Nigel Evans Welcomes Leasehold Reform

Nigel Evans, MP for the Ribble Valley, has welcomed the Government’s new proposals to bring an end to leaseholds on new-build homes. On Tuesday Communities Secretary, Sajid Javid, unveiled the plans, which include measures to close legal loopholes to protect leaseholders who could potentially face possession orders, as well as altering rules on Help to Buy equity loans which would mean they could only be used for "new built houses on acceptable terms".

 

The Leasehold Knowledge Partnership – a group that is tackling the issue head on - has previously stated that leasehold new-builds are most common in the North West, this includes several development sites in the Ribble Valley. The leasehold scam, which has been dubbed the “PPI of house-building”, means that owners of new-builds are subject to a yearly charge which doubles every ten years until the 50th anniversary of the lease – effectively making homeowners pay £10,000 per year for a property they legally own, rendering their home unsaleable.

 

Developers will sell the lease to a third party, who will often enforce punitive measures on property owners, in many cases charging homeowners to make minor adjustments to their properties. Leasehold agreements have traditionally applied to flats and apartments, where owners do not own the land on which their home is built, now, over one million Brits own houses on a leasehold basis which is being used as an additional income stream for developers.

 

Sajid Javid said of the leasehold scam: “"It's clear that far too many new houses are being built and sold as leaseholds, exploiting home buyers with unfair agreements and spiralling ground rents. Enough is enough. These practices are unjust, unnecessary and need to stop.”

 

The welcome announcement came after Nigel Evans raised the important issue during last Thursday’s general debate, speaking from the main chamber, Mr Evans said: “People are being recommended solicitors by these builders who then, funnily enough, do not point out, or indeed emphasise, the fact that groundrents double every ten years for the next 50 years. It is an absolute scandal.”

 

Mr Evans, who has been involved in combating the scandal since he was first contacted before the new year continued: “This is blighting the properties that people are now trying to sell…some building societies will not touch them or lend anybody money to buy them. Even worse, when people are about to buy a property, they are told they can buy the freehold later on, and when they get to this point, they are expecting to pay £4,500. They were told that the leases had been sold on to another company.”

 

In one case, a Ribble Valley couple were made to pay £38,000 to buy their freehold from a third party, E&J Estates, just months after being sold by Taylor Wimpey for £7,000. There will be a consultation period to ensure the proposals address all the concerns of consumers.

 

Eager to guarantee that homeowners who have already fallen foul to the scam, from Westminster Mr Evans said: “Whilst I am thoroughly pleased with the proposals announced today, it is absolutely crucial that every homeowner who has been subject to the leasehold scam is given the opportunity to buy their freehold at the original price, regardless of whether they have been sold to a third party. I will continue to pressure for reform in this area which will retrospectively assist those affective.”

 

The proposals also include looking at introducing measures limiting ground rents in new leases to start and remain at a ‘peppercorn’ level, asking how the government might respond to the challenges faced by existing leaseholders with onerous ground rents, and what can be done to help give freeholders the same rights enjoyed by leaseholders when it comes to challenging unreasonable service charges.