Government urged to legislate to protect home owners from ‘spider’s web of leasehold’

The Government is being urged to legislate to support leasehold home owners rather than leaving them to rely on legal action.

Louie Burns, of Leasehold Solutions – which advises on extending leases and buying freeholds – called on the Government to tackle abuse in the sector, rather than leaving individuals to do it themselves.

He said: “Developers are quick to advise leaseholders that they should simply sue their solicitors if they were not given adequate advice, but this can be very costly for leaseholders who are already struggling financially.

“Shockingly, leasehold houses are not covered by the 2015 Consumer Protection Act, so leaseholders have no legal recourse. It is absurd that consumers have more legal protection when they buy a new toaster than when they purchase a leasehold property.

“We are calling on the Government to change legislation to stop the continuing abuse in the leasehold sector.

“The Government has tabled a raft of potential legislative changes and we urge them to provide legal protection for people who find themselves caught in the spider’s web of leasehold.”

His comments came in response to research from NAEA Propertymark that showed the majority of those who have purchased leasehold houses in the past decade now regret it, while two thirds feel they have been misled.

Burns urged leaseholders to take part in the Law Commission’s forthcoming consultation on reform, adding: “For too long freeholders have simply denied the many problems evident in the leasehold system, but the NAEA’s report is a damning verdict on the role of developers and freeholders in causing and perpetuating the leasehold houses scandal.

“Often consumers have little choice but to buy leasehold properties, which can appear to be cheaper than freehold properties at initial purchase, but which quickly become an ongoing financial burden for the consumer, and a cash cow for developers and freeholders who can exploit their tenants for decades through ground rent, service charges, lease extensions and fees for property alterations.

“This is truly a scandal and the Government needs to take urgent, robust action to ensure that leaseholders are protected from such abusive practices.”

Meanwhile, The Property Ombudsman appeared to make a play for the sector, implying it would take new-build sales into its remit.

Katrine Sporle, The Property Ombudsman, said: “The (NAEA Propertymark) findings are stark and this scandal is one that needs to be sorted.

“New-build homes are not currently covered by an ombudsman which means many consumers who feel like they were mis-sold, or are facing issues, have nowhere to go to seek redress.

“With the Government currently looking to strengthen consumer redress in the industry, we urge them to include new homes in order to provide a better housing market for all.”

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