Ribble Valley MP Nigel Evans has welcomed the Government’s new proposals to bring an end to leaseholds on new-build homes.
Unlike freehold property owners, leaseholders do not own the land on which their house is built and pay an initial small rental for occupying it.
But this charge can rise sharply or be sold on to third parties who can then increase the “ground rent” payment dramatically and force the purchasers to pay thousands to buy them out.
Recently, communities secretary, Sajid Javid, unveiled the plans, which include measures to close legal loopholes to protect leaseholders who could potentially face possession orders, as well as altering rules on Help to Buy equity loans which would mean they could only be used for “new built houses on acceptable terms”.
Mr Evans, who has been involved in combating the scandal, said: “This is blighting the properties that people are now trying to sell - some building societies will not touch them or lend anybody money to buy them. Even worse, when people are about to buy a property, they are told they can buy the freehold later on, and when they get to this point, they are expecting to pay £4,500.
“They were told that the leases had been sold on to another company.”
Last week Mr Evans raised in Parliament the case of a Ribble Valley couple who were made to pay £38,000 to buy their freehold from a third party just months after it was sold on by the developer for £7,000.
Speaking from Westminster, Mr Evans added: “Whilst I am thoroughly pleased with the proposals announced, it is absolutely crucial that every homeowner who has been subject to the leasehold scam is given the opportunity to buy their freehold at the original price, regardless of whether they have been sold to a third party. I will continue to pressure for reform in this area.”
The proposals also include looking at introducing measures limiting ground rents in new leases to start and remain at a “peppercorn” level.