BBC R4’s consumer programme reported the All Party Parliamentary Group on leasehold reform meeting of April 19.
It can be heard hereat 34.00 http://www.bbc.co.uk/programmes/b08m8z32
Reporter Melanie Abbott attended the meeting and has been covering this story since last December, which has resulted in a number of broadcasts.
BBC R4 You and Yours heard that homeowners with doubling ground rents are planning a group action against the developer and the solicitors involved.
One MP described leasehold houses as a “national con”, another described plc housebuilders as “scammers”.
Miss Abbott reported that buyers received £5,000 discounts if they completed within 28 days – which is a considerable incentive to rush the process and use the developer recommended solicitors.
Solicitor Mari Knowles described the leases as onerous, one-sided and “nothing more than a money-making mechanism”.
Miss Knowles told the programme that she believes that “there could be misrepresentation and unfair contract terms”.
“There are cases of negligence and that is something that we will be pursuing. I’m hoping that there will be other legal remedies that I can pursue on behalf of the leaseholders.
“Something we are in the process of doing at the moment is collecting data and clients, and we are putting them into groups according to which conveyancing solicitors were used and which housebuilder was involved.
“When we have enough numbers in the group then we can then take action as a group: against the solicitors; against the developers; or both.”
Taylor Wimpey told the programme that there was no obligation to use their recommended solicitors and that the law firms were “completely independent and the lease terms are set out”.
Taylor Wimpey said that it’s working on possible solutions to the issue, and would report back before the end of this month.
Homebuyer Joanne Darbyshire, from Bolton, was also interviewed. She knew of the doubling ground rents when she bought in 2010, but was not worried as Taylor Wimpey had told her she could buy the freehold.
“What was not mentioned was that Taylor Wimpey would sell the freehold on to a third party less than two years later.
“We were notified that the sale. We were not given the option to buy the freehold at that price.”
With the new freehold owners, it cost £108 just to get a quote. Neighbours who had done this were astonished to learn that the freehold owners wanted £54,000.
“I would like to see leasehold houses outlawed unless there is a damn good reason for them to be sold leasehold,” Miss Darbyshire told the meeting, to applause.
BBC R4 You and Yours reported that Redrow and Barrett are waiting for the results of a government consultation before deciding future policies on leasehold houses.
Both have ground rents that increase every ten years with RPI.
Persimmon has the same terms and “says it only sells a small proportion of its houses leasehold and has no plans to change”.
Bovis said it only sold two leasehold houses last year, out of 4,000 new builds.
The programme quoted Conservative MP Andrew Selous.
“Leasehold houses being sold on freehold land that belongs to the developer. At Dunstable with Linden Homes and the other in Leighton Buzzard with Persimmon.
“I have this practice happening. In the main, it is first-time buyers using Help To Buy.
“This should be a really exciting moment and it is being ruined with all the worries that we’ve heard about.
“Frankly, I think we have businesses that are trying both to sell a house and rent it. It is a spivvy financial director thinking on a wet Thursday afternoon how we can get an extra income stream.
“I think it is absolutely disgraceful.”
Justin Madders MP said there should be a legal inquiry into what the solicitors have been doing.