/ Money

Leasehold housing scandal: have you been affected?

There are a series of issues around leasehold new-build houses – including clauses that make ground rents rise to thousands of pounds a year. Isn’t it about time this system was fixed?

Update 19/03/2019

The Housing, Communities and Local Government (HCLG) select committee has today launched a new report calling for an overhaul of the leasehold system.

Read our latest news

It recommends replacing leasehold with commonhold for flats in England and Wales and setting ground rents to a peppercorn rate. It also advises the Law Commission to investigate compensation for the possible mis-selling of homes with onerous ground rent clauses.

Original convo 14/06/2019

Along with issues of onerous doubling ground rent clauses, today’s Which? Money investigation has highlighted issues with developers selling freeholds to third parties without informing the homeowner, and unreasonable fees for everything from changing a doorbell to having a pet.

The government plans to bring in legislation to ban spiralling ground rents and stop houses being sold as leasehold – but what of those people already trapped in properties that are effectively unsellable?

Key issues explained

We’ve looked at three key areas that are causing heartache for homeowners. First up, let’s look at doubling ground rent clauses.

It’s common for leaseholders, especially in flats, to pay ground rent to the feeholder. However, the amount isn’t capped, and at least one developer has been inserting clauses into leases that make those payments double every 10 years. Paying £295 a year now? In 50 years’ time it’ll be £9,440.

The next key area concerns freehold sales and punitive permission fees. Developers have been selling freeholds on to third party investment companies without notification. If the leaseholders are able to get in touch with these companies, they’re confronted with astronomical costs to purchase the freehold.

In many cases, freehold sales to third parties have resulted in punitive ‘permission fees’, where the leaseholder has to pay the freeholder to ask to make alterations to a property. Some leaseholders report being charged £108 just for a response to a letter.

Finally, there are issues in buying and selling leasehold homes. Sellers are struggling to shift their properties at market value, while buyers are seeing their mortgage offers revoked. For example, Nationwide and Santander are both refusing to lend on doubling ground rent clauses.

Loosen the leasehold noose

Housebuilder Taylor Wimpey has set up a fund to cover the costs of converting leases so that ground rent rises in line with RPI, rather than doubling every decade, but we’ve found that obtaining the ‘Deed of Variation’ (which changes the lease) can be a lengthy process.

It’s also an option only available to people who bought directly from Taylor Wimpey, so those who’ve bought second-hand properties are effectively stuck.

The government launched a consultation last year, and in December confirmed its plans to overhaul the leasehold system, though its main focus is on stopping these issues arising for homebuyers in the future.

It’s also working with the Law Commission to try to help homeowners who are already facing the problems we’ve uncovered – for example, it has pledged to investigate making freehold purchases ‘easier, faster and cheaper’.

Unfortunately, this process is likely to move very slowly, so it could be some years before homeowners are truly offered the redress they’re waiting for.

Have you been affected?

We want to see firm action from the government to protect home owners and ensure that no-one loses out as a result of these unfair practices in the future. It’s not acceptable that some families are being ordered to pay extortionate fees under threat of losing their home.

If you’ve experienced leasehold issues we want to hear your stories. Let us know what happened and if you’ve been able to resolve the situation. Do you agree that it’s about time the government puts a stop to this scandal? Let us know.


The whole thing smacks of greed and sharp practice. I do wonder whether those purchasing new properties should have this lease clause pointed out to them before they decide to buy. If they do then go ahead, they should know what they are taking on and accept the consequences of rising fees and poor re-selling prospects. I would also hope that enough people refuse to buy these properties to make the builders stop doing this. There is a strong case for the government to outlaw this mode of extracting money, after a house has been sold, and they should also rescind any agreements made previously, where it can be proved that the lease arrangements were not made clear to the purchaser. I am glad that mortgage companies are taking a stand here too.

