Deeside MP Mark Tami welcomes new measures to tackle leasehold ‘scam’ in Wales

New measures introduced to tackle leasehold concerns in Wales have been welcomed by Alyn and Deeside MP Mark Tami.

Mr Tami who sits on an all-party parliamentary leasehold reform group had brandished the practice by housing developers to sell homes as leasehold a ‘scam’ in a recent Westminster debate.

The Alyn and Deeside MP highlighted difficulties many owners of leasehold properties face who have to apply to make any alterations such as changing flooring and are charged excessive fees.

He said “It is a scam, and it needs to be treated as such”.

Traditionally, houses are sold as freehold with the buyer having complete control over the property, those sold as leasehold mean the buyer if effectively a tenant on a very long term rental.

The ground the leasehold house is built on remains in the ownership of the freeholder who charges an annual ground rent.

Leasehold property owners were charged a very low “peppercorn” ground rent, but now developers have started to insert clauses into leasehold contracts where the ground rent can be hundreds of pounds a year, doubling every ten years.

The Welsh Government has announced an agreement with major house builders including Deeside based Redrow as well as Taylor Wimpey, Bellway, Barratts, and Persimmon to ensure that leasehold contracts are only used when necessary.

Housing and Regeneration Minister Rebecca Evans announced the new package of measures of measures today, the include;

• new criteria will require a developer to present a genuine reason for a house to be marketed as leasehold
• leasehold contracts will have to meet minimum standards, including limiting the starting ground rent to a maximum of 0.1% of the property’s sale value
• leasehold agreements will have to run for a minimum of 125 years for flats and 250 years for houses.

Mark Tami MP said;

“It is welcome news that the Welsh Government will implement new regulations in Wales which will mean developers will no longer be able to market a property as leasehold without a valid reason.

It is encouraging that major developers have already committed to no longer selling properties on a leasehold basis unless it is absolutely necessary, however we need to ensure all developers take this stance.

I will continue to work on behalf of those already affected by the leasehold scandal. Both Westminster and Cardiff need to come up with a way to support these people.”

The Housing and Regeneration Minister said she was delighted that major home builders will no longer offer houses for sale on a leasehold basis, unless absolutely necessary and hopes other developers will make the same commitment.

Rebecca Evans said:

“These measures have been developed in co-operation with the industry through our House Builder Engagement Programme including the Home Builders Federation and Federation of Master Builders.

We have acted swiftly to take targeted and tangible action over concerns about leasehold sales on newbuild homes, and where leasehold is already the tenure, I am setting up a new group to recommend reforms to the system.

I intend to put in place a voluntary Code of Practice to underpin these measures, improve standards and to promote best practice.

This is only the start of my plans to address concerns around leasehold. I have not ruled out the possibility of legislation in the future, which may well be needed to make leasehold, or an alternative to it, fit for the modern housing market.”