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Report on Mis-selling in the Home Moving Process

Our responses is in the main are critical of leasehold; although in the past it has been an adequate vehicle for the enforcement of covenants required to maintain shared amenities, the balance of power between landlord and leaseholder is one that it is open to abuse and there is increasing evidence that – in a minority of cases – it is in fact being abused.

Whilst we recognise that the vast majority of existing leases can work well to balance the interests of the parties, the growing number of these abusive behaviours means that leasehold can no longer be considered a trusted means to balance the benefits and burdens of community living without some form of legislative intervention.

Our report will look at ways in which the leasehold system is being manipulated to the detriment of consumers; but we also note two economic factors which have affected the operation of leasehold.

First, the low levels of new housing supply now means there is rarely a true discount on the amount paid for the purchase of leasehold property which, in the past, was reflected in future ground rent payments.

Second, leasehold is by nature a wasting asset and is a continuing challenge for future generations who will have to deal with leases considered technically ‘short’ and requiring additional premiums to be paid to create an acceptable asset value for mortgage lenders.

We have set out in the attached the main issues which we have identified and would welcome the opportunity to share the evidence which we have accumulated around leasehold abuse but also more widely the failure of those marketing property to comply with CPRs and the resultant impact on the home mover.

Download report here

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