I inherited half a flat recently only to find out that it not only needed a huge amount of work to bring it back up to standard (my mother had dementia for 5 years prior to her death, whom I nursed for five years) but also that the lease had less than 50 years remaining, and an investor had purchased that lease and was now demanding £20,000 plus, in order to extend to enable a sale of the property. Or I could sell it to a cash buyer who would snap it up at a huge discount knowing that I would be in a desperate position. I feel truly robbed and am only grateful that my mother didn’t live to find out that she had been shafted by these people in such a way. I am basically held to ransom by this person. The flat has been completely de-valued by this practice.

To make matters worse, I now also find that my own home is also leasehold and this too will shortly fall into the category of ‘buy the lease or find your property unsaleable’.

When will someone help the working class person, who was encouraged to buy their own home but is now being completely screwed by this totally unfair practice?? I fear no one. It is awful.

I fear that the Government will indeed focus on new properties and there will be little help for the thousands of existing homeowners who are trapped by this practice. Half of them probably don’t even know about it. I didn’t. Why has this not been highlighted on TV, for example? Does no one care about us?

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Solicitors should surely make their client aware of such onerous conditions. But are people so intent on getting on the housing ladder at any cost that they shrug these things aside and don’t look too far ahead?

Why do we have leasehold houses in the first place? I’d legislate to ban leasehold as a commercial practice. However, I believe that we should price the land on which houses are built quite differently. At presently, converting “ordinary” land into building land brings huge windfall profits to the owner, and all determined by the gift of planning permission by the local authority. I would like to see all land suitable for housing bought at much lower prices by the local authority, still giving the owner a reasonable price but not the huge prices currently achieved. The local authority then leases the land in perpetuity to the home owner on sensible terms. This should gradually restrain the cost of houses.

@vynorhill @malcolm-r I agree with you both that people should certainly be made aware of just how serious these clauses are before purchase. In some cases the clauses may have been raised, but is it being explained in enough detail just how serious the consequences of them are? For first-time buyers with little to no knowledge of leaseholds and freeholds this is a real problem.

But it shouldn’t be George. If people are not sufficiently savvy to understand what they are doing, their solicitor should understand this and point things out. One way or another anyone buying such a property needs to be fully informed. One can advise, but finally the decision is with the purchaser and anyone unsure about this major, major, purchase should heed advice that is given to them. It is difficult to protect anyone further than this. having said that this whole retrospective -continuum – lease practice is little short of criminal.

I really wish that the solicitor advising me HAD explained the lease sufficiently for me to make an informed decision but they didn’t! I work in health and would never hand a patient a medical journal and say “have a read of that and questions just ask- then we will do your op” ! And yet solicitors do this all the time. Unacceptable

It’s worth looking at this on what the government has said it will do to cut out bad leasehold practices –

Inevitably, I suppose, it refers to “the broken housing market”; I am fed up with that description for everything that isn’t quite right after many years of government or commercial meddling.

I agree and I question whether the government is conscientious about it at all.

Where leasehold houses will not sell at realistic valuations because of the unfair terms perhaps the government should step in and either buy the property itself or at least guarantee the sale. The government could then deal with the freeholder directly and release the leaseholder from the restrictive conditions.

David H says:
14 June 2018


I’m part of the NLC [campaign] and We have a leasehold property.

We were mis sold the property and mis represented by the conveyancing solicitor. [2015]
The lease itself was sold without our knowledge by the Developer just after moving in. we were not consulted nor approached to purchase it.
It now resides with Aviva via their agent Mainstay. We pay £250 / year thus will increase in accordance with RPi in approx. 9 years.
There are covenants with the lease if we wish to further develop or improve the property in the future some permissions carry a fee.

Overall our lease compared with others isn’t one of the very bad ones in my limited opinion, however we feel strongly mis-sold from the outset and we fear that our home has now been devalued as the developers are now selling the same dwellings as freehold, this coupled with educated buyers and we are finding that owners with properties that are leasehold on our development are struggling to sell and/or are having to take a loss.

