Problems buying a home with a lease

24th August 2017

At my surgeries in Chapel-en-le-Frith on Saturday, several people who had recently bought the new houses came to see me as they had only been able to buy their homes on a long lease.

Whilst leasehold has always been an accepted practice for selling flats, it is becoming more common for houses. Instead of buying their home outright – or ‘freehold’, a long lease of 100 or 150 years is sold, with ground rent payable each year.

Ground rents can increase by as much as 5% a year, or 100% every five years. Ground rent that starts at a few hundred pounds can increase rapidly to several thousand pounds a year.

Someone who has bought their home leasehold has the legal right to buy the freehold after 2 years, but the company that owns the freehold can charge what they wish, and such charges are usually several thousand pounds.

Whilst the homeowner can take the company to tribunal to try to negotiate a fair price, they are advised to seek legal representation, which only adds to the costs. New homeowners can ill afford this, but they are otherwise saddled with ever increasing ground rents which make it harder to sell their house when they wish to.

It seems wrong that the government is giving money to housebuilders through the Help to Buy scheme – there to assist new homeowners – only for buyers then to be subject to extortionate charges for buying the freehold of their home.

I can see no reason for new homes such as those in Chapel needing to be sold as leasehold. The government are currently consulting on restrictions to the sale of leasehold properties. I have written to the minister and will be responding to the consultation.

If you, or your friends or family have been affected by buying a leasehold property, please let me know at the contact details below.

At the weekend, I met with High Peak community groups who are working to improve their neighbourhoods. In Tintwistle I met the Friends of Conduit Street Playing Fields who have banded together to raise enough funds to build brand new swings, slides and all sorts of play equipment on the field at Conduit Street. They were able to raise an amazing £50k for the equipment and it means Tintwistle families don’t have to drive out of the village to find a good play area for children. They have created a fantastic community resource that all Tintwistle will benefit from and be proud of.

In another example of High Peak people pulling together for their community, I went to New Mills to meet with a group who are trying to save the historic Masons’ Arms from closure. I am supporting the group’s application for the pub to become a Community Value Asset, which would preserve the building and ensure that it remains a hub for local people to use. The Save the Masons’ Arms petition is online https://you.38degrees.org.uk/petitions/save-the-masons-arms which already has over 500 signatures.

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