Ian Austin MP

Labour MP for Dudley North

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Local MP calls for action on contracts that rip off Dudley residents

Dudley MP Ian Austin has backed Black Country home-owners who feel ripped off by their leasehold contracts, calling for the Government to launch an inquiry into the scandal of miss-sold leasehold homes.

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An estimated 18% of homes in the West Midlands have been sold as leasehold in the most recent year for which data is available, and a total of 4.3 million properties across England – almost one in five of all homes – are classified as leasehold.

This arrangement, which is most common for flats, means homes are bought but leased rather than entirely owned, with leaseholders often paying a ‘ground rent’ as well as service charges to the property freeholder, or to a managing agent acting on their behalf.

Homeowners who purchased the leasehold of their property are often locked into contracts which force them to seek permission to make basic alterations or to build extensions such as conservatories, despite no planning permission being required.

Some leaseholders find they’re obliged to pay extortionate ground rents, while others are locked into rip-off service charges. Many didn’t choose their own solicitor and feel they were poorly advised when purchasing their home. Survey data suggests almost six in ten leaseholders didn’t understand what being a leaseholder meant until they had already purchased the property, and more than nine in ten leaseholders regret buying a leasehold property at all.

In the House of Commons this week, Labour’s Shadow Housing Secretary, John Healey MP, challenged Government Ministers to set up an inquiry into the miss-selling of leasehold homes.

Ian Austin said:

“I have been contacted by a number of people in Dudley who feel really ripped off from their leasehold contracts.

“I have heard of cases where private tenants were asked to contribute payment to a council tenant’s front door in a black of flats. Another was asked to pay thousands for a new roof on their block of flats when the Council decided to do the work – with no consultation.

“This is unfair for the hard-working people who have brought their own property but are far from being able to make decisions about their home.”

Labour’s Housing Secretary, John Healey MP said:

“Leaseholders find they’ve bought their home but still don’t own it, and many feel ripped off by unfair leasehold contracts.

“This is a national scandal but the Government’s action to date has been too weak, too slow and has overlooked the plight of existing leaseholders. Ministers must act to back an inquiry into this systematic leasehold miss-selling, as with other miss-selling scandals like pensions, endowment mortgages and PPI.”

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