Paul Fallows says:
14 June 2018

The freehold of my new apartment block was sold after 7 months of being finished. A new management company was imposed on us and the costs doubled. I pay £360 just for having the management company. The rest of my £2k pa is spent on things I know we are being charged in excess of the real cost. I feel powerless

You don’t actually get to see all the terms and condition and even when you ask for a copy, they will not provide it, so they can do more or less what they want. Even worse than the lease owners are the flat management companies who charge large amounts yet provide little service.

I was sold a flat in London by Countryside Properties in 2015.

They incentivised me (stamp duty and legal fees contribution) to use one of their ‘approved’ solicitors and indicated we’d be at risk of losing the property if a different conveyancer couldn’t keep to the very tight exchange and completion deadlines Countryside impose upon their purchasers. If I didn’t use their approved solicitor then I wouldn’t get stamp duty and legal fees covered by them. When you’re a first time buyer, every penny counts and I jumped at the opportunity, reassured by the ‘HM Government Help to Buy’ logos splashed all over the sales office, and the fact that I thought I would be looked after by an independent legal professional. I felt this was a transaction I could trust. The solicitor raised absolutely no concerns about the ground rent and gave no advice around it apart from that it started at £200 and would be reviewed in future. I had more detail about the communal heating system than my ground rent in the ‘report on title’ put together by the solicitor.

Fast forward a few years and now we’ve established:

1. Ground rent on the flat starts at £200 per annum and doubles every ten years for the first fifty years of the lease and later linked to the market value of the property.

2. Parking spaces were sold on a SEPARATE lease, with a ground rent of £75 doubling every ten years for the first fifty years of the lease and later linked to the market value of the parking space.

3. Our freehold was sold on to an offshore investor (Adriatic Land), bypassing our legal right to first refusal by using a loophole in leasehold law.

4. The new freeholder (Adriatic Land) has imposed a whole host of permission fees on leaseholders, anything from owning a pet, subletting, selling the property, making any modifications now attracts a hefty fee which was never mentioned during the sales process.

After a lot of lobbying and garnering media attention by affected residents, all in their spare time, Countryside Properties, Adriatic Land and their agent Homeground have agreed to vary the terms of our lease, leaving it linked to RPI instead of doubling. However, RPI is not a silver bullet- the Office for National Statistics who publish this measure DO NOT RECOMMEND its use and call it seriously flawed.

Leaseholders do not have a lot of options- we either take these deeds of variation and hope we can sell in future (sales of leases with doubling ground rent have fallen through in our building), or we shell out huge sums of money to extend our lease, money which new home buyers do not have after pouring in their last pennies into buying these properties in the first place.

We need a select committee enquiry into all of the major homebuilders, their ‘approved’ solicitors and the anonymous offshore freeholders and their agents to get justice for leaseholders in England.

Countryside don’t get enough publicity around the doubling ground rents they have created.

The only developer that get mentioned are Taylor Wimpey. Persimmon also did doubling ground rents.

It’s horrific that they are allowed to get away with this.

Eric says:
14 June 2018


Could you tell us why Which? decided not to use their powers to raise a super complain on behalf of the leasehold house owners

Eric says:
14 June 2018


If that argument is true why could you not take a complaint against the solicitors as your own report shows a few firms names crops up a lot of times?

What about unfair terms could nothing be done there?

Bids24 says:
14 June 2018

I hope Which? is also going to investigate Freehold Abuse. The new norm is for developers to retain a third party interest in Freehold deeds on newbuild properties. Mine is Redrow – subject to a £5 annual fixed rentcharge that legally binds me to paying the (currently £150) estate maintenance fee. Don’t pay , and the developer can legally seize control of the freehold to recover costs. There’s also a permission fee if around £200 incl VAT for a home extension or conservatory, a notification fee for change if mortgage provider or a fee for a sales pack if I ever sell my home. Homebuyers are only told about extra fees after they reserve a property and hire a solicitor.

