The HomeOwners Alliance has called on the government to tackle leasehold 'mis-selling' as research shows awareness of the issue has risen significantly.
Britain’s archaic leasehold system has been the fastest rising housing issue over the past five years, according to research by consumer group the HomeOwners Alliance.
Three in five (60%) UK adults now say the leasehold system – including service charges, ground rent and other fees – is a serious problem. This is up from 42% in 2015.
More than a quarter (26%) of leaseholders complain about the high cost of works and management fees, while 22% are dissatisfied with unfair service charges and a similar number (23%) complain of a lack of control over which major works are done.
Paula Higgins, chief executive of the HomeOwners Alliance, is excoriating of government inaction on the issue: “The HomeOwners Alliance urges the government to take action now to abolish the leasehold system. Only last week MPs highlighted the fact that developers, freeholders and managing agents treat homeowners as a source of steady profit.
“As a membership organisation representing homeowners, we want to see a better deal. If the government was really serious about this then they should commit themselves to widespread reform instead of the piecemeal approach they have adopted - making well intentioned announcements with no timetable for action.
"It can’t hide behind Brexit while homeowners continue being mis-sold leasehold, left trapped in their own homes with rising ground rents and unable to buy the freehold.”
The most common leaseholder problems relate to costs, control, communication and transparency.
Among all UK leaseholders, 40% report no problems, while others report high cost of works and management fees (26%), unfair service charges (22%) and lack of control over what works are done (23%).
Nearly one in five leaseholders (18%) highlight the difficulty getting necessary works done, while others find a lack of transparency about costs (17%) or difficulty finding or communicating with their freeholder (15%).
These results follow a Select Committee report on 19 March, calling for a crackdown on the leasehold system.
The survey also reveals that 45% say that gazundering is a problem – up by 5% over the year.
Paula Higgins adds: “People crave more certainty in the housing market – that the price agreed at point of sale will be the price paid. Reservation agreements to be piloted by government should reduce peoples’ concerns over gazundering and gazumping.”
Other key findings
- Housing quality is the fastest rising issue in 2019 – now at a five-year high. Almost two-thirds (63%) of the 2,000 UK adults surveyed now cite the quality of Britain’s homes is the fastest growing issue – up 6% from 2018 – while 69% of those living in rented accommodation also report serious worries about housing stock quality.
- The survey also reveals that 91% of first-time buyers are worried about getting on the property ladder, while 88% say house prices and 87% say saving for a deposit are serious problems.
- Some 45%of those polled are concerned by negative equity, which is up by 3% year on year.
- The cost of stamp duty is seen as more of a problem over the past year, according to 55% of those polled - up from 50% in 2018.
- Getting a mortgage or remortgaging is less of an issue for homeowners. Some 64% of those polled say the ability to get a mortgage/ remortgage is a problem – down from 72% in 2015.