Justin Madders MP is asking Redrow why it has decided to cut the price of freeholds to leasehold houses at Ledsham Garden Village in Ellesmere Port in Cheshire from £6,500 to £4,000.
And what about those who have already paid too much, asks the Labour MP for Ellesmere Port and Neston, who is also co-patron of LKP and co-chair of the All-Party Parliamentary Group on leasehold and commonhold reform.
Mr Madders raised the issue with Redrow MD Jason Newton in April 2021, but received no explanation.
£6,500 represents 26x the annual ground rent of £250, while £4,000 is only 16x.
“Those who have already purchased their freehold feel aggrieved that had they waited, a lower price would have been possible despite every indication that had they not purchased then, the freeholds would be sold.”
Mr Newton replied that the new, lower prices were the result of a “market test”.
“We could have written to residents and then immediately transferred the freeholds to a third party. However, that would not be in keeping with the transparent and open way we’ve handled this issue from the outset. And no doubt that approach would have been subject to criticism,” Mr Newton replied.
“As part of the re-tender – prior to transferring the freeholds to a third party – another market test has been carried out which has set the freeholds at a lower value. Again, at this point we could have transferred the freeholds to a third party without further discussion.
“We’ve reflected the lower value in the latest offer to customers. In any market – house prices included – it’s widely accepted that prices do not stay the same and can go up and down. The fact we’ve waited two years before transferring the freeholds has clearly been at our own commercial disadvantage.”
Last week the National Leasehold Campaign orchestrated an email dump on the CEOs of plc housebuilders following the Competition and Markets Authority enforcement action over mis-selling and consumer rights laws impacting both Persimmon and ground rents investor Aviva.
Redrow executives who responded to leaseholders’ emails pointed out that the company was not part of the CMA investigation – even though Redrow has sold properties with aggressively doubling ground rent terms and joined in the leasehold houses bandwagon.
In March 2017 Mr Madders and LKP joined demonstrators of the newly formed National Leasehold Campaign to protest the sale of ordinary houses with leasehold tenure for no good reason except the income streams that could be attached to them.