A number of constituents have been impacted by a scandal of the new housing market where new homes are sold with leaseholds – which results in ground rents that in some cases double every ten years and will cost over £7,000 to buy the leasehold.
In many cases, the people being hurt by this are first time buyers who have saved for years to buy a home. Only to find that housing developers have used leasehold schemes to undermine their dream of owning their first home.
Many people who purchased a new home with these leaseholds were not given legal advice and if they approached a sales team they would be sold a leasehold under pressing sales tactics.
We are now in the absurd situation where developers are profiting from this legal loophole and giving bonuses to their Chief Executives of over £100m. This is wrong and needs to be put to an end.
The Government happened to make a statement today setting out their approach for this, which I welcome. But I am still concerned that by the time the legislation comes into being developers will have sold on their leaseholds to third parties to negate their liability.