Leasehold advice service and housing minister call for clarity on the tenure

Housing minister Gavin Barwell has backed up a leasehold advice service in calling for more information and greater clarity on homes sold on a leasehold basis, following criticism.

The LEASE event, taking place in County Hall in London, was addressing problems that homebuyers and tenants have had with the leasehold tenure, including revelations last year that thousands of new houses were being sold as leasehold rather than freehold, with substantial extra costs to buyers as a result. This problem added to general confusion that many tenants and leasehold buyers have over what the tenure allows them to do and what they can be charged to do so by companies that own the freehold.

Land Registry figures show that 43% of all new build home registrations in England and Wales in 2015 were under leasehold, compared with 22% in 1996, and with the aim to build thousands more homes every year in order to catch up with demand, it is possible that figure may increase still.

Tony Essien, CEO of LEASE, says: “With an increase in leasehold properties expected, it is essential that this type of tenure becomes more widely understood. Naturally, many buyers can get so caught up in the excitement of buying their new home, and they may fail to look or understand the terms of the leasehold.

“England’s leasehold system is unique, so it is vitally important that buyers understand what they are purchasing so that their financial investment is protected in the future. We look forward to the outcome of the forthcoming White Paper and to help play a part in the future of leasehold tenure.”

In his role as minister of state for housing and planning, Gavin Barwell MP had already called on housebuilders to stop this practice in the House of Commons and commended national housebuilder Taylor Wimpey at the event for following his wish. Barwell repeated his call to new homes providers to do the same, and offered funding to the LEASE organisation to help them continue to provide independent advice to buyers and industry professionals about the complex property tenure.

“We are determined to create a housing market that works for everyone,” he said. “Millions of people own leasehold homes and I am determined to stamp out unfair, unjust and unacceptable abuse of the leasehold system. I want to see transparency and fairness for leaseholders - and I am pleased to announce ongoing support for LEASE, who provide free, valuable advice for existing and prospective leaseholders.”

Essien responded: “This welcome investment shows how committed the government is to ensuring greater transparency when it comes to buying and selling leasehold homes. By allocating sufficient funding to our resources which helps guide and educate the industry means that we can continue to offer reliable and free advice to those who need it. This will lead the way for even better working practices for everyone involved, right from the start of the homebuying process.”