One of the biggest campaign groups calling for leasehold reform has welcomed the action taken by the Competition and Markets Authority (CMA) with regards to onerous ground rents.
We reported yesterday that the CMA had reached a formal agreement with Countryside Properties, one of the UK’s leading housing developers, to ensure leaseholders will no longer be subjected to ground rents that double every 10 or 15 years. Countryside also confirmed to the CMA that it has stopped selling leasehold properties with doubling ground rent clauses.
And now the National Leasehold Campaign (NLC), which was founded in 2017 and now boasts more than 22,000 members in its Facebook group, has said it’s a further step in the right direction to ensure leaseholders are adequately protected.
“We are delighted that Countryside are the next domino to fall in this whole sorry saga of doubling ground rents,” NLC founder and spokeswoman Katie Kendrick, a children’s nurse from Ellesmere Port, said.
“Today’s announcement will help those that bought leasehold properties from Countryside escape onerous ground rents that make their homes unmortgageable and unsellable. We sincerely thank the CMA for their continued progress in holding big developers to account for their part in this scandal.”
However, she added that ground rents are only one of the pitfalls that leaseholders face. “On Thursday 16 September (today) cladding scandal victims, Grenfell survivors, leaseholder campaigners and MPs will stage the first major ‘Leaseholders Together’ rally outside Parliament to protest the government’s handling of the building safety crisis and failure to act on essential leasehold reforms,” she said.
Jo Darbyshire, managing director of a pensions administration company and co-founder of the NLC, lives in a Taylor Wimpey house that was sold in 2010 with ground rent of £295, doubling every 10 years. She has called on the company to follow the lead of Countryside and Persimmon in taking action on ground rents.
“Taylor Wimpey are one of the biggest offenders in this leasehold scandal,” she claimed. “They recently announced a pre-tax profit of £287.5m for the six months to early July. It’s about time they do the right thing and match what Countryside are doing. They can afford to do the right thing; they choose not to.”
Cath Williams, a university lecturer from Liverpool and the third co-founder of the NLC, added: “Today’s announcement that Countryside have agreed to remove all escalation from onerous leasehold contracts is a real step forward. It will significantly reduce the cost to buy the freehold or extend the lease and ensures that any leaseholders that have converted to RPI from doubling are treated equitably.”
She concluded: “It validates what we at the NLC have been saying for years – converting doubling ground rents to RPI is not the answer.”
Mike Amesbury, Labour’s Shadow Housing Minister, said of the CMA's action leading to Countryside Properties scrapping increasing ground rents clauses for leaseholders: “Whilst this is a welcome ruling from the CMA it highlights the glaring lack of action from the Government to tackle the leasehold scandal.
“For each year that the Conservatives drag their feet, ever more innocent homeowners are being trapped in feudal leasehold homes, facing extortionate fees, poor service and restrictive contract terms without recourse.
“We cannot wait for the CMA to investigate every abuse of leasehold. The Government must finally bring forward leasehold reform, which has been promised for years."
Meanwhile, Mark Hayward, Propertymark's chief policy advisor, put forward the trade body's view. “Most consumers are completely unaware that buying a new build directly through a developer leaves them vulnerable and without protection. Unfortunately, many leaseholders get lumbered with escalating costs making these properties expensive to live in and often difficult to sell."
He added: "Propertymark has long called for greater protections for all home buyers and sellers and our research, Leasehold: A Life Sentence? found that 93% of surveyed leasehold homeowners wouldn’t purchase another leasehold property, with 63% feeling they were mis-sold. It’s positive to see the removal of Countryside’s onerous lease terms and this should be a catalyst for the end of prohibitive clauses and greater transparency for buyers.”