LEADER OF THE HOUSE OF COMMONS CALLS ON LARGE DEVELOPERS TO STOP SELLING NEW HOUSES ON A LEASEHOLD BASIS

South West Bedfordshire MP Andrew Selous today raised the unacceptable practice of large developers buying freehold land on which they then sell houses on a leasehold basis. This is currently taking place with Persimmon in Leighton Buzzard and with Galliford Try (Linden Homes) in Dunstable. Taylor Wimpey, to their credit, have stopped this practice.

Speaking after the exchange in the House of Commons, Andrew Selous said “I was very pleased with the robust response the Leader of the House of Commons gave to my question. We need urgent action to stop this unacceptable practice now and also to quickly and cheaply correct these past unacceptable practices to enable local home owners in Leighton Buzzard and Dunstable to gain quick and cheap access to the freehold of their properties if that is what they want to do. I intend to carry on campaigning on this issue until developers stop this practice and help those already caught by it”.

The exchange in the House of Commons reported in Hansard is as follows:

Andrew Selous (South West Bedfordshire) (Con):

May we have an early debate, followed by legislation, to prevent the unacceptable practice of large developers buying freehold land on which they then sell new houses on a leasehold basis? Taylor Wimpey has, to its credit, stopped that practice, and I very much hope that Persimmon and Galliford Try will do likewise. Many young people and first-time buyers using the help to buy scheme feel that they are being ripped off by this practice, which is unnecessary and unacceptable, and we need action.

Mr Lidington:

I am grateful to my hon. Friend for raising this issue today. Developers should be building homes for people to live in, not creating income opportunities from ground rents or charging fees to alter properties, or selling on freeholds to investors or financial institutions. Other than in a very few exceptional circumstances, I do not see why new houses should not be built and sold with the freehold interest at the point of sale. My hon. Friend the Housing Minister has said that he intends to stamp out the “unfair, unjust and unacceptable abuse of the leasehold system”—[Official Report, 20 December 2016; Vol. 618, c. 1354.] and our housing White Paper highlights the Government’s commitment to consult on a range of measures to tackle all unfair and unreasonable abuses.