Leasehold houses: promise of fix … one day, maybe

“Housebuilders are to be investigated over the mis-selling of thousands of leasehold properties after a U-turn by the competition watchdog amid pressure from ministers.

The Competition and Markets Authority (CMA) said it would examine the scandal surrounding new-build homes sold on leases that were subject to substantial increases in ground rents and the charging of “permission fees” for home improvements. Developers and freeholders could face legal action if the watchdog finds evidence of leasehold mis-selling. The watchdog said it would decide whether the practices constituted “unfair terms”, a breach of consumer contract law.

James Brokenshire, the housing minister, has previously called on the CMA to use its influence to tackle the “culture of consumer exploitation rife in the housing industry” with an inquiry into the estimated 100,000 homes sold with “extortionate” leases.

However, in November, the CMA told the minister it would not investigate the issue, citing the legal complexities surrounding historic cases of mis-selling. In a letter seen by The Times, the watchdog also noted it does not have the power to fine companies using its consumer powers and blamed Brexit preparations for it not being able to prioritise problems in the housing industry.

The U-turn comes after the Commons housing committee published a damning report on the scandal in March, calling for the law to be changed to help people stuck in leasehold properties with crippling fees that they are unable to sell on. It also criticised solicitors for failing to warn clients about the unfair deals, accusing some of being too close to developers.

The leasehold scandal emerged as developers began to sell houses on leasehold rather than freehold, often without the buyer fully understanding the contracts. In many cases the freeholds were bought by offshore investors who demand large sums from homeowners to buy out the contracts.

Taylor Wimpey, one of Britain’s biggest housebuilders, has set aside £130 million to help its customers escape unfair leases it sold. More than 40 property developers and freeholders this year signed a government-backed pledge to help homeowners affected by the scandal by changing the terms of leases for those with onerous clauses.

Sebastian O’Kelly, of the Leasehold Knowledge Partnership, said: “We welcome the CMA looking into this. It’s long overdue and will be welcomed by the 12,000 owners of new leases with doubling ground rents, and 88,000 where the ground rent is above 0.1 per cent of the sale price and whose properties are unsellable.”

The investigation comes as the industry attempts to improve its public image after criticisms of build quality as well as punitive hidden charges.

Countryside Properties this week became embroiled in a row with Joe Anderson, the mayor of Liverpool, who reportedly told residents he would ban the housebuilder from building in the city due to historic cases of selling leasehold homes with “doubling clauses” for ground rents.

Countryside said it no longer sold leasehold homes, had signed up to the leasehold pledge and took action to fix the doubling of ground rent leases that were in place two years ago. A spokesman for the Home Builders Federation said: “The industry has made huge progress to identify and address the issues raised on particular aspects of leasehold sales.”

Source: Times (pay wall)

Cranbrook – Town Council tries to explain why it has no town centre

Cranbrook Town Council Facebook page – the first major headache for the 3 new district councillors:

“CRANBROOK TOWN CENTRE DEVELOPMENTS

The Town Council is very aware that there is considerable interest in the town centre and many demands to deliver it. There is an assumption that the Town Council, East Devon District Council and the Developer Consortium should be delivering shops and cafes.

But this is not how a town centre is delivered. The Developer Consortium owns the land but beyond that delivery of commercial activity and some buildings depends on commercial interest. With around 1,900 occupied dwellings in the town we understand there is not yet the level of footfall to attract a great deal of commercial interest from large stores, supermarkets and others with the ability to build commercial properties.

In addition the Consortium are not currently required to have provided such development as the triggers have not yet been reached which are set out in the legal agreements which were signed when Cranbrook first received planning permission.

So the question is what is being done?

Members of the Town Council are meeting weekly with East Devon District Council’s planning team, the Exeter and East Devon Growth Point, the Developer Consortium and their architect.

The aim is to identify particular uses which can be delivered and strategies for their delivery. Importantly uses which are being discussed are the town hall, health and wellbeing hub, children’s centre, youth centre, town square and a market hall.

