Kim Snape Labour’s Parliamentary Candidate for South Ribble constituency hails ‘justice for leaseholders’ with new plans to cap excessive property fees and save home-owners thousands of pounds
Kim Snape Labour’s Parliamentary Candidate for South Ribble constituency today backed new plans to bring justice to constituents affected by the leasehold scandal. A Labour report released today includes proposals to cap unfair costs such as ground rents, investigate misselling and save local leaseholders thousands of pounds.
Leasehold ownership, most commonly found in flats, means purchasing a home for the duration of a long lease rather than owning it outright. Homeowners who purchase a leasehold property are often faced with extortionate charges in the form of ‘ground rents’ or service charges and locked into restrictive contracts which were not properly explained.
New figures today show an estimated 13.53% of homes in South Ribble constituency were sold as leasehold last year. Reforms to leasehold promised by the Conservative Government have still not been implemented, two years after they were first proposed.
Kim highlighted the Government’s failure to ban the sale of leasehold houses, despite promising to do so following the ground rents scandal which left 100,000 homeowners in a property they can’t sell. Today’s figures show an estimated 10.58% of houses sold in South Ribble constituency last year were sold as leasehold.
The plans, set out in a consultation today by Labour’s Shadow Housing Secretary, John Healey MP and Shadow Housing Minister, Sarah Jones MP, include a ban on the sale of new leasehold houses and flats. Leaseholders will be able to buy the full, freehold ownership of their home for 1% of the property value, with ground rents in existing leaseholds capped at 0.1% of the property value, up to a maximum of £250 a year.
Labour’s proposals mean the average household in South Ribble constituency would see their annual ground rent capped at £173, with the cost of buying their freehold reduced to just £1,725 – according to analysis published by Kim Snape today.
Other proposals set out by Labour today include:
- A crack down on unfair fees and contract terms, and a right to challenge unfair fees or poor service.
- New rights to empower leaseholders to hire and fire their managing agent, or to take over management of their homes themselves.
- A promise to revitalise commonhold: an alternative to leasehold – forms of which are used successfully across the world.
The report also renews Labour’s calls for a full public inquiry into mis-selling in the leasehold market which saw thousands of properties sold with extortionate terms such as doubling ground rents, making them unsellable.
Commenting, Kim Snape said:
“This issue is regularly raised by residents with me. I see this as a big step forward in addressing a very important issue for many residents and their families across South Ribble.”
Sarah Jones MP, Labour’s Shadow Housing Minister said:
“Leaseholders have everything stacked against them. Too often they suffer extortionate fees, appalling service and restrictive contract terms, and no way to easily challenge them.
“England is one of the only places in the world which has failed to move away from this feudal system. Across the world, modern alternatives like commonhold have flourished.
“Labour will improve and revitalise commonhold for flats, and make freehold mandatory for all new houses, as the Conservatives should have done years ago.”
Notes:
Included constituency data. DOWNLOAD HERE: https://drive.google.com/open?id=1E0FhhJQgbkrZe-e1_29O7DreVPCCnzSo
At least 4.3 million homes across England are owned on a leasehold basis, with many leaseholders facing exploitative ground rents, onerous contract terms and arbitrary fees paid to their freeholder.
These changes will up-end the current rules disadvantaging leaseholders, which stretch back to the middle ages. For a property in England priced at £250,000 with a 90 year lease, Labour’s proposals could mean the cost of buying the freehold is slashed from over £10,000 to £2,500 – a saving of almost £8,000, plus expensive legal fees.
Labour’s consultation document ‘A new deal for leaseholders’ is published today and available here: http://www.sarah-jones.org/wp-content/uploads/sites/17/2019/07/12506_19-Labours-New-Deal-for-Leaseholders-document.pdf
To end leasehold and ensure no leaseholder is left trapped against their will in this broken system, the next Labour Government plans the following five radical changes.
- End the sale of new private leasehold houses with direct effect and the sale of private leasehold flats by the end of our first term in Government.
- End ground rents for new leasehold homes, and cap ground rents for existing leaseholders at 0.1% of the property value, up to a maximum of £250 a year.
- Set a simple formula for leaseholders to buy the freehold to their home, or commonhold in the case of a flat, capped at 1% of the property value.
- Crack down on unfair fees and contract terms by publishing a reference list of reasonable charges, requiring transparency on service charges and giving leaseholders a right to challenge rip-off fees and conditions or poor performance from service companies.
- Give residents greater powers over the management of their homes, with new rights for flat-owners to form residents associations and by simplifying the Right to Manage.
For further comment contact Kim on 07868 327395 kim@kimsnape.org.uk
