Urgent action needed to protect leaseholders from sharp practices'

5 April 2017

Around 1.577 million leaseholders don’t legally own their homes, according to a new report into the abuse of the leasehold system in England and Wales.

The HomeOwners Alliance reveal that the true rate of homeownership in England and Wales is just 58.9% and significantly lower than official data once the 1.577 million leaseholders who do not legally own their own homes are taken into account.

Its Homes Held Hostage report also reveals that 42% of leaseholders do not know the length of time remaining on their lease and of those who do, 24% (around 370,000 homes) have leases running for less than 80 years. The HomeOwners Alliance says that the cost of extending these is likely to exceed £4 billion.

Additional research by the Alliance found that less than half of adverts on popular property portals were clear about the length of tenure of properties. While 49% of flat listings confirmed whether the property was a share of freehold or a leasehold property, only 24% were specific about the length of time left on the lease.


Commenting on the problems leaseholders face, Paula Higgins, chief executive of the HomeOwners Alliance, says: “Leasehold ownership can be traced back to the Domesday Book and it is a practice that should be relegated to history. Unscrupulous and avaricious actors within the property industry are using sharp leasehold practices to line their own pockets and fleece householders.

“Developers and estate management companies rely on leasehold to bamboozle consumers, charge exorbitant administration fees, ever-increasing ground rents and render properties unsellable.

“The situation is exacerbated by the fact that many estate agents are themselves ignorant about leasehold and fail to inform and educate their customers properly.

“The government needs to take urgent legislative action to protect people from these practices, help people who are already trapped and avert a full-blown crisis. Our report highlights the problems and makes a series of simple and sensible recommendations that could be introduced.”

10 recommendations to improve leasehold

The HomeOwners Alliance’s report makes 10 recommendations to improve the leasehold system:

  • Commit to scaling back leasehold.
  • Review of the whole leasehold system.
  • Outlaw the creation of new leasehold houses.
  • Outlaw the doubling of ground rents.
  • Mandatory commonhold tenure for all new-build blocks of flats.
  • All lease extensions to be at least 250 years with a token rent.
  • Standardised leasehold contracts.
  • Make it faster and fairer to buy and sell leasehold properties.
  • Provide accurate and timely information to purchasers.
  • Extend the rights afforded to private leaseholders to other groups.

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