The work will lead on to ways of unlocking funding for this infrastructure and that is very much linked to the development of the expansion areas. Without that investment there would not be sufficient funding within the current legal agreement (“Section 106”) terms to deliver what the town requires in key buildings.

The challenge is to design and create a town for the 21st century. We are all aware of the pressures on high streets, especially from competition by on-line retailers. What we do not want is a town centre which is designed on traditional grounds which could result in empty premises.

Cranbrook is a 21st century town and we need a town centre which delivers what we cannot do online and a town centre which complements and enhances online business rather than competes with it. The town centre should incorporate social and green space as well. This is a massive challenge but one which we are meeting.

We will communicate updates when progress has been made.”

Cranbrook urgently needs temporary GP practice

Owl is amused at the idea that an extra GP practice would increase footfall in the “town”. But you just cannot call a settlement of 2,000 houses with 5 shops a town – maybe “suburb of Exeter” is now more appropriate!

“… Cranbrook temporary GP Practise
The Projects Director presented the report which sought approval for up to £150k of funding from the Enterprise Programme to enable the delivery of a temporary GP practice in Cranbrook town centre. This was an urgent requirement because of the lack of capacity at the current practice. Whilst Access Healthcare had had their contract extended there were significant concerns over the ability to deliver increasing patient numbers. Expanded facilities were therefore urgently required.
Discussions included the following:

 if not supported this would create a massive health inequality
 this was a loan therefore the borrowing would be repaid
 as well as helping the health service, this was a benefit to the residents of Cranbrook as the existing provision was under pressure. …

The current GP practice in the Younghayes Centre was at capacity. The temporary GP practice would enable the continued delivery of primary care services in Cranbrook for a period of 5 years. It would also bring increased footfall to the town centre and act as a catalyst for attracting wider investment.”

https://democracy.eastdevon.gov.uk//documents/g143/Printed%20minutes%2003rd-Apr-2019%2017.30%20Cabinet.pdf?T=1

EDDC now wants Government to pay for a town centre at Cranbrook

Owl is confused. Don’t you include a town centre in initial “new town” plans – and pay for it with developer contributions? Otherwise, it isn’t a “new town”!

“The government is being urged to extend its £675m Future High Streets Fund to also help create and improve town centres in new towns.

East Devon District Council and Cranbrook Town Council have written to the Parliamentary Under Secretary of State at the Ministry of Housing, Communities and Local Government, Jake Berry MP, to request eligibility criteria for the Fund be changed to include new towns.

At a meeting of East Devon District Council’s cabinet earlier this month, they selected Axminster as the town to put forward to try and grab a share of a £675m fund. ..,”

https://www.devonlive.com/news/devon-news/allow-new-towns-like-cranbrook-2672297

Spare a thought for Cranbrook residents – tied to E.on for EIGHTY years

Cranbrook has a “district heating” system whereby residents are supplied from only one source owned by E.on and everyone in that system is licked in to E.in as their supplier”

“… E.on has an 80-year contract to supply Cranbrook, a new town in East Devon.

Once they’ve bought into a development, residents are locked into a monopoly. They are not allowed to fit solar panels or heat source pumps and, whether or not they use their heating, remain liable for often large standing charges which include maintenance and repair of the infrastructure. …”

https://www.theguardian.com/money/2017/feb/05/district-heating-fuel-bill-regulation

Now Cranbrook residents are forced to take their energy from one of the least popular suppliers:

“Eon, one of the Big Six energy suppliers, is losing customers at an ‘alarming rate’, a new report claims.

Of customers that switched provider last month, 21.65 per cent did so from Eon. On the flipside, just 7.07 per cent switched to it.

This is a net swing of 14.58 per cent, a snapshot of customer switching habits from Compare the Market shows. ..

https://www.thisismoney.co.uk/money/bills/article-6808693/Eon-losing-customers-alarming-rate-new-report-reveals-customers-voice-frustration.html