Southport's Labour Candidate Liz Savage has backed local home-owners feeling ripped off by leasehold contracts and calls for a government inquiry into the scandal of missold leasehold houses.

Latest figures available reveal that of nearly 47,000 new build homes in the North West sold as leasehold between 2010 -2017, 63% of them were houses not flats. Staggeringly, the North West also made up nearly exactly the same percentage of the total number of new build houses that were sold as leasehold nationally during the same period.

The arrangement, which is traditionally most common for flats, means homes are bought but also leased rather than entirely owned, with leaseholders often paying a ‘ground rent’ as well as service charges to the property freeholder, or to a managing agent acting on their behalf.

Homeowners who purchased the leasehold of their property are often locked into contracts forcing them to seek permission to make basic alterations or to build extensions such as conservatories, even if no local authority planning permission is required.

Some leaseholders find they’re obliged to pay extortionate ground rents, while others are locked into rip-off service charges. Many didn’t choose their own solicitor and feel they were poorly advised when purchasing their home.

Southport Labour's Liz Savage says with numbers rising nationally and over 29,500 new build houses sold as leasehold in the North West since 2010, it's time for an inquiry into what she believes is yet another mis-selling scandal:

"Leasehold for houses is little more than a con trick as far as I'm concerned. There's no justification for it and I think it's little more than a way of duping unsuspecting home-owners out of more cash and possibly even their home."

"Leasehold for flats is perhaps more understandable when there is shared occupancy and responsibility but it still needs to be made clear when purchasing what it entails. For houses though it makes no sense at all; it isn't expected or understood and it needs to stop."

Survey data suggests almost six in ten leaseholders didn’t understand what being a leaseholder meant until they had already purchased the property, and more than nine in ten leaseholders regret buying a leasehold property at all. A total of 4.3 million properties across England – almost one in five of all homes – are now classified as leasehold.

In the House of Commons this week, Labour’s Shadow Housing Secretary, John Healey MP, challenged government ministers to set up an inquiry into the mis-selling of leasehold homes, saying:

“Leaseholders find they’ve bought their home but still don’t own it, and many feel ripped off by unfair leasehold contracts. This is a national scandal but the Government’s action to date has been too weak, too slow and has overlooked the plight of existing leaseholders."

"Ministers must act to back an inquiry into this systematic leasehold misselling, as with other misselling scandals like pensions, endowment mortgages and PPI

Thousands of home owners across the North West have faced the same leasehold issue for a great number of years, many bought their leaseholds over. Surely the new home owners were aware of this issue when they purchased their properties - everyone else is aware of those policies for new houses, it has been going on for many years now - how come the new home owners claim they did not know, and why is it that Labour decide to bring it to attention now?

Originally Posted by said

Thousands of home owners ... now?

... it's the relatively recent rise in the number of houses that are being sold with leasehold attached that's the problem, especially as folks don't expect it on a house and there is no apparent reason for it & if you actually look at the figures instead of just adopting your usual anti-Labour stance and spouting, you'll see it's actually relatively rare across the rest of the country but a real problem in the North West... so I'd disagree that "everyone" is aware of these policies for new houses.

Originally Posted by Gwhizz

... it's the relatively recent rise in the number of houses that are being sold with leasehold attached that's the problem, especially as folks don't expect it on a house and there is no apparent reason for it & if you actually look at the figures instead of just adopting your usual anti-Labour stance and spouting, you'll see it's actually relatively rare across the rest of the country but a real problem in the North West... so I'd disagree that "everyone" is aware of these policies for new houses.

The only people needing to be aware are the potential buyers. If they can prove their Conveyancer did not bring the leasehold to their attention prior to exchanging contracts they will have a valid claim for compensation from the Conveyancing firm. IF they can prove it.

My money is 100% either ignored or didn't understand what it meant when told.

Originally Posted by Gwhizz

... it's the relatively recent rise in the number of houses that are being sold with leasehold attached that's the problem, especially as folks don't expect it on a house and there is no apparent reason for it & if you actually look at the figures instead of just adopting your usual anti-Labour stance and spouting, you'll see it's actually relatively rare across the rest of the country but a real problem in the North West... so I'd disagree that "everyone" is aware of these policies for new houses.

Quite right! It is rare in other parts of the UK, but certainly not in the North West - it is common knowledge and has been for the best part of a century. There are estimated four million leasehold homes in the UK. It is not so much the ground rents that are the problem, it is the charges tagged on to those ground rents which the owners demand that is. One woman wanted to own a dog in one of the new properties - the ground rent holder charged her £250 to do so. Someone else built a conservatory on to their new house and had to pay an additional £1600 for the privilege. Such charges as these have never been requested before.

First thing anyone buying a new house should ask the sales agents is, is the property Leasehold, Freehold with a chief rent or Freehold. You should ignore the first too and walk away. Similarly choose your own solicitor not the sales agents recommend one.
Freehold with chief rent can be bought outright for a price, get that in writing.
It is time that this feudal system was ended. Governments of both colours have ignored this ripoff.

Originally Posted by said

Thousands of home owners across the North West have faced the same leasehold issue for a great number of years, many bought their leaseholds over. Surely the new home owners were aware of this issue when they purchased their properties - everyone else is aware of those policies for new houses, it has been going on for many years now - how come the new home owners claim they did not know, and why is it that Labour decide to bring it to attention now?

There is the problem, only 2% of buyers were aware that the property was subject to a lease and to date none were aware that the lease could then be sold on to finance companies who then put in place escalating ground rents, conditions which meant that the home owner could do nothing without permission, usually a fee to the leaseholder, the total injustice is that buyers bought their properties with one set of conditions in place, to then find that the lease could and was sold on without their knowledge and a new set of terms put in place.

The extent of the problems only became apparent last year as the first escalating ground rents came into play, the above info comes from a report only published in July 2018, not a long term situation at all.

One particular case highlights the whole stinking situation, couple bought their new home direct from the developers along with a 999 year lease and a nominal ground rent, now they are stuck with a rapidly escalating ground rent, can't do anything to their home without permission and their home is unsaleable as no one will grant a new mortgage to a buyer on the property.

Interestingly the whole racket is being looked at closely as much of the fiddle is in contravention of current laws, with any luck developers, conveyancers and solicitors could find themselves facing criminal charges, as per usual the finance sharks while being totally unethical have not broken the law.

So will Liz be campaigning outside the sales offices for the new houses being built around Southport ?

Originally Posted by silver fox

One particular case highlights the whole stinking situation, couple bought their new home direct from the developers along with a 999 year lease and a nominal ground rent, now they are stuck with a rapidly escalating ground rent, can't do anything to their home without permission and their home is unsaleable as no one will grant a new mortgage to a buyer on the property.

So they knew it was Leasehold and likely to have conditions attached - which they could easily have checked pre purchase - and they still bought it.

and now they complain ...

Originally Posted by Coastal99

So they knew it was Leasehold and likely to have conditions attached - which they could easily have checked pre purchase - and they still bought it.

and now they complain ...

In this particular case, yes the buyers were aware of the lease, but they bought under one set of terms only to have the lease sold on and a new set of terms applied without their knowledge or involvement in any way.

Easy to criticise the buyer, but they most certainly were not aware of what could actually happen with the lease, while equally certain the developers and financiers knew exactly what the intent was .