The Competition and Markets Authority was given LKP’s insight into the leasehold houses mis-selling scandal yesterday.
The meeting was hosted by LKP patrons and APPG co-chairs MPs Sir Peter Bottomley and Jim Fitzpatrick and Justin Madders, the deputy APPG chair on leasehold reform.
Mr Madders, a solicitor, has spoken out many times about the mis-selling of leasehold houses, of which he has an abundance in his Ellesmere Port and Neston constituency.
The Competition and Markets Authority term were:
George Lusty – Senior Director, Consumer Enforcement
Simon Jones – Director of Litigation and Project Director for Leasehold
Niki Sharp – Assistant Director, Consumer
Gill Street – External Relations
LKP told the CMA that developers gaming the leasehold system had blighted lives and introduced toxic leases in to the housing market.
None of the secretive developer-initiated redress schemes adequately address the issues, with RPI variations to ground rents barely less scandalous than the 10-year doubling ground rents that opened the scandal to public concern.
There was discussion about the Persimmon out of court settlement in the action initiated by Trading Standards in Cardiff, where Persimmon offered leasehold house buyers their freeholds and reimbursed ground rent that had been paid.
This initiated an email dump last week to the CEOs of plc house builder firms by the National Leasehold Campaign demanding that the same is done by others across the country.
We also highlighted the lack of consistency over freehold valuations, with plc house builders telling MPs that the difference in value between a leasehold house and a freehold house was around £3-5,000.
This completely undermines the arguments of the freehold owning speculators who have spent a fortune in the courts and with “professional” witnesses to argue up freehold valuations considerably.
So what a developer might value at £6,000 becomes £30,000 once it is transferred to a ground rent speculator, invariably anonymous and hidden offshore.
The CMA were also told that many desperate leaseholders had had to extend their leases paying these sums in order to move on with their lives.
Pensioner Trevor Nowell, 81, paid £42,000 to extend his lease and end the ground rent on his Taylor Wimpey house at Oakdale Drive, Whalley, Clitheroe.
Mr Nowell paid up the money to the secretive fund E&J Capital Partners, based in Winchester.
Because he paid up, he is ineligible for any help from Taylor Wimpey, which dumped him in a property with toxic lease terms in the first place.
Pensioner paid £38,000 for Taylor Wimpey freehold to ground rent speculators E&J Capital Partners
The CMA was told of ambulance chasing law firms signing up desperate leaseholders in professional negligence actions against their conveyancing solicitors. This will be a cherry-picking exercise, with only the best cases advanced – often with untransparent processes by the law firms.
LKP is aware of 17 successful settlements against developers’ stooge solicitors who so dismally failed to represent the buyers’ interests.
At Sir Peter’s insistence, LKP was asked to pass on the details of the Martin Paine leasehold activities, as background to the investigation.
Related posts:
Competition and Markets Authority cannot investigate leasehold mis-selling because of Brexit, Brokenshire told
Competition and Markets Authority relies on skimpy MORI poll of 1,050 for its report on leasehold management
Competition and Markets Authority issues update on leasehold study
STOP Selling new build leasehold houses demands Leader of the House of Commons
BBC R4 MoneyBox hears that a CMA mis-selling ruling could see leaseholders suing plc house builders. Hope so!
South Somerset council enters the ‘fleecehold’ racket
I bet the CMA were shocked and appalled by it all. Well done LKP for your efforts and to Justin, Jim and Sir Peter. Great work!
Excellent all at LKP
The uncovering of the depth of the Leasehold Housing Scandal revealed by the National Leasehold Campaign led by Katie Kendrick, Jo Darbyshire and Cath Williams has provided another nail in the coffin of The Leasehold Exploitation Scandal and uncovered the possible Cartel that is The House Building Industry.
What house buyers may not be aware of is the Developers such as Persimmon, are no longer the builders they use Sub-Contract Gangs only. The House Building Industry was decimated in 2008/09 when the Big Banks Failed and those who managed to survive purchased the smaller firms who had gone under.
The industry is now run by many hundreds of Sub-Contract Companies who travel the country building houses for sale. The largest Developer is now Persimmon and five others who became the backbone of the House Building Industry:-
Barrett
Taylor Wimpey,
Bellway,
Redrow,
Bovis
How were House Buyers duped as the first port of call would be one of those below:-
Advert on the telly (remember the Oak Tree and Barrett Homes)
Newspaper Advert
Estate Agent Window
Site Visit to speak to Sales Staff
Site Visit to check out Show Home
Sales Staff would have been trained to sell houses, similar to Used Car Salesman who once informed me the car I purchased had been very well looked after and was owned by an elderly person who owned a Wool Shop.
Sales Staff would have been given basic training to sell the concept of owning a new build home and would not be a professional in the sense of the next step if they wished to purchase would be the Professional Conveyancing Solicitor (CS) who in many cases were suggested by the Sales Staff, following their training.
These CS may have had direct links to the Developers would provide the information regarding Freehold/Leasehold. Failure to do so and the provision of false information is Fraudulent by Deception and this is where to start to uncover the facts behind the links of the Developers, Sales Staff and Conveyancing Solicitors as all benefit from the sale.
Thanks to you all for putting the leaseholder’s and fleeceholder’s case to the CMA. We can tell our own stories but to have you all speaking out on your findings and proof of what’s been happening and the repercussions is fantastic !
Thanks so much. It is fantastic that leaseholders have such strong support from LKP and Sir Peter, Jim and Justin. I’m sure you will have presented evidence based and rational arguments as to why this really is a scandal and so much more must be done to help leaseholders. Now it is time for the CMA to build on the hard-hitting Select Committee Inquiry report and force developers to do the right thing and provide full redress for mis-selling. I am particularly reassured that you have reiterated that RPI leases are also onerous and do not solve the issues of saleability or mortgageability for thousands of leaseholders. Mortgage lenders continue to tighten lending restrictions and the NLC year daily from leaseholders struggling to sell.
Justin Madders MP , should introduce a new bill allowing the leaseholder of a leasehold house to purchase the freehold title by paying 10 x annual ground rent.