Liverpool bans major house-builder over leasehold scandal

A major house-builder has effectively been ‘banned’ from building properties in Liverpool due to the continuing leasehold scandal, it was reported this week.

Liverpool City Council will no longer assist Countryside Properties with its developments and it will not sell the company any of its land either because of the on-going scandal over leasehold houses, it was reported this week.

Mayor Joe Anderson has written to those living in several housing estates promising the council would block Countryside from building houses “because of this leasehold scandal”, Telegraph Money has revealed.

What is the leasehold scandal?

Flats are typically sold under leasehold terms. However, over the past ten years the amount of new-build leasehold houses has rocketed.

And they’re not good news for home-owners. In some cases, people have faced spiralling ground rent costs, with the fees doubling every ten years. And in many cases people have been left unable to afford to buy the freehold themselves.

The Government has promised to ban the sale of leasehold houses as part of a wider reforms. And there’s lots more that needs to be done to bring better protection for leaseholders.

What happened in Liverpool?

The row between Liverpool City Council and Countryside began when residents in some of the firm’s developments thought they had guarantees to buy the freehold at a given price.

However, it later transpired Countryside had sold the freehold onto investors – who were quoting buyout prices three times as high.

Countryside has since promised that where it remains the freeholder, it will sell the rights back to homeowners at the original price. It also pledged to peg annual ground rent rises to no more than the rate of inflation.

In a statement to the Telegraph, Liverpool Council says:

“We do not allow leasehold houses on any schemes where we are a development partner.

“In addition, in the case of Countryside Properties, following issues raised by residents about leaseholds on some of their housing developments, we are no longer providing assistance to them with site assembly and selling them council-owned land.”

More action is needed

By taking a stand, the Mayor of Liverpool is standing up for the rights of homeowners – hopefully others will follow.

The HomeOwners Alliance Chief Executive Paula Higgins says:

“It’s great to see the council standing up for its residents. We need more political leaders setting out clear standards for how developers should treat customers.

“Leasehold is a racket and politicians are just standing by watching as developers take advantage of people” she adds.

Sebastian O’Kelly of the campaign group Leasehold Knowledge Partnership, said Countryside and other developers had “played all the angles of leasehold“.

He added that developers had benefit from billions of pounds spent by the Government on the Help To Buy programme for first-time buyers.

Sebastian O’Kelly added:

“The leasehold scandal has shown how rotten our house builders are,” he said. “Even when handed a generous subsidy by all of us they cannot resist ripping off their customers with leasehold games. We wholeheartedly applaud the Liverpool mayor sending them packing from his city.”

Countryside “surprised” by the Mayor’s move

In response to the story, a Countryside spokesperson told the Telegraph:

“Wherever possible, we sell properties on a freehold basis. Where we have to offer leasehold properties, we make sure that they are affordable on both an initial and ongoing basis.

“Where we have historically sold houses on a leasehold basis – something we no longer do – and own the freehold, we have already written to all residents and offered them the opportunity to buy back their freehold, at cost.

“So, we were surprised to read in a letter sent to local residents by the Mayor of Liverpool that he will make this demand of Countryside when it is something we have already done, where we are able to do so.

“We are seeking to make contact with the Mayor’s office to discuss these matters further.”

Kindly shared by HomeOwners Alliance (HOA)