The Great Leasehold Betrayal

Minister REFUSES to crack down on toxic contracts

  • MP Heather Wheeler dismissed claims of mis-selling in toxic leasehold deals

  • Appeared to play down number affected saying it could be 12,000 not 100,000

  • She said she would prefer to rely on developers and property companies voluntarily giving families better terms than setting new legislation

A housing minister has refused to help families stuck in toxic leasehold deals.

Heather Wheeler dismissed claims of mis-selling and said fresh legislation would trigger a ‘horrendously expensive’ wave of compensation claims.

She appeared to play down the numbers affected, saying it could be as low as 12,000 and not the 100,000 cited by campaigners.

And she said buyers might have been ‘caught up in the moment’ and ‘excited’ when they signed leases for first homes.

Mrs Wheeler said she would prefer to rely on developers and property companies voluntarily giving families better terms.

Government estimates suggest there are 4.3million homes with leases in England, 1.4million of them houses.

Some double charges every decade, while other freeholds are sold on to third parties who only allow homeowners to buy them out for exorbitant fees.

Ministers have pledged to outlaw the sale of newly built homes with leases following a public outcry.

But Mrs Wheeler’s comments suggest those already hit by the problem will be left to fend for themselves.

Speaking at a Commons committee, Mrs Wheeler said legal advice showed legislation would be ‘horrendously expensive’, adding: ‘I’d much rather go down the voluntary route.

There have been agreements between freeholders and leaseholders and clearly we want that momentum to carry on.’

The issue has been dubbed ‘the PPI of the housebuilding industry’ – a reference to the mis-selling of payment protection insurance by banks. 

Labour’s Tan Dhesi, an MP on the housing committee, said: ‘The situation many leaseholders are faced with is shocking and the minister’s response was wholly inadequate, to put it mildly.

‘The only way to solve the problem is with legislation.’

Home Secretary Sajid Javid vowed when he held the housing portfolio to outlaw the use of leaseholds on newly-built homes in December 2017, branding the practice ‘feudal’.

But more than a year later, campaigners say those trapped in toxic contracts are no closer to escaping them.

Despite many leaseholders claiming they were not made aware of the full terms of their contracts, and suggestions it was similar to the PPI scandal, Mrs Wheeler said she did not agree it was an example of mis-selling.

The 59-year-old, who owns her constituency home in Burton-on-Trent outright according to the Land Registry, previously sparked controversy when she tweeted that the ‘British Empire’ came first with 396 medals in the Rio Olympics, referring to Britain and countries that were formerly its colonies.

Mrs Wheeler told MPs the comparison to PPI was difficult ‘because in effect with PPI you were sold something you really didn’t need, whereas this is completely different’.

She added: ‘There is a contract, there was legal advice but perhaps people are caught up in the moment because it is their first purchase and it is incredibly exciting.’

 ‘We haven’t actually got on record how many of the four million leaseholders have onerous leases. The ones we have got to crack down on are the onerous leases.

‘And that varies between 12,000 and 100,000. That is a much, much smaller figure than four million. Let’s put it in perspective, chair… Not that I want to use the figure of 100,000, but 100,000 of four million does put it in perspective.’

And that varies between 12,000 and 100,000. That is a much, much smaller figure than four million. Let’s put it in perspective, chair… Not that I want to use the figure of 100,000, but 100,000 of four million does put it in perspective.’

Contact us today for advice on how we can help you unlock yourself from this leasehold nightmare: 

Gareth.fatchett@fsl.legal