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‘Entire residential leasehold system’ is called a scandal

Following news that the Council of Mortgage Lenders and Legal Sector Group are drawing up plans to tackle the issue of high ground rents on some new-build leasehold homes, many readers condemned the practice…

The leasehold ground rent scandal cannot be limited to rents on new-build houses; the entire residential leasehold system is the scandal.

England and Wales are the only countries in the world where households pay a mortgage on a property they never own, where they pay a mortgage but are referred to as tenants under leases. This feudal system must end – Scotland and Northern Ireland have now abolished leasehold arrangements.

Mortgage lenders should stop being accomplices to developers and so-called ground rent investors. Commonhold must equal common sense!

Cathy Lorimer

Complaint: leasehold houses are a cash cow that must be scrapped

There is absolutely no requirement for leasehold arrangements to be in place on houses. It is just a cash cow for building companies, freehold managers and solicitors.

I hope communities secretary Sajid Javid follows through on what he has suggested and scraps them.

Bryan Wildman

Calls for fairness and standardisation in freehold pricing

With regard to the leasehold ground rent scandal, people also need to be aware of the challenges around trying to buy the freehold of a property they have purchased at a later date. There is no consistency in what is regarded as a fair price.

If leasehold arrangements are to continue, this should be built in to the agreement, with it specified that the homeowner can buy the lease at a standard price of a specified multiple of the annual ground rent.

Chris Tranter

‘Housing has enough problems without new-build leaseholds’

New-build houses being sold as leaseholder should be made illegal. If all lenders take the same stance as Nationwide or, better still, refuse to lend on them, builders will simply have to stop.

There are already enough problems in the housing market, with existing leasehold houses and rogue landlords. I am aware of a recent situation where a client was stung for more than £5,000 for an unpaid ground rent bill of less than £20. From what I have learned, this type of thing is not unusual, and it needs to be stopped.

Let’s not add to the issues in the market by creating even more leasehold houses. There is very little need for them.

Carl McGovern

Criticism of Government for not forcing firms to require a licence to trade

The business of multiplying leasehold ground rents feels very sleazy.

I can’t believe the Government has not forced the firms that collect these ground rents at least to require some sort of licence in order to trade and to collect this money.

We need a regulatory body for the industry to crack down on these arrangements, and put a new system in place. If there must be increases to ground rents on leasehold properties, these should be linked to inflation and the amount that can be charged should be capped.



Financing properties owned in trusts

Part of a series looking at various niche markets within the buy-to-let sector where choice of lender is more restricted than for normal borrowers. One such area involves loans secured on residential properties owned through trusts. Properties can be held in trust for many reasons. For example, if a property is left to minors in […]


CML takes action on leasehold ground rent scandal

The Council of Mortgage Lenders is drawing up guidelines on tackling the unfolding ground rent scandal as it puts pressure on housebuilders over the issue, Mortgage Strategy has learned. Last November it emerged that some property developers had been selling new-build houses on a leasehold basis with very expensive ground rents. Some of the contracts […]

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Financial advice can benefit customers by £40,000

New research shows those customers who receive financial advice can be better off on average by £40,000 We’ve sponsored a research project with the International Longevity Centre – UK (ILC-UK) to produce ‘The Value of Financial Advice’ report. This independent research demonstrates that customers who take financial advice can, on average, be £40,000 better off than those […]


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