Government committee talks about leasehold problems but no action yet

“The UK’s leasehold system has left a number of householders in unsellable and unmortgageable homes and changes are needed, a committee of MPs says.

Often leaseholders in new-build properties are treated as a source of profit, the Housing, Communities and Local Government Committee (HCLG) says.

It says the Competition and Markets Authority (CMA) should investigate mis-selling claims.

The CMA should also make suggestions regarding compensation, they say.

Leasehold house owners are often charged expensive ground rent as well as fees if they want to make changes to their homes. A leasehold house can also be difficult to sell.

Developers say that in all transactions, builders aim to provide prospective purchasers, their solicitors and their mortgage lenders with all relevant information.

But the HCLG committee said stories from leaseholders showed failings in the process.

Elements of the current system, which the committee highlighted as needing attention, include claims of onerous ground rents, high and unclear service charges and one-off bills, unfair permission charges, imbalanced dispute mechanisms, inadequate advisory services, and unreasonable costs to extend leases.

It wants to see a standardised key features document provided by a developer or estate agent at the start of the sales process.

‘Landlord and tenant’

The committee said: “It is clear that many of the leaseholders we heard from were not aware of the differences between freehold and leasehold at the point of purchase, in particular the additional costs and obligations that come with a leasehold property.”

Someone who owns a property outright, including the land it is built on, is a freeholder.

With a leasehold, the person owns a lease which gives them the right to use the property. But they still have to get their landlord’s permission for any work or changes to their homes.

When a leasehold flat or house is first sold, a lease is granted for a fixed period of time, typically between 99 and 125 years, but sometimes up to 999 years – although people may extend their lease or buy the freehold.

The HCLG report said people with leasehold properties are in a “landlord and tenant” relationship with their freeholder.

It said ground rents have in some cases increased to a level which leaves properties unsellable and un-mortgageable.

Government figures suggest there were 4.2 million leasehold properties in England in 2015-16.”

https://www.bbc.co.uk/news/business-47618086

Now new Barratt homes in Devon getting bad publicity for faults

“What was meant to be a family’s forever home has turned into a living nightmare after they suffered more than 100 problems with their new build – including a millipede infestation.

They moved into their detached four-bed house, built by Barratt Homes in tucked away development Hawthorne Rise in Newton Abbot, nearly two years ago and say they have since had more than 100 snagging issues with the property.

The mother-of-two, who asked not to be named, says the latest issue to be investigated is insufficient drainage in their sloping garden which has caused a millipede infestation and it to become boggy. …”

https://www.devonlive.com/news/devon-news/family-say-dream-home-turned-2659117

Want to know which tax haven companies own property in your town?

“IN September 2015 Private Eye created an easily searchable online map (see below) of properties in England and Wales owned by offshore companies. It reveals for the first time the extent of the British property interests of companies based in tax havens from Panama to Luxembourg, and from Liechtenstein to the South Pacific island of Niue. Most are held in this way for tax avoidance and often to conceal dubious wealth.
Using Land Registry data released under Freedom of Information laws, and then linking around 100,000 land title register entries to specific addresses, the Eye has mapped all leasehold and freehold interests acquired by offshore companies between 2005 and 2014.

Using this data the Eye published a series of exposes of the companies, arms dealers, oligarchs, money launderers and others who use offshore companies. Now Private Eye, using the same data, is also publishing a database of all properties acquired by offshore companies from 1999 to 2014, showing the address, the offshore corporate owners (some have more than one) and, where available, the price paid.

To download the 1999-2014 database,follow instructions on the website

Download the FREE Tax Haven Special Report follow instructions on the website.

http://www.private-eye.co.uk/tax-havens

No anti-corruption move on property ownership since promised in 2016

“More than £100bn of property in England and Wales is secretly owned, new analysis suggests. More than 87,000 properties are owned by anonymous companies registered in tax havens, research by the transparency group Global Witness reveals.

The analysis reveals that 40% of the properties are in London. Cadogan Square in Knightsbridge, where the average property costs £3m, hosts at least 134 secretly owned properties. Buckingham Palace Road is also home to a large number, with a combined estimated value of £350m.

The revelation comes as parliament’s joint select committee on the draft registration of overseas entities bill meets on Monday to hear evidence on the impact of property ownership by anonymous companies.

The government committed to introduce a register of UK property owners at its anti-corruption summit in 2016, but since then progress has been slow.

