Government pledges to tackle leasehold abuses "in the new year"

Housing minister Gavin Barwell says the government will put forward proposals in the new year to stop abuses of the leasehold system.

“The 2016 national leasehold survey showed that 57 per cent of leaseholders either somewhat or strongly agree with the statement: ‘I regret buying a leasehold property.’ That is a pretty sobering statistic” Barwell told MPs.

Leasehold status has received substantial criticism of late as a result of problems inflicted on unsuspecting buyers comes from the automatic increases in ground rent built in to the small print of some long leases. In addition, there are believed to have been growing numbers of disputes regarding the selling-on of leases and issues surrounding redress for leaseholders unhappy with service charges. 

Official figures suggest there are 4.1m leasehold homes in the UK although Leasehold Knowledge Partnership - an organisation campaigning for the rights of leaseholders - suggests there may be in excess of 5.5m such homes.

“We have a strong interest in making sure that the system works as effectively as possible, and we are looking at suggestions for alternative systems” the minister continued. 

Barwell's pledge for future action came at the end of a general debate on leasehold and commonhold reform held yesterday afternoon in the House of Commons, in front of a very small number of MPs still in the chamber on the day before the start of the Parliamentary Christmas break. 

This debate was scheduled by the Backbench Business Committee following a representation from two MPs - Labour’s Jim Fitzpatrick and Conservative Sir Peter Bottomley.

Fitzpatrick, as he opened the debate, summarised the issue with this statement: 

“The length of leases varies from 99 to 999 years. Many people who buy homes under leasehold believe that they are purchasing their property, but they are not; they are leasing it. Because some ground rents double every 10 years, mortgages can be more difficult to secure later in the lease for resale. As for service charges, in the former public sector there have been improvements in recent years, with more transparency of costs and detail to show reasonableness of charges. Previously, constituents of mine have been charged for lifts in blocks with no lifts, and for garden upkeep in places with no gardens. Despite the improvements, however, there are still anomalies.”

Fitzpatrick also brought up the issues of tribunals over disputes regarding private sector leases and service charges. “The costs of high-powered barristers defending freeholders at tribunal is now a disgrace. The procedures were originally supposed to be relatively informal. That has totally changed” he told the Commons.

Around 15 MPs from all parts of the house contributed to the debate, which unanimously expressed dissatisfaction with the current treatment of many owners of leasehold properties.