Recently, there's been an increasing problem with unscrupulous builders selling newly built homes as leasehold properties in order to squeeze yet more profit out of householders.
Over the last few months, many of my constituents have complained to me about this. As those who have contacted me will know, I have raised these concerns with the Government on several occasions, as well as with Liverpool and Knowsley Councils.
Whilst leaseholds are necessary in the case of apartments within a block, where provision has to be made for maintaining common parts such as landings and corridors outside of the ownership of any one household, there is no reason that new houses cannot be sold as a freehold. Instead, new home owners are being ripped off as their free holds are sold on to companies intent on extorting unreasonable ground rents and fees out of homeowners for years to come. It is a scam and a rip-off. Often, householders cannot even buy themselves out of the situation as the cost involved in purchasing the freehold means it is not realistic.
I therefore welcome the Government’s eight week consultation to outlaw this unjustified exploitation which includes proposals to ban the sale of new houses as leaseholds and to reduce ground rents on flats to zero. These are important and necessary changes which will mean no more people are hit by this scam.
However, I believe these legal changes should go further to address the problems faced by existing leaseholders. Indeed, I believe that the Government should act urgently to amend the law to ensure that existing leaseholders can no longer be financially exploited by developers who own the freehold. The Government can – and should – consider legislating to ensure that leases which operate on unfair terms and with disproportionate charges can have the unfair contract terms removed.
I want to assure all those who have taken the time to write to me that I will continue to monitor this issue carefully, and I will be writing once again to the Government to urge them to consider these additional proposals.
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