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Government plans to end rip-off leaseholds.

Byline: Jonathan Walker and Rob Grant Political editor jon.walker@trinitymirror.com

AN MP has welcomed plans to end rip-off leaseholds which force people to pay thousands of pounds to stay in a property they own.

The government has launched a consultation on whether to change the law to stop developers selling homes on a leasehold basis.

But Catherine McKinnell, Labour MP for Newcastle North, said the government should also look at helping people who already owned leasehold properties.

She warned some Newcastle residents are being told they must pay "very significant sums" to keep their homes.

And research by The Journal has found that a ban on new-build houses sold as leasehold would affect Newcastle more than almost anywhere else in the country.

Newcastle has the fifth-highest total of houses sold using leases in England and Wales so far this year.

A total of 47 new houses have already been sold using leases - in other words for a fixed period of time - in Newcastle so far in 2017, our analysis of Land Registry data shows.

They were among 115 across the North East.

A leasehold gives the homeowner the right to use a home for a period of time, typically between 99 years and 125 years.

But someone else - the freeholder - owns the ground on which the property sits.

It means even people who have bought their own home have a landlord who can charge them "ground rent".

And they can be forced to pay thousands of pounds to renew the lease, not when it is reaching the end of its life but when there are as many as 80 years left to run.

Leasehold properties are typically flats, while most houses are sold as freehold properties, which means the buyer owns them outright.

But Communities Secretary Sajid Javid has announced he wants to restrict ground rents to zero and prohibit future houses being sold as leasehold in England - after a rise in developers selling houses as leasehold homes.

The proposals, which are subject to an eight-week consultation, aim to make future leases fairer by reducing ground rents so they "relate to real costs incurred".

The plans include measures to close legal loopholes to protect leaseholders who can be left vulnerable to possession orders.

Mr Javid said: "It's clear that far too many new houses are being built and sold as leaseholds, exploiting home buyers with unfair agreements and spiralling ground rents.

"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."

Ms McKinnell said: "There are a number of areas of my constituency - Kingston Park and South West Denton being two - where those now coming towards the end of their lease are being quoted very significant sums to purchase the freehold, or even to extend their lease.

"My main concern is the total lack of transparency around this whole issue as well as many of the freeholders involved, and the inability of homeowners to affordably challenge the sums they are being quoted.

"Banning the use of leaseholds for new builds is a step in the right direction, but real problems remain for those still having to deal with existing leaseholds."

Labour's Shadow Housing Secretary, John Healey, said: "The government has known about and ignored the ground rents scandal for a long time, allowing hard-working families to be ripped off under costly leasehold agreements. Labour has said for the last year that using leasehold to sell homes is unfair and unjustifiable."

He added they promised to end the leasehold ownerships and cap charges at the election.

Communities Secretary Sajid

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Communities Secretary Sajid Javid

Leaseholds on new-build houses could be banned
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Publication:The Journal (Newcastle, England)
Date:Jul 27, 2017
Words:625
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