In the leasehold scandal in England 100,000 homebuyers are trapped in developer contracts with costs exponentially increasing. Leasehold houses are different from freehold houses. In the freehold way, the buyer has complete control over the property. But on leasehold, the buyer lives like a long term rental. He has to ask the permission of the freeholder before making any changes to the property. Also he has to pay an annual “ground rent” to the freeholder.
In Britain, the leasehold process was a traditional one. But last, there was the leasehold scandal and it is still raging. The question is how can buyers get rid of the mortgage problems. Sadly most of them are trapped with many clauses, while some are going for leasehold claims to help get some financial compensations.
One of the most troubling cause is that the ground rent doubles every ten years. In that case, the buyer can’t sell the house to someone else because nobody will buy a house with Doubling clause. Another issue is that even though you try to mortgage it and try to rent the property out, lenders won’t offer mortgages on houses with doubling clauses.
Taylor Wimpley informed the press that all the buyers accepted legal advices from lawyers and then signed the lease. But government is now all set to ban the leasehold and try and compensate the ones already in contract. The government also wants to cut the ground rent to zero. Even though Taylor is trying to hold the tenants with his assistance campaign, many condemn him for his hypocrisy.
Now the critical reports by the Law Commission and HCLG Select Committee have shifted the focus towards existing leaseholders. And the government will hopefully take care of the issue.
