While Scotland has abolished the building of leasehold properties, approximately 4 million people in England are trapped in lease agreements and are concerned about the frailties of their home ownership. Labelled by many as the PPI of the housing industry, a recent study has found that approximately 100,000 lessees are tied into contracts with spiralling ground rents, paying around £4bn in service charges.
Last year, the communities secretary, Sajid Javid vowed to free leaseholders from ‘feudal’ leasehold practices and the government has said in a recent statement that it is "unacceptable for homebuyers to be exploited through unnecessary leaseholds, unjustifiable charges and onerous ground rent terms".
To appease an ever-growing campaign for leasehold reform in the UK, the Government has proposed a ban on the sale of leasehold properties. However, despite a consensus that action must be taken to address the growing number of leaseholders exploited by freeholders, activists have rightly appealed that such reform does not help the thousands of lessees trapped in existing rip-off leases and many are calling on the Government to do more, sooner.
Sebastian O'Kelly of the Leasehold Knowledge Partnership says: “My appeal is to the MPs on the Communities Select Committee to call in these housebuilders, the chief executives who are on ridiculous remuneration packages, one getting a bonus of £120m for example, and call in the chief executives of the ground rent funds.”
He continues, stating: “...These people hold the destiny of millions of people's lives in their hands and they've seriously disadvantaged them with these rip-off leases.”
The Ministry of Housing, Communities and Local Government has announced that leasehold reforms and new measures "to cut out these unfair and abusive practices" are expected to come into force in 2019.
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