Leasehold and Commonhold Reform — House of Commons, 2016-12-20
Topic: Housing
Justin Piers Richard Madders (Labour, Centre-left): Yes, any new houses. But that does not help my constituents, who believe that they have been comprehensively stitched up. That is why this place has to take action At the moment there is no way out of this for my constituent. She recently inquired about purchasing the lease and discovered that it has been sold to a company called E&J Estates, which is now quoting her a price of £32,000 to purchase it. No wonder it quoted a price over 10 times what she had originally been offered, given what it could rake in over the years. However, having already made significant commitments to purchase the property in the first place, my constituent was simply unable to stump up such a significant amount As disappointing as the response from E&J Estates was, it was a struggle even to get a response from it at all. It initially refused to speak to my constituent about her circumstances, stating that it had a "long-term interest in the property." Well, so does she: it is her home. And it is a home that has been saddled with an obligation so onerous, so outrageous, that nobody with an ounce of decency in their body would not say that this place had better do something about it It is not enough to say that leasehold valuation tribunals are there to resolve these issues, because these companies are going out of their way to obstruct and delay the process. I do not know whether anybody here has taken the time to read one of the tribunals’ decisions, but I suspect that very few people would feel comfortable going into one of them without a lawyer, and probably also a surveyor. Certainly the freeholders seem to do that, and from what I have seen they also put the cost of their representation back on to the homeowners as well, rubbing salt into an already very expensive wound Although I have named Bellway and Taylor Wimpey, the practice of selling new builds on a leasehold basis appears to be commonplace across the majority of new build estates in my constituency. I should make it clear that the examples I have given of how my constituents are adversely affected do not apply to every developer selling leasehold properties, although every developer I have contacted has indicated that they intend to sell on their interest in the leasehold at some point. That really is where things go wrong, because once they sell them on, the new owners have no interest in anything other than extracting the maximum amount of profit from their asset Of course I accept that some properties by their nature lend themselves to being leasehold, but that does not apply to the vast majority of the properties being built in my constituency, which are detached or semi-detached family homes. There really is no reason for those properties to be sold as leasehold. It is a cynical business decision, which will in the long run damage the reputation of those involved It is also disappointing that the newest development in my constituency, currently being constructed by Redrow Homes, is also being sold on a leasehold basis. Redrow tells me that this fact is made known to purchasers before they reserve their property, although I note that on its website the promotion of that particular development makes no mention of it. What is particularly disappointing is that Redrow, despite my asking twice why it feels the need to sell large detached family homes on a leasehold basis, offers no justification whatsoever It is quite clear that this situation needs to be addressed. I have several questions for the Minister. My first is very simple: are the Government happy with this state of affairs? If not, will he set out today, or in the very near future, exactly what he will do to stop these scandalous practices? Does he agree that developers should be prohibited from recommending a particular solicitor to purchasers because of the clear potential for a conflict of interest and the clear failure, as we have seen here, to provide the best advice Will the Government consider legislating to prevent ground rents being doubled every 10 years? Will they intervene to give some hope to those now saddled with the eye-watering commitments that nobody—not the developers, not the lawyers and not the Government—warned them about? Will the Minister consider withdrawing and recouping taxpayer subsidies to any development found to be ripping off householders in this way? Will the Government ensure that there is greater transparency at every stage of the process, with purchasers receiving clear information about the arrangements they are entering into Finally, I would like to pass on the following message to anyone listening today. If you are looking to buy a new home built by Taylor Wimpey, Bellway or any other developer, look very carefully at the terms that are offered and ensure that you receive independent legal advice. My message to the developers themselves is to act transparently and offer leasehold only where it is strictly necessary.