I’m trapped in this mess with doubling ground rent. Let me explain why it’s not as simple as not reading the small print… I knew my house had doubling ground rent and my solicitor told me it did. However the lovely Taylor Wimpey sales lady also told us that we could buy the freehold at any point in the future for c.£5k. Given moving costs we decided we would wait and buy before it doubled. Neither Taylor Wimpey not the conveyancing solicitor they recommended we use, informed us that the freehold would be sold on, nor what the implications would be for us when that happened.
Our freehold was also sold to an offshore shell company (Adriatic Land) and the cost to purchase the freehold went up to c.£30k overnight. We also have permission fees for alterations (a neighbour had to pay £108 to ask for permission and was then quoted a fee of over £2k to add a small extension that does not need planning permission).
The Taylor Wimpey offer has pros and cons. It comes with a settlement agreement meaning I have to accept the variation as full and final settlement despite the fact I’m still thousands of pounds worse off than I would have been had I been properly informed. The RPI increases also apply for the full term of my 250 year lease so although the increases in the early years are more modest the total ground rent payable is considerably more over the term (doubling stops after 50 years). Total ground rent under doubling over 250 years = £2m; under RPI at 3.3% £25.7m.
Government really needs to step in to get full redress for those of us stuck in this mess and we urgently need a Select Committee Inquiry to hold those responsible for creating this Leasehold
Scandal to account.

Bids24 says:
14 June 2018

I agree! When I was looking at newbuilds in 2015, I always asked whether the properties were freehold. I lost count of the number of times an agent told me they were leasehold but I could buy the freehold after two years.
I had read a couple of leasehold horror stories online and knew to ask if the freehold might be sold in to investors before the two years were up. Never got a straight answer and, when refused the freehold at point if sale, walked away.
Now owner of a “Freehold” house with a £5 fixed rentcharge , variable estate maintenance fee and permission fees in the region of £200 each. Drat!

Paul Banes says:
14 June 2018

Apartment bought 2010, no mention of ‘doubling ground rent’ from Taylor Wimpey sales staff or their customer service dept, Their recommended solicitor did not mention it either. 2016 ground rent doubled from £150 to £300 on a 125 year lease (stopped at 50 years). Now Taylor Wimpey will change it to RPI as long as the term of the lease and added a settlement agreement that I won’t sue them on that issue at a later stage. Since when has that been fair to a small apartment purchase of a couple are at retirement age!

[Sorry, your comment has been edited to align with our community guidelines https://conversation.which.co.uk/commenting-guidelines/. Thanks, Alex.]

Dear Which
I mailed you after you sent a link requesting peoples experience with an onerous lease, I wrote explaining the issues I had and the impact itshad on me. I am trapped in an apartment ism unable to sell due to the feudal leasehold tenure.
You have not replied to me even after I sent a reminder, I just received a standard “thank you for contacting lease”

Hi Sally, I’m sorry to hear this. We endeavoured to get back to as many people as we could, but given the sheer volume of contributions to our research, we could not reply to everyone individually. Thank you for sharing this story and we are continuing to investigate this issue and may be back in touch again in the future.

The whole thing is ridiculous. We were never told the full extent to what owning a leasehold home meant and have only recent discovered that it includes restrictions to what we can do in side our home. We bought the house both being first time buyers and quickly we have learnt of the massive mistake we made. We are now in need of bigger house after welcoming another child and know that unless we can attempt to buy our lease we are stuck in a house that is no longer fit for purpose. Taylor Wimpey are a disgrace where we live they have continued to build and have offered these home as ‘freehold’ at a higher price than those who have been trapped by the lease. At no point in my first two years in my house did I get offered a chance to buy my lease. First time buyers dream turned in to a nightmare.

Davalia610 says:
14 June 2018

Thank you for your article, which I read with mixed emotions – relief that you have finally taken a stance yet frustration that it has taken so long.

