After an excellent report last week, the Victoria Derbyshire show returned to consider the leasehold houses scandal yesterday. Clair Scott faces doubling ground rents, a loss of at least £40,000, has no idea who her freeholders are because they hide behind nominee directors … all thanks to Taylor Wimpey
Shady speculators in UK property assets including residential freeholds were raised on the BBC TV’s Victoria Derbyshire show yesterday.
It can be viewed here at 1:44
Sebastian O’Kelly, of LKP, said in an interview: “We are told that residential freeholds are bought by pension funds and that it pays for your and my pensions.
“Absolute rubbish. Many of the them have been sold to shady companies where the ownership is hidden by nominee directors, or they are owned offshore.
“It is this speculative element that has got to end in British property.”
The programme was a long preview of the Housing White Paper and followed an excellent, thorough report on the Victoria Derbyshire show considering leasehold generally last week at 14:56 and 01:07:20.
It included an interview with Clair Scott, owner of a Taylor Wimpey leasehold house in Silver Birch Close, in Bolton, which has doubling ground rents every ten years which started at £295.
Ms Scott and her partner had been trying to sell her property, but the sale fell through.
“The sale was going really well,” she told Victoria Derbyshire. “But then it fell through at the last minute because the buyer’s solicitors came across the ground rent clause.
“Basically it says we pay £295 a year but then it doubles every 10 years until it gets too £9,440 by 2060.
“The solicitors told the buyers that our house was not sellable because the ground rent terms were too onerous.
“We have inquired about purchasing the freehold from an entity but we don’t really know who is behind it – we don’t know who owns our freehold.
“The cheapest offer we have got it to at the moment is £40,000.
“Either way you look at it we have lost 25% of the value of our house.”
The position is even worse for Clair as she is heavily pregnant and she and her partner have completed the purchase of another house.
“So we are financially crippled and riddled with worry.”
Mr O’Kelly agreed with Victoria Derbyshire that the situation was scandalous.
“It is a complete scandal. And the pity of it is that this is plc housebuilders which are misselling these leasehold houses. A total of 8,775 were sold in 2015.
“Hapless first time buyers are coming off assured short-term tenancies and buying these houses only to find there are these onerous ground rent terms that completely devalue the property.
“Many of them have bought with solicitors recommended by the developers. I cannot stress strongly enough: do not ever employ a solicitor recommended by the developer. That in itself is a disqualification.
“The Help To Buy scheme, where taxpayers are underwriting people’s mortgages, could be used to end these flawed, predatory products.”
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The UK Leasehold Property system is an unfair system of property ownership for the consumer and the economics are not understood by MPs. The investment of owning your “own home” is one of the aspirations of every young family in UK and financing that purchase by 25 years mortgage is the way most families pay for the cost . The 25 years term taken to purchase the home is really a proxy for the family piggy bank. The home is the “piggy bank” for one quarter of UK families and forms the savings base which handed down will finance the living standards and pensions of future generations in UK .
Parliament & All MPs should recognise the interests of the UK leaseholders paying tax at 20% and 40% must take first priority over those companies called freeholder which are financed by bank loans and claim maximum interest expenses against ground rent income and consequently pay NIL corporation tax .
MPs are voted into Parliament by leaseholders – Not by freeholder companies.
MPs Salaries are paid by taxes collected from leaseholders and not from the freehold companies which are allowed to dodge the tax by hmrc..
We ( 6 million+ leaseholders ) ask Victoria Derbyshire on her BBC programme to follow up on Theresa May’s comment that there is no reason for Developer’s buy freehold land and sell “leasehold houses” and ask Victoria to call for phasing out all ground rent payment on all leasehold houses and flats sold on 80 years or longer leases.
We ( 6 million+ leaseholders ) ask the MPs in APPG to call on the UK Council of Mortgage lenders to change their mortgage loan criteria on new build property to ” 999 years lease at peppercorn ground rent and RTM for the block of flats” and RTM from the date of site completion.
We ( 6 Million + leaseholders ) call on HMRC to cease allowing expenses against ground rent income from residential property and to charge 40% tax on 100% of ground rent income. ( to match the 40% tax rate paid by some leaseholders ).
Lets have more leaseholders calling Victoria and the BBC to campaign for the end of ground rent payments.
Its not going to happen if the silent majority of leaseholders are not willing to speak out.
On 8 March 2017, Philip Hammond presented his 2017 Spring Budget in Parliament and he mentioned the National Debt has risen to £1.7 Trillion which is equivalent to a £62K debt burden shared by every household in UK. The National debt before the 2008 GFC was around £500 Mil level and the rise of debt to £1.7 Trillion after 2008 is due to government mismanagement. of the banking sector.
The APPG should tell Mr Hammond that Leasehold property system creates an average debt burden of
£180,000 on the shoulders of over 6 million leaseholders in E and W and this system is destroying the life time savings wealth of many households. The total leasehold debt amounts to £180K x 6 Mil = £1080 Bil or £1.08 Trillion is due to government mismanagement of the property title system.
Property home buyers are not given a sensible choice because the leasehold title system benefits the freeholder and many freeholder companies are controlled by entities based in off -shore tax havens.