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House builders pledge to scrap ‘exploitative’ leasehold deals

More than 40 house builders, developers and freeholders have signed up to a government-backed pledge to ditch “exploitative” leasehold deals, but some big names are missing from the list. 

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House builders pledge to scrap ‘exploitative’ leasehold deals #ukhousing

The pledge announced today means the signatories – including heavyweights such as Barratt and Taylor Wimpey – are committed to scrapping double clauses in leases that can see ground rents soar over a short period.

Asked by Inside Housing if there was a sanction for breaking the pledge, a Ministry of Housing, Communities and Local Government spokesman said: "The pledge is a public statement showing the intent that both government and those with responsibility for leases have to take the problem of onerous clauses seriously."

The move comes amid growing concern over how leaseholders are being treated in the private and public houses and housing developments, with many complaining about high ground rents and service charges among other things.

Last week, MPs called for a new code of practice covering housing associations and councils.


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The government also unveiled plans today to close the legal loopholes that risk leaseholders having to pay their landlord’s legal fees if the homeowner wants to challenge its landlord in court over “exorbitant” fees or hikes in annual charges.

Currently, tenants can still be forced to pay, even if they win the case.

The industry will also be consulted on whether these changes should apply to existing leases, the Ministry of Housing Communities and Local Government (MHCLG) said.

James Brokenshire, housing secretary, said today it was “great news” that leading names had signed the new pledge. But he added: “I want to see others who have not yet signed up do the right thing.”

Berkeley, Crest Nicholson and Keepmoat are among the names currently missing from the pledge, according to a list published by MHCLG.

However, a Keepmoat spokeswoman told Inside Housing today: "We will be signing it."

Last October, the government launched a consultation on plans to ban the sale of new build homes as leasehold. It had originally announced plans for the ban in July 2017.

Heather Wheeler, housing and homelessness minister, said: “We want to make sure we have a leasehold system where people are able to challenge exorbitant rates and high service charges.

“It is unacceptable that the burden of legal fees – potentially running into tens of thousands of pounds – is preventing people from seeking justice.”

Plans were also revealed today to protect leaseholders from excessive costs – known as ‘event fees’ – in the retirement home sector. The fee require owners to pay extra charges when they become ill or die.

A new statutory code of practice will mean these fees cannot be charged unexpectedly, MHCLG said.

House builders to sign the leasehold pledge

House builders to sign the leasehold pledge

The following house builders have signed a government-backed pledge to do away with ‘doubling clauses’ that can result in ground rents soaring exponentially over a short period of time:

 

Aquinna Homes

Association of Residential Managing Agents (ARMA)

Aviva Investors Global Services Limited

Barratt Developments

Bellway

Bewley Homes

Bovis Homes

Churchill Retirement

Consensus Business Group

Countryside Properties

Croudace Homes Group

Davidsons Developments

E & J Estates

Estates & Management Limited

Fairview New Homes

Galliford Try

Ground Rents Income Fund Plc

Hill

Home Builders Federation (HBF)

Homeground Management Ltd

Inland

Landmark Investments

Lioncourt Homes

Long Harbour Ltd

Mainstay Group Limited

McCarthy and Stone

Mears New Homes

Miller Homes

Millgate Developments (part of the Countryside Group)

Morris Homes

Nicholas King Homes

Octagon Developments

PegasusLife Group

Persimmon

PGIM Real Estate

Redrow Homes

Royal Institution of Chartered Surveyors (RICS)

Spitfire Bespoke Homes

St. Modwen Homes

Stewart Milne Group

Strata

Taylor Wimpey

Telford Homes

Wallace Partnership Group Limited

Wates Developments

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