Pledge to tackle leasehold 'abuses'

Developers who use hidden clauses to ramp up ground rents have been warned to help homeowners who are stuck in homes they can’t sell by the housing minister, who has promised to ‘stamp out’ the ‘unacceptable’ abuse of the leasehold system. 
 
The housing minister has pledged to “stamp out” leasehold abuses that has led to some homebuyers facing spiralling ground rents after being locked into lease contracts.
 
Gavin Barwell also demanded that developers come up with solutions to help those householders already stuck in homes they can’t sell due to hidden lease clauses.
 
During a House of Commons debate, Mr Barwell hit out at the UK’s largest house builders for using the mechanism that can lead ground rents to rocket from hundreds of pounds a year to thousands. He told the House: “A number of our larger developers are involved in it. They would do well ​to remember that they are building homes for people to live in, not investment vehicles for financial institutions.”
 
MPs heard during the debate that 4m leasehold homes could be affected and that constituents were unaware of the clauses when they bought their homes.
 
Justin Madders, MP for Ellesmere Port and Neston, said that constituents at one Taylor Wimpey development felt “duped” after discovering the clause.
 
He added: “The reservation form that they signed stated that the ground rent was £175 a year, and there was no mention of it doubling every 10 years. I understand that Taylor Wimpey has now decided not to sell any new properties on a leasehold basis, which is good news. 
 
“What we are discussing today is nothing short of a national scandal. It is the PPI of the house building industry.”
 
Mr Barwell promised that action would be taken this year and ordered developers to stop future sales of leasehold houses.
 
“The Secretary of State and I have been looking closely at the issues raised in recent weeks and we are both absolutely determined to stamp out unfair, unjust and unacceptable abuse of the leasehold system,” he said. 

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