The Welsh Conservatives have called for the Welsh Government to cut out exploitative practices within the leasehold system in Wales.
The calls have been made by the Welsh Conservative Spokesperson for Housing and Planning, David Melding CBE AM, prior to a members debate on the issue in the Senedd.
Speaking prior to the debate, Mr Melding called for ‘radical change’ to make the market ‘cheaper, easier and fairer’.
Across the UK in the past 20 years, the proportion of new-build houses sold as leasehold has more than doubled. Huge numbers of properties are being sold under this tenure as a way to create a reliable stream on income for whoever owns the freehold.
The issue has gained significant momentum in recent months with the UK Government announcing measures to cut out unfair and abusive practices within the system, including a ban on leaseholds for almost all new build houses.
David Melding CBE AM has previously said:
“I am encouraged to see that the Conservative Party is leading the way to tackle this issue.
“Whilst the UK Government are clearly willing to take significant action, the Welsh Government still seem to be unclear as to whether they have the necessary powers to undertake such a move.
“The Welsh Government needs to start providing some clarity on this issue, as there are far too many people in Wales who are burdened by the unjustifiable practices in this market”.
“Whilst there are examples of leasehold tenures working well with their intended purpose, there are far too many problems including excessive cots to extend leases; stifling ground rents and a slow yet expensive sales process”.
“If we are too ease the current financial burden of housing in Wales, we need to see a radical change in the approach from the Welsh Government; and a ban on these practices would be a welcomed start”.
- It is believed that around 9% of new build houses are sold as leasehold in Wales.
- Issues of concern raised regarding this issue have included ‘onerous’ ground rent clauses which soon escalate from the affordable to the unaffordable and can make it difficult to sell the property. Other charges for consents to alter the property, and even permission to sell the property can add to on-going costs.
- Given the scale of the campaign for reform in England, including the work of the All Party Group on Leasehold Reform, the work of the Law Commission, and the steps already being taken by the UK Government, it seems unlikely that calls for reform in Wales will go away.
- The issue has gained significant momentum. A Welsh Government Decision Report from May 2017 “agreed support for the proposed Law Commission project to look at possible reforms to residential leasehold law”. So why haven’t the Welsh Government acted yet?
- Following the UK Government’s consultation on this issue, new measures were announced to cut out unfair and abusive practices within the leasehold system, including a ban on leaseholds for almost new build houses.