of roads, sustainable drainage costs, maintenance of common spaces, or lighting on a site. However, there needs to be clarity in the process and fees need to be fair. Value doesn’t end at the point of sale.”

Rather than completely outlawing leaseholds on new-build homes, the Government ought to explore ways to make the system fairer in a manner that works for people, the organisation says.

In fact, ground rents do not contribute to the adoption of roads and drainage. They are invariably for no service whatsoever.

Houses on managed estates whether leasehold or freehold houses pay service charges for these matters, which vary according to the expense required.

Ground rents are simply a levy whose terms are set out in the lease. They are for no service whatsoever.

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