Today the National Trading Standards Estate Agency (NTSEAT) team has released a guide for consumers seeking redress for leasehold matters. This is the latest step taken by NTSEAT to help protect home buyers from confusing and complicated leasehold charges.
1.4 million houses are owned in England through a leasehold, including thousands of new builds, yet many buyers don’t fully understand what that means for them. The leaseholder buys the right to live in the property for a fixed term, often up to 999 years. A freeholder owns the property and often a management company runs the building or estate, passing the cost on to the leaseholder. Charges can escalate quickly, with some ground rents doubling every 5 or 10 years, which can cause significant financial hardship to the leaseholder. Many leaseholders are expected to pay for making alterations to the property, such as adding a conservatory or replacing the bathroom.
A recent survey by Propertymark found that 57% of leasehold house owners didn’t understand what being a leaseholder meant until they had already purchased the property and 62% of leasehold homeowners feel like they were mis-sold. 48% were unaware of the escalating ground rent.
This guidance contains a list of important definitions which are commonly found when purchasing a leasehold property. The guidance also explains what leasehold is and how it works, as well as giving examples of common issues. It is important that prospective buyers are equipped with the knowledge they need to make an informed decision, including where to turn should they need to make a complaint.
Housing Minister Heather Wheeler MP said:
“This Government is determined to reform the leasehold sector to better support homeowners, including improving support available to existing leaseholders.
“That’s why we have asked NTSEAT to produce this new guidance, which will help ensure that people understand their rights and responsibilities as leasehold property owners, including how to make a complaint if something goes wrong.”
Chair of National Trading Standards, Lord Toby Harris said:
“I hope this new guidance provided by NTSEAT will help to clarify the rights and responsibilities around owning a leasehold property.
“Property legislation can be complicated area, and this guide offers some practical steps for individuals to take in the event things go wrong.”
Notes to Editors
The National Trading Standards Agency team protects consumers and businesses by enforcing the Estate Agents Act (1979)
Research last year by Propertymark shows that:
- 93% of leasehold homeowners definitely wouldn’t buy another leasehold
- 51% feel like they’re paying for the same thing twice with ground rent and council tax
- One in 10 (10%) have had to pay to make alterations to their property. 75% were not expecting to be charged. Adding an extension (i.e. conservatory) is the most expensive alteration, with an average charge of £1,597. This is closely followed by installing new bathroom units (£1,472) and making structural changes (£1,348).