Which?, if you truly want “to see firm action from the government to protect home owners and ensure that no-one loses out as a result of these unfair practices in the future” then please, please launch a super complain! It is in your power to do so. Plus as you say
“it’s not acceptable that some families are being ordered to pay extortionate fees under threat of losing their homes”. You can help change this!

I myself have been a Which? member but cancelled my membership to help save to buy my freehold (yes, every penny counts! I’ve been quoted £32,000 + fees). My family and I bought a Taylor Wimpey property in 2011, we knew it was leasehold and that the ground rent doubled every 10 years; our conveyancer advised the ground rent terms were onerous so advised us to buy the freehold before it doubled. Taylor Wimpey said we could buy the freehold at any time for £4420 – there was no mention of them selling it on, especially to an investment company. We were horrified when we read a letter from them advising that they had sold our freehold interest on because it’s not their business plan to retain it! Surely if this is the case why didn’t they tell us?! All I want is to buy my freehold for the price I was told I could! If Taylor Wimpey had told me my freehold was going to be sold to an investment company and that it would cost £40000 to buy I wouldn’t have bought the house!

Hi, I’m so sorry to read about your situation – it’s one that’s extremely familiar and I know how awful this situation is for people involved.

With regards to Which?’s super-complaint powers, to make one we’d have to do so to a regulator, but there is not a specific one for property developers, so it isn’t something we’re able to do on this issue. As Stephen mentioned earlier:

“A super-complaint is used to ask a regulator to investigate particular features of a market.

In December 2017, the government gave a commitment to do away with the unfair clauses and practices for new leasehold properties. This means that the purpose of any super-complaint had already been achieved.

Unfortunately, the issue of redress for existing leaseholders can’t be the subject of a super-complaint – that would be a matter for individual claims”

Surely the government could take action under some other guise – unfair contract terms perhaps? Have Which? discussed this with them?

Davalla610 – did Taylor Wimpey make the statement in writing about purchasing your leasehold “at any time for £4420”? If so surely you have a claim to see that is honoured. If not, perhaps the same commitment was made to others on your estate and you could get together to have the offer enforced? It may mean Taylor Wimpey paying the investment company on your behalf.

Chris Pearce says:
14 June 2018

Why have leasehold on a house which is the only property on the land? The whole thing is scandalous. I asked to buy the freehold in the sales office and was told I could after I moved in but Morris Homes sold it on after two months without my consent or knowledge. Instead of around 4k to pay the investor wants approx 12k and this will still include permission fees! The number of people this has happened to us huge and we have all been mis-sold. I hope the government and Which? can help us in this plight.

OS says:
14 June 2018

Thank you for finally raising this issue buts it’s very disappointing it’s taken this long for you to speak out. Taylor Wimpeys offer for a deed of variation needs to be exposed for what it really is, a pr exercise which is actually just a means of getting their customers to waive their legal rights to future claims. I’m a 999 ten year doubler who has just doubled to £590 per year. TW specifically made it part of the deal that we had to use their recommended solicitors and as such we feel we weren’t adequately warned of the potential future impact.

Deborah says:
14 June 2018

We knew ours was a Leasehold but were advised that that’s the way houses are sold these days and everyone else is buying them – which in 2016, they were. It doesn’t help that estate agents don’t include info about properties being leasehold. By the time this information comes to light you have sold your own property and engaged a solicitor – you’ve spent a lot of money and close to exchanging when the detailed info comes to light.

We were also under the impression that we could buy the lease after we’d lived in the house 2 years and had first refusal if the developer wanted to sell the freehold on. It was only after purchasing and moving in that we discovered the freehold had been sold to Adriatic 5 and that the above rules only apply to buying the freehold of flats and not houses.

You read the lease and it talks of permissions but that’s sounds like asking permission to build an extension, not that you have to pay £100’s just to ask the
question and possibly thousands more to the freeholