Government blasted for lack of support for existing leaseholders

The Government’s response to the leasehold reform consultation has been branded as “incredibly weak” by a lease extension specialist.

Louie Burns, managing director of Leasehold Solutions, said that while he welcomed Government commitments to abolish leases on new-build houses and set ground rents to zero, there wasn’t enough for existing leaseholders.

The Government said it would work with the Law Commission on supporting existing leaseholders, with no further detail, which has also troubled campaigners.

Burns said: “Of course, we would welcome any reforms that actually make the leasehold system fairer for the millions of home owners in England and Wales caught in the web of paying extortionate ground rents, onerous service charges and lease extensions.

“However, the measures announced by the Government are incredibly weak.

“While the offer to abolish ground rents for new leases seems an attractive offer, it actually leaves existing leaseholders in a worse position because it will create a two-tier market, making new-build properties with zero ground rents more attractive, while existing leaseholders will have less chance to sell their homes, as ground rents will still apply to their properties.

“Essentially developers have got off scot-free and existing leaseholders will suffer the harshest consequences.”

Burns said he didn’t believe shared ownership should be exempt from a new-build leasehold ban on houses, as the Government proposes, adding: “We don’t agree that the sale of shared ownership properties necessitates the continuation of leasehold, and that other forms of ownership, such as commonhold, would be preferable.

“Unfortunately, the Government’s announcement makes no mention of commonhold as a viable alternative that is under consideration.

“We are also disappointed that the new measures do not address the flawed valuation models used to calculate the cost of lease extensions and freehold acquisitions, which clearly favour the interests of freeholders and cause distress and financial hardship for many leaseholders.

“Leasehold reform can only be effective if a fair and transparent valuation system is imposed.

“While we welcome the Government’s commitment to support existing leaseholders by working with the Law Commission, in reality the Commission’s project to review unfair terms in residential leasehold is years away from completion, so any positive benefits for leaseholders are a long way off.”

Katie Kendrick, of the National Leasehold Campaign, echoed these views.

She said: “The only way out for leaseholders is to purchase our freeholds. Whilst the Government has announced they will look at a fairer way for us to do this, there is no timescale to this.

“Words are simply not enough – we need action and we need it now.

“It is good news that the Government is working with the Law Commission to bring about legislation to help current leaseholders, but this is years from being implemented and we need help now.”

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One Comment

  1. Mark Connelly

    Oops. Once again government manage to penalise the very people they are claiming to help. No learning from experience for these guys. Just a continual loop of the same old  mistakes

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