By Harry Scoffin
Mortgage lenders refusing to issue loans on freehold houses blighted by rip-off ‘fleecehold’ charges condemn families desperate to move – divorce, death, debt – to staying put.
The banks’ decision now forces policymakers to bring an end to fee-generating covenants and unregulated estate management schemes, LKP trustee and National Leasehold Campaign co-founder Katie Kendrick told BBC Radio 4’s You & Your programme yesterday.
She said that fleecehold has ensured that “our homes” and the estates they sit on are being “used as an endless income stream”.
Despite the properties being freehold, she says the homeowners who live in them are not “free from hold”.
Ms Kendrick said that developers have moved on from playing the angles of leasehold property tenure to monetise estate charges, or ‘fleecehold’, instead.
“These fees were not open and transparent at the point of sale,” she added.
Ms Kendrick’s intervention follows Santander’s decision to stop lending on properties where management charges are uncapped.
Reporter Melanie Abbott claimed that there are over a million homeowners with onerous management fees written into the freehold deeds to their house.
Nationwide is also reported to have refused mortgages on fleecehold homes.
Barclays says it will review its policy on houses with management fees.
Santander has refused to lend on new-build homes if the developer has included uncapped management charges in the freehold contract, YourMoney.com’s sister title Mortgage Solutions can reveal, while Barclays and Nationwide are also taking action in this area.
Banks Refusing Mortgages on New Builds with Escalating Estate Management Fees As developers saddle new build properties with uncapped and escalating estate management fees, high street banks are refusing mortgages for some of them. Santander has refused to lend on new-build properties if the developer has put uncapped management charges in the freehold contract, Mortgage Solutions has reported.