Housing minister James Brokenshire has revealed that 40 leading new homes builders and industry organisations including the Home Builders Federation have signed a 14-point ‘pledge’ to end the practice of unfair and onerous leaseholds.
Big names in the industry to have signed up to the document include Bellway, Bovis, Barratt, Countryside, Fairview, Galliford Try, Miller, Octagon, Persimmon, Redrow, Taylor Wimpey and Telford Homes.
The pledge includes a promise to free the 12,000 existing leaseholds trapped in bad ‘doubling clause’ deals and ending the practice of unjustified legal fees when leaseholders take freeholders to court over dubious leasehold clauses.
For existing leaseholds, developers have promised to help them move to RPI-indexed rises in ground rent regardless of whether they have previously asked to amend their leaseholds or not.
The pledge also requires developers not to insert onerous clauses in future agreements, and ensure details of each leasehold are represented in a ‘fair and transparent way’.
Developers have also agreed to put in place both appropriate complaints and redress schemes to reassure leaseholders that any future problems are dealt with appropriately.
“Today’s news is a victory for those stuck in leases with onerous ground rent payments, charged for making alterations to their properties, and [who are] ultimately unable to sell their homes,” says Mark Hayward (left), Chief Executive of NAEA, which has been campaigning on the issues.
“These measures are a huge step in the right direction towards fixing Britain’s broken housing market.”
But the initiative is not without its critics. Campaigning organisation the Leasehold Knowledge Partnership, headed up by former Mail on Sunday property editor Sebastian O’Kelly (right), says: “Developers and freeholders have pledged to act fairly, having previously told the Communities Select Committee that everything in leasehold smelled of roses and leaseholders were exaggerating the problems.
“The government and panicky leasehold monetisers have cobbled together a sort of good behaviour pledge mainly in response to the Communities Select Committee’s thoroughly researched assault on leasehold practices published earlier this month.”