Yvonne Fovargue MP: So many trapped in leasehold system

7,703 homes have been sold in Makerfield as leasehold since 2010. The Ground Rents Bill would end ground rents for future leases but does nothing for those already trapped in the scandal of spiralling ground rents.

Friday, 3rd December 2021, 12:30 pm
Makerfield MP Yvonne Fovargue

Independent House of Commons Library analysis of Land Registry data shows the scale of the leasehold scandal over the last 10 years.

This is when people buy a house, without also owning the freehold, meaning they often face unexpected, unfair costs with no right of challenge or recourse.

It is a similar picture across the country with 2.2 million homes sold as leasehold since 2010, despite the Government promising for years to reform this arcane system.

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Over 427,000 leasehold homes sold were here in the North West. Labour has accused the Conservatives of being the “party of developers”, who use homeowners as cash cows and donate millions to the Tory Party.

New legislation to reduce ground rents to zero will only apply to new homes, meaning all those who have been sold leasehold homes since the Conservatives came to power will continue to be trapped in this feudal system, and developers will continue to make profit off leaseholders’ ground rents for years into the future.

Ground rent is an outdated practice where some house buyers are forced to pay thousands of pounds each year to a company which owns the land their property is on, with usually nothing in return.

Leaseholders face escalating ground rent charges attached to the ground on which their property sits. Often, they were unaware of this hidden cost at point of purchase.

The competition watchdog the CMA has recently taken enforcement action against four developers - Countryside, Taylor Wimpey, Barratt and Persimmon - which it believes may have broken consumer protection law by writing terms into their leases where ground rents double every 10 to 15 years.

This has left many leaseholders clobbered by spiralling hidden costs and trapped in unsellable homes.

The Government has neglected this issue, leaving homeowners at the mercy of unfair practices for too long. Whilst I support moves to end ground rent for new properties, the Ground Rents Bill which starts its passage through the House of Commons represents a missed opportunity to transform a leasehold sector that continues to scam working people.

The Government has long promised reform, but this Bill is a missed opportunity to help existing leaseholders.

Ministers have the wrong priorities, they should be standing up for this group today, not leaving them behind.

This weekend will see the annual Small Business Saturday event.

According to the Federation of Small Businesses, small enterprises make up 99% of the business population in the UK. Small Business Saturday - celebrates small business success and encourages consumers to ‘shop local’ and to support businesses in their communities.

This year it is calling on the nation to share a ‘big thank you’ with small firms to recognise their vital role throughout the pandemic.

I am pleased that Labour has pledged to cut and eventually entirely scrap business rates, replacing them with a new form of business taxation fit for the 21st Century.

This would support small businesses to rebuild after the pandemic and would level the playing field between online giants and bricks and mortar businesses.

I know that businesses across the borough have faced massive adversity over the last 18 months, and now face further challenges like rent debt, supply chain issues and soaring energy costs. So please visit a small business on Saturday, support them and your local community by buying local.

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