Only 2% of purchasers received information prior to viewing a property, according to a survey carried out with the help of the National Leasehold Campaign and the Home Owners’ Alliance.
The Conveyancing Association has reported the findings to the Communities Secretary James Brokenshire (above).
The survey was based on 1,170 individual responses from purchasers of onerous or doubling ground rents on leasehold properties, often houses.
“Victims of these practices report that they were not made aware of these conditions prior to making an offer for the property and in many cases, they were not even made aware that the property was leasehold,” says the Conveyancing Association.
The Conveyancing Association has repeatedly highlighted the frustrations and unjustifiable costs involved in transactions of leasehold properties.
“Buyer behaviour bias is a recognised issue in the purchase of property, whereby, once a buyer has emotionally committed to the purchase of a property, they will continue with that purchase irrespective of whether it is in their best interests. This explains why the majority of leasehold owners surveyed report that they regret buying a leasehold property.
“It is therefore vital that CPRs (Consumer Protection from Unfair Trading Regulations) are complied with to ensure that potential buyers are aware of any issue which would impact their intended use and enjoyment of a property prior to viewing it.”
“Many of the respondents purchased from new-build developers and significant pockets of non-compliance were identified both in terms of the developer but also geographically, showing that bad behaviour spreads.
“For the top three individual developers named by homebuyers, the number of responses was 295, 152 and 135. That means 25% of the total responses indicating insufficient information was provided, related to one developer.”
The Conveyancing Association argues that the National Trading Standards Estate Agency Team (NTSEAT) is responsible for the regulation of CPRs but only has a budget of £250,000pa.
There are 14,000 estate agencies in England alone and that excluded developers and site sales offices.
“While CPRs does allow for fines and criminal prosecutions, it also allows for a much lighter touch approach to bring the sector into line. For example, investigation and notice of non-compliance with an undertaking to comply in future could be a workable first step, avoiding unnecessary and expensive legal fees.
“If it was well-publicised in the mainstream and trade press that there is a crack-down it is likely we will see an improvement across the board in compliance. This of course leaves the option for full prosecutions should there continue to be flagrant disregard for the regulations.”
The Conveyancing Association copied its findings to the Leasehold Knowledge Partnership, which is the secretariat of the All Party Parliamentary Group on leasehold.
It also listed the MPs MPs for constituencies affected:
Ann Clwyd, Antoinette Sandbach, Chris Grayling, Damien Moore, John Penrose, Laura Smith, Lisa Nandy, Luciana Berger, Maria Eagle, Peter Dowd, Yvonne Fovargue, Alan Campbell, Chi Onwurah, Conor McGinn, Dan Carden, Derek Twigg, Emma Hardy, Faisal Rashid, Fiona Bruce, Gary Streeter, George Howarth, Johnny Mercer, Justin Madders, Layla Moran, Lindsay Hoyle, Marcus Fysh, Marie Rimmer, Mark Tami, Mike Amesbury, Nick Brown, Nigel Evans, Stephen Twigg, William Wragg