Consumer group says leasehold reform needs to go further

A consumer group for homeowners has taken a strong stance on the Government’s leasehold consultation.

Following plans from the Communities Secretary to ban new build leaseholds earlier this year, a consultation was put forward by the government entitled ‘Tackling Unfair Practices in the Leasehold Market’. Setting out their response, HomeOwners Alliance has stressed that the proposals need to go further.

Aiming to put the interests of the consumer first, the group independent organisation recommended a statutory cap on annual ground rents in order to safeguard leaseholders from unscrupulous practices. The suggested cap would be a 0.1% share of the property, meaning that the maximum would be £300 on a property worth £300,000.

The group are also urging the government to ban ground rents of all new leasehold properties as well as lease extensions in England and Wales. Whilst only formal leasehold extensions are required to be zero at present, HomeOwners Alliance are proposing that this should also apply to those that are informal.

Commenting on the need for change was Paula Higgins. The chief executive of HomeOwners Alliance drew attention to the widely publicised problems that leaseholders have suffered, and the plans put forward by the group aim to alleviate this.

“Many homeowners have suffered outrageous exploitation by increasingly unscrupulous freeholders. We obviously welcome the fact that the government has accepted our proposal to ban the sale of leasehold houses. It is good the government is up for reform to end the injustice, but malpractice by freeholders is so widespread that the government needs to be prepared to be radical – the time for tinkering is over.”

Their full response can be accessed here.

Today's Conveyancer