On 14th November Liverpool City Council met and considered leasehold housing and have asked the Mayor to write to SoS Brokenshire to express their “severe dissatisfaction” with the government and their failure to do more to help thousands of leaseholders burdened with onerous lease terms and administration fees.
Liverpool Council agenda is unequivocal
Those at the meeting heard some very interesting things but those can wait until the official minutes published – the agenda is clear enough
http://councillors.liverpool.gov.uk/ieListDocuments.aspx?CId=305&MId=16818
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Fair Deal for Leaseholders by Councillors Kimberley Berry and Sharon Connor
This Council expresses its severe dissatisfaction with this Government’s failure to adequately regulate the sale of leasehold properties within the UK, and tackle the onerous terms of existing leases.
It notes its concern for the financial burdens suffered by homeowners, due to unregulated developer practices, and the unacceptable terms of leases.
It notes concern for residents, who find themselves unable to sell their homes, except for a considerable discount, following the public’s increasing awareness of the struggles affecting leasehold homeowners.
It welcomes pledges to address the matter; however, expresses frustration regarding the extent of this Government’s plans, and its commitment to support those already affected by unfair practices, and charges.
This Council resolves that this Government takes urgent action to address:-
- a) The soaring ground rent charges that existing leaseholders are obliged to pay to developers, or the companies to which the freehold has been sold;
- b) The disturbing practice of freeholders selling the freehold to third parties, without the knowledge of the existing leaseholders, and without first offering the leaseholder the option of purchasing the freehold;
- c) Increasingly unaffordable estate maintenance charges levied against the leaseholders, and spiralling costs;
- d) The unclear, and in many cases, excessive cost of the purchase of freeholds by leaseholders;
- e) The unfair systems of administration charges imposed via the lease, to the hindrance of (for example) leaseholders who wish to make alterations to the property;
- f) The actions of freeholders who continue to claim administration fees, following transfer, through the wrongful practice of including restrictive covenants in transfer deeds, to in an attempt to replicate these shameful terms of the lease.
- g) The requirement of existing leaseholders to have owned the lease for a minimum period, before being eligible to purchase the freehold;
- h) The lack of advice and adequate compensation schemes available to leaseholders who believe they have been miss-sold, and/or their lease contains onerous conditions.
The Council requests that Mayor Anderson writes to the Secretary of State for Housing, Communities and Local Government, to express its concern regarding the above issues, and request further, pressing action is taken to not only to restrict the development of further leasehold homes, but to provide appropriate support and means of redress for existing leaseholders.
Perhaps it time for the Secretary of State to ask himself do LKP the NLC and Liverpool council know a something different to the freeholders and developers who use smooth words to tell the government and the MHCLG Select Commitiee this is just a tiny problem.
In written evidence to the MHCLG Select Committee
Taylor Wimpey claim “Between 2007 and 2011 Taylor Wimpey sold some leasehold homes with ten-year doubling leases.”
Wallace Partnership Group claims “We believe the number of onerous (by which we mean a rent that doubles more frequently than every 20 years over the life of the lease) leases in existence to have been vastly overstated by the media. Our own portfolio of c. 107,000 leases contains 1% by rent and 0.4% by number of such leases.”
Consensus Business Group claim “As can be seen from the figures set out in Appendix 2, the number of 10-year doubling rent review leases acquired comprises a small proportion of our estate at 1.4% by units and 2.8% by rent.”
Long Harbour claim “ As part of our research throughout this process, we have been working with the specialist property law firm, Winckworth Sherwood LLP, to ascertain the actual quantity of ‘10 and 15 year doubling’ leases in the market. The reality is very different to what has been reported: there are in the region of 12,000 of these leases, out of a total of 4.5 million leasehold properties in England and Wales. This equates to less than 0.3% of all leaseholds.”
Mainstay state “We would urge the Commitiee to insist the Law Commision must be presented with a fair and accurate assement of the market in order to ensure that solutions are proportionate to the scale of the problem”
Emma Hynes
Excellent points and accurately outlines the leasehold scandal. There was no need for this to happen. Developers got greedy and exploited loopholes in the law at the detriment of their customers.
Richard
It is a real shame that a Council understands, yet the second minister appointed to address the issues has done nothing and even acts as if he doesn’t understand what the problem is. Living in his own detached from reality BUBBLE.
Joe
I have heard Housing Minister Brokenshire talk more about Brexit than housing.
Poor quality new builds, rip off service charges, ground rents and unfair leases are not sexy enough issues for most MPs or housing ministers. Raab couldn’t get away from the housing brief fast enough and the same goes for Brokenshire.
Martin
Interesting to see the attempts by freeholders to play down the doubling ground rent issue by claiming they are only a tiny part of their portfolios. Bit of an own goal, I would say. Surely an open invitation for the Government to legislate to deprive them of these oppressive freeholds, and to meet any challenge in the courts with the defence that it has only a minimal effect on them, by their own admission.
chas
Martin excellent point and well put.
This aside the main problems with Retirement Developments has never been excessive Ground Rents, but when the Landlord and Managing Agent (MA) are from the same organisation. We have MA who are trying to remove the Residential House Manager (RHM) from Firstport Retirement Developments and sell of the RHM Flats.
We recently had been asked by our AM if we would consider selling our flat to Girling’s. It is no surprise that a Director of Girling’s was also a Director at Flatlaunch and I believe also Peverel now Firstport.
This close linked MAs makes complaining and receiving justice almost impossible unless the facts behind these companies are out in the open.
Michael Epstein
Chas,
When being asked about any sale of the house manager’s flat to Girlings did anyone declare any commission(or incentive) they would receive if such a sale went ahead?.
Did anyone reveal any targets set for the sale of house manager flats?