The Prime Minister has waded into the argument surrounding developers buying freehold land in Leighton Buzzard and Dunstable but selling the houses on a leasehold basis.
Theresa May has been alerted to issue by South West Beds MP Andrew Selous who has said the practice “stinks” having had constituents complain about Persimmon’s Lake View development in Leighton Buzzard and Linden Homes’ Kaleidoscope estate in Dunstable.
One prospective buyer told the LBO he wanted locals to boycott purchasing properties at Lake View because of the leasehold practice.
And now his MP has raised the matter at Prime Minister’s Questions in The Commons.
Mr Selous asked: “As a leader who wants to spread wealth and opportunity as widely as possible, will the Prime Minister ensure that we end the practice of developers buying freehold land on which they then sell new houses on a leasehold basis? Many first time buyers on Help to Buy feel that they are being ripped off by this practice and look to the Government for help.”
The Prime Minister replied: “Our housing White Paper clearly sets out that developers should be building homes for people to live in. That means that we will act to promote fairness for the growing number of leaseholders, but we will consult on a range of measures to tackle unfair and unreasonable abuses of leasehold, as the Housing Minister has said. Other than in certain exceptional circumstances, I do not see why new homes should not be built and sold with the freehold interest at the point of sale.”
Speaking afterwards Mr Selous added: “I am delighted to have had this further robust response from the Prime Minister following on from the answer I received from the Leader of the House of Commons. I now call on Galliford Try and Persimmon to stop selling any further new houses on a leasehold basis and to make immediate arrangements to enable those residents who bought their new houses on a leasehold basis to purchase their freeholds speedily and affordably.
“The reputations of these two companies are at stake and I will be watching carefully to see how they behave.”
A spokesman for Persimmon Homes Midlands said: “Persimmon, together with many UK developers, sells a mixture of both leasehold and freehold properties. All flats sold in England are leasehold.
“All current Persimmon leasehold houses carry an extremely long 999 year lease and customers are informed at purchase what type of property they are buying.
“The ground rent is fixed for 10 years at £150 per annum and increases by RPI after this time periodically.”
A spokesman for Galliford Try has so far not responded.