Leasehold Reform

Fiona Bruce Excerpts

Thursday 11th July 2019 Commons Chamber

[Fiona Bruce (Congleton) (Con)]

More than two years ago, I asked Ministers what they were going to do to help existing leaseholders in my constituency who are trapped in their homes. I am still waiting for a satisfactory answer. I support the comments from colleagues: the only way we can see these people satisfactorily helped is if the Government bring forward legislation to deal with issues such as the doubling of ground rents, high permission fees and exorbitant charges to pay for the freehold.

The Government have talked about supporting those who buy in future, but we need help now for our constituents who have already bought and who are trapped. In fact, as one of them said to me, the fact that buyers are now being offered much better terms by developers, often on the same developments, has exacerbated their problems and left them in difficulties. They simply will not be able to sell their homes.

I have been given permission by Alison and David Rowlands of Sandbach to cite their experience. It is just one of many examples in my constituency, where there is a high level of house building. They say that their situation has been truly damaging to health, family life and finances. They bought their home from Taylor Wimpey in July 2011. In December 2013, they received a letter from Taylor Wimpey informing them that the freehold had been transferred. Never at the point of purchase were they told that this was something that would happen. The house is on a leasehold agreement. The terms state that the ground rent doubles every 10 years, starting at £289. That was explained to them by their solicitor, but as they expected to buy the freehold within the first couple of years or so of their ownership, they were not too concerned. However, the solicitor presumably did not know, and certainly failed to inform them, that the freehold would be sold on to a third-party investment company, which would then completely alter the estimated purchase price of the freehold that they were told about when they bought in 2011. When they bought in 2011, they were advised that it would be in the region of £5,000. After purchase by the third-party private investment company, they were told that it would be in excess of £30,000.

The alternative for the couple—they have calculated this—is to continue paying ground rent charges throughout their lifetime. We must remember that they are in a property in which they are now trapped; they cannot move out because the terms on which other similar properties nearby are being sold are so much more preferential. They have calculated that, during their lifetime, they will pay £185,850 in ground rent charges—almost the price that they had to pay for their house. Indeed, the total sum of ground rent on the property that they bought for £229,995 on a 250-year lease will be £1,837,850—the equivalent of buying their house eight times over. They say that they feel victimised and vulnerable, and, of course, they are not alone in this situation. Government need to act as a matter of justice to help these people.

Government have acted effectively retrospectively with regard to a number of individuals in my constituency who have bought properties to rent out. They bought on the basis that the mortgage interest that they would be paying would have tax relief. The Government are effectively changing that, and, as far as they are concerned, changing it retrospectively. How much more the Government need to look to help these people who are not investors—this is their home and this is the situation in which they are now trapped. As I have said, I have met Mr and Mrs Rowlands on a number of occasions. They are very genuine people—a young family seeking to settle their situation in life and become secure—and yet there they are living in their home and, as they say, feeling victimised and vulnerable. As far as Mrs Rowlands is concerned, this has had a very serious detrimental effect on her health.