“It’s increasingly clear that UK property is one of the favourite tools of the criminal and corrupt for stashing and laundering stolen cash,” said Ava Lee, senior anti-corruption campaigner at Global Witness.

“This analysis reveals the alarming scale of the UK’s secret property scandal.”

The combined value of the properties was at least £56bn, according to historical Land Registry data at the time of their acquisition. Once inflation is factored in this would exceed £100bn.

Some 10,000 of the properties are in Westminster, while almost 6,000 are in Kensington and Chelsea. Camden is home to more than 2,300 of the anonymously owned properties while almost 2,000 are in Tower Hamlets.

Global Witness says its investigations have shown how criminals and corrupt politicians use the UK property market to hide or clean dirty cash, and to secure safe havens for themselves and their families.

In 2015 it revealed how the mystery owner of a £147m London property empire owned via a network of offshore companies could be linked to a former Kazakh secret police chief accused of murder, torture and money-laundering.”

https://www.theguardian.com/uk-news/2019/mar/17/100-billion-of-uk-propert-secretly-owned-anonymous-firms-tax-havens

Today’s promise of 30,000 housing association dwellings put into perspective

Owl says note that the “affordable” hoysing will still be 80% of market value … making these homes still unaffordable for those on low incomes.

Chancellor Philip Hammond has today committed £3billion in extra borrowing to deliver 30,000 new affordable homes in England.

In the Spring Statement, the Chancellor announced that the Government will guarantee the extra borrowing by housing associations to support the delivery of the homes, but did not supply a timetable for delivery.

The Chancellor also announced that £717million from the £5.5billion Housing Infrastructure Fund will be used to help ‘unlock’ up to 37,000 homes at sites including Old Oak Common in London, the Oxford-Cambridge Arc and Cheshire. …”

BUT IN THE SAME ARTICLE:

“In November This is Money revealed that local councils have fallen over six years behind their own house building targets.

Councils’ own figures revealed that development across the UK is moving at such a glacial pace that 316 sites will have fallen short of targets by 889,803 homes within the next eight years. …”

https://www.thisismoney.co.uk/money/mortgageshome/article-6804561/Spring-Statement-Housing-associations-borrow-3bn-build-new-affordable-homes.html

“Persimmon Homes missing fire safety barriers confirmed in Cornwall as well as Devon”

“A Persimmon Homes family say their home is like living in a chimney, after discovering vital fire safety barriers were missing from their home.

The owner of the property, who wished to remain anonymous, asked for his property in Truro to be inspected after reading of the safety issues with homes in Exeter on Devon Live.

In January, a Persimmon Homes whistleblower urged all home owners to have their properties inspected after claiming the problem is widespread. Up until then, the building firm had only confirmed properties in one of its developments, Greenacres, and the Newcourt area near Topsham, had failed inspections.

The whistleblower – a Persimmon Homes employee – alleged the issue was not confined to the one development. Among other developments the employee claimed could also fail inspections were:

Coverdale, Paignton
Harford Mews, Ivybridge
Hill Barton Vale, Exeter
Agusta Park, Yeovil
Heathfield Gardens, Monkton Heathfield, Taunton
Chilmark Glade, Shaftesbury

Since then failures have also been reported at Persimmon Homes in East Devon new town Cranbrook, and now at Lowen Bre in Truro – which is the first confirmation the issue has been highlighted in Cornwall as well as Devon.

The issue was exposed following a ‘ferocious’ blaze which broke out in Trafalgar Road off Admiral Way and Topsham Road, last April, which spread into the roof spaces of two of the adjoining properties.

After reading the whistleblower’s recommendations on Devon Live, the owner of a house in Lowen Bre asked Persimmon Homes to inspect their five-year-old home, when cavity barriers were found to be missing, as well as stops and socks which prevent the spread of fire through walls and floors.

The owner, who asked not to be named, said: “My house is like a chimney because if there was a fire it would spread pretty quick through it. It’s negligence by Persimmon Homes and the National House Building Council (NHBC) who have signed the property off.

“After our home failed the inspection a few days later they returned and they were put in place, but I’m also missing about 50 per cent around the windows. We have 20 odd windows and doors.”

The development the owner lives on has about 160 homes and it is believed letters have been sent to some of its residents.

The home owner said: “I want to make everyone in the development aware of the issue so that they can get their home checked.

