First time buyers in Harrow are being let down by current leaseholds law, an MP has said.
According to MP Gareth Thomas, around 30 properties were sold on the new Harrow View West site on a leasehold basis, but subsequent properties on the site were sold as a freehold, often for the same price or even less.
Harrow View West replaced the iconic Kodak factory, one of the oldest and largest businesses in the borough, which employed around 6,000 people at its peak.
Mr Thomas, who represents Labour for Harrow West, says many home buyers were not given enough detail about purchasing homes on a leasehold basis, in some cases until they had already spent significant sums ahead of final exchange.
He said: "Home ownership is increasingly a pipe dream for many people, so it is even more disappointing to see that those who do manage to purchase what they believe will be their dream property are being let down by developers.
"It is clear that property developers around the country have been exploiting the current law on leasehold, and using uncertainty around these practices to squeeze as much as they can out of hardworking home buyers."
The MP claimed that residents of Harrow View West were told by the developer, Persimmon Homes, that the entire site would be sold leasehold to retain the aesthetics of the development, but many homes were subsequently sold on a freehold basis.
The majority of residents were first time buyers who used the solicitors and mortgage brokers recommended to them by Persimmon, Mr Thomas said.
Freeholders own both the property they purchase, and the land it is on. By contrast, leaseholders do not own the land, but take out a lease on the property and are charged ground rent by the freeholder.
Mr Thomas added: "Ground rent costs can escalate quickly, and many developers have sold the freehold onto third parties meaning leaseholders can find it difficult to track down the true owner of their property.
"I’m fighting in Parliament for a fair deal for leaseholders, but in the meantime I hope Persimmon will recognise the unfairness in their dealings with the residents in Harrow View West and come up with a satisfactory solution.”
Persimmon Homes says the situation was caused by "changing circumstances" and that it was working with some residents with regards to the purchase of freeholds.
A spokesperson for Persimmon said: "We have been in discussions with a small number of residents to confirm to them that they may purchase the freeholds after a two-year period of ownership, and that Persimmon is committed to retaining ownership until then.
"As a result of changing market conditions, the later phases of the development have been sold as freehold."
The MP has written to the chief executive of Persimmon Homes to urge them to "end this unfairness", and ensure that all home buyers at the Harrow View West site are given equal access to the freehold on their properties.
He has also supported a campaign in Parliament.
He formally supported a new bill that would introduce a maximum charge for leaseholders to purchase the freehold, end unfair practice in which leaseholders pay the legal costs of freeholders in tribunal cases, and establish a compensation scheme for cases where leaseholders were misled by property developers.
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