HOUSING SCANDAL: Thousands of Lancashire families stuck in leasehold limbo

The government has announced an eight-week consultation proposing measures to crackdown on leasehold abuse. But while these plans could be welcome news for prospective buyers, thousands already locked into deals face an uncertain future.
Homeowner Laura Tomlinson, partner Andrew Seed and dog Lexie, outside their home a new housing estate in Leyland.Homeowner Laura Tomlinson, partner Andrew Seed and dog Lexie, outside their home a new housing estate in Leyland.
Homeowner Laura Tomlinson, partner Andrew Seed and dog Lexie, outside their home a new housing estate in Leyland.

Laura Tomlinson and her partner were among the first wave of buyers on their new development in Leyland in 2015.

Two years down the line, the 29-year-old and her partner, Andrew, were looking into renegotiating their mortgage terms, as many do after signing up to two or five year rate deals.

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Shortly after, the pair received a letter from the company in charge of their leasehold ground rent charges, informing them they would need to pay a fee.

“I thought, frankly, that’s none of their business,” Laura told the Lancashire Post, although the letter made the couple check what other terms they were locked into.

They were aware the freehold on their property had been sold on from developer Taylor Wimpey to investment company Aviva shortly after they had moved into the Albion Gate estate.

But the full extent of their situation was now being realised.

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Laura said: “We were first time buyers, we were just told we would be paying a ground rent charge of £295 every year. But (the leasehold agreement) wasn’t really explained.

A new build site in LancashireA new build site in Lancashire
A new build site in Lancashire

“We weren’t aware it would rise every 10 years, from the date the development was complete, with RPI (retail price index), but it does.”

Their situation is not an isolated one. Thousands of new buyers across the country are stuck in similar situations. Those not signed up to RPI-related deals face their ground rent charges doubling.

And with many mortgage suppliers not issuing on houses with leasehold agreements, those already locked into such deals face the prospect of their houses becoming effectively un-sellable.

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There have also been reports of conveyancing solicitors across the country facing professional negligence claims for alleged failures informing clients of lease terms amid concerns conflicts of interests arising from developers recommending firms for buyers to deal with.

Sajid JavidSajid Javid
Sajid Javid

The fee for changing their mortgage deal made this Leyland couple go over the full details of their arrangement.

They learned that Taylor Wimpey was offering sales of the freehold properties on similar developments for prices in the region of £5,900.

“But for us, to buy from the investment company, it would be 13,500 and we would have to pay their legal fees and ours, which means it would be more like £15,000,” Laura explains.

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“You also have to pay a fee for extensions or any other changes to the house. Although not ideal, I think that’s more understandable because they’re the land owners. But as for the change of mortgage providers, it’s none of their business.”

A new build site in LancashireA new build site in Lancashire
A new build site in Lancashire

Her brother is now looking into buying a property on the estate and has been offered the chance to buy the freehold agreement up front. And he has been assured the freehold rights will not be sold within five years, she said.

“That’s not what happened with us. Ours was sold after six months or so.

“Upon our purchase, in April 2015, it was not offered as an option that we could purchase the freehold up-front, nor were we advised of Taylor Wimpey’s intention to sell the freehold on without first offering it to the homeowners to purchase.”

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Many across the county, and the nation, will be in a similar state of leasehold limbo. The government consultation, and the proposed changes to the system, may have come to late for them.

Laura, a general services manager, said: “To be honest, I can’t see (the government’s crackdown) helping us. It’s great for first time buyers now, in the situation we were in a few years ago.

“Other properties are facing the ground rent change doubling, we’re not as bad with the RPI rate.

Sajid JavidSajid Javid
Sajid Javid

“But if you live in a property for 30, even 10 years, the situation would be un-viable because of the rises. It really needs the government to stand up and say what’s going on is wrong and stop it happening.”

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Taylor Wimpey announced earlier this year a £130m fund to help customers buy out their leaseholds in which ground rents double every 10 years. But, as Laura explained, this will nwot help all those affected.

She said: “Taylor Wimpey may have set the money aside, but that doesn’t help those whose freeholds they have sold on or those who have since sold on their homes to new buyers. We find ourselves in homes that due to hidden clauses homeowners could be landed with big charges to ask for permission to build an extension, add on a conservatory, for example.”

These leasehold arrangements are certainly not restricted to one housing developer or one particular area, although the North West has been identified as a particular hot-spot.

The Lancashire Post has been contacted by residents who have concerns about their leasehold agreements on new builds across the county offered by several major developers.

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One first-time-buyer, who spoke to the Post anonymously and lives on the Whittingham Park development in north Preston, another Taylor Wimpey site, said: “We were told about the ground rent charge but didn’t know it could change.

“It wasn’t until I was tagged in a group on Facebook I learned more about the leasehold situation and what could happen. We’re quite young and first time buyers using the help-to-buy scheme, it should have been made clearer.

“I don’t think (the selling of leasehold houses) should be allowed at all as we might struggle to sell in the future.”

Another has signalled an intention to place warnings in the window of their new property warning prospective new buyers about the leasehold situation at Whittingham Park.

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The government consultation proposes changes that include restricting leasehold agreements to properties - predominantly flats - that have shared services.

Sajid Javid, communities secretary said: “It’s clear far too many new houses are being built and sold as leaseholds, exploiting homebuyers with unfair agreements and spiralling ground rent.

“Enough is enough.

“These practices are unjust, unnecessary and need to stop.

“Our proposed changes will help make sure leasehold works in the best interests of homebuyers now and in the future.”