“As a national house builder, Persimmon Homes have a duty of care to ensure their homes are built correctly and I feel that this issue shows a lack of adhering to building regulations.

“We have lived in our property since October 2013. All this time we have been at constant risk due to the required fire safety details not being installed. With children in the house whose bedrooms are both on the top floor, it makes this situation even more unbelievable.”

The builder has already come under fire by residents after their voiced their frustrations after it took four years for work began on its promised as a condition of its planning permission.

Residents said they had to endure countless promises of start dates from Persimmon Homes for work at the playground to begin which were then broken the company.

A spokesperson for Persimmon Homes said: “The development as a whole is being inspected as part of the ongoing process. As Persimmon Homes has already confirmed it has committed to a thorough inspection process to ensure the required standards are met and is undertaking remedial work wherever the need is identified.

“Persimmon Homes has a dedicated team in place to deal with any remedial work that is required, and customers on any of our developments can make contact at any time if they have concerns.”

Persimmon Homes did not provide a response to the following questions:

1. Of those inspected so far in Lowen Bre how many ave passed?

2. A list of development where inspections are being carried out in Cornwall, Devon and across the country.

3. The results of those inspections so far.

A spokesman for the NHBC said it had not received any contacts or claims concerning fire safety barriers at Lowen Bre in Truro.

He said: “Any homeowners with an NHBC Buildmark policy who have concerns about this issue can contact our claims team who will be happy to provide them with advice and support. As the UK’s leading warranty provider we care passionately about the quality of new homes.

“We work with builders to help them improve the construction quality of the homes they build for the benefit of our policyholders, the homeowners.

“NHBC’s inspection regime is not a replacement for the builder’s own quality control checks and obligations to build in accordance with building regulations.”

https://www.devonlive.com/news/devon-news/persimmon-homes-missing-fire-safety-2633631

Shock news: ‘Government Agency ‘U-turn’ puts Axminster relief road at risk…’

EDDC press release:

“The £17m relief road and 850 homes, in the Masterplan for the east of Axminster, have been put at risk by a late change in Homes England funding.

East Devon District Council has reacted with dismay to news that government agency Homes England has changed how it is assessing the council’s £10 million bid for Axminster relief road.

The council bid for a non-repayable grant in 2017. This bid was accepted in February 2018, to be used to help fund the delivery of the crucial new relief road and associated homes, employment land and community facilities.

The council has now been told by Homes England that a new condition of the funding is that the money must be repaid by the development.

Council leader Cllr Ian Thomas is enormously concerned that the decision potentially puts the Axminster Masterplan in jeopardy.

He said: “We are dismayed by this fundamental change of mind. It throws the whole Axminster scheme up in the air and means that the effort we and our partners have put into this critical scheme over the last 12 months may have been completely wasted.

“Since I was first elected leader, I have been absolutely consistent that we don’t simply build homes, we build sustainable communities. The Axminster Masterplan is an excellent example of such a community. It would bring enormous social and economic benefit to Axminster, by delivering high quality affordable housing and employment land, together with other essential community facilities. After this decision from Homes England, it feels like we are back to square one. It’s bitterly disappointing.

“We understand that our scheme is one of a number across the country where similar funding decision changes are being made, as Homes England assesses the viability of schemes on a fundamentally different basis, to that applied in our original agreement with them.

“Our council is now considering its options. This includes taking legal advice to investigate whether we may have strong grounds to challenge Homes England’s decision.

The masterplan for 850 homes with employment land, open spaces and community facilities was endorsed by the council’s strategic planning committee in January. The plan was based on the money from Homes England not being repaid and even then, the development could only be made viable by expanding the site area and increasing the number of homes proposed to around 850. The amount of affordable housing required from the additional 200 homes was also reduced from 50% to 25%.

Following a decision by Homes England last week, it would appear that the development will have to repay the £10 million of government “grant” and the masterplan is no longer viable in its current form.

The council must also consider revisiting the masterplan to understand the consequences of the decision for the amount of affordable housing, employment land and community facilities to make the development viable again.

Throughout the masterplan process, the council has always been clear that the urban extension of Axminster is not just about delivering housing and the relief road but is about helping the town grow as a community in a sustainable way supported by the services and facilities that it needs.

The council is frustrated that Homes England’s change in approach puts this all at significant risk and could make the development undeliverable. It will be seeking an urgent meeting with Homes England to discuss this case and other implications for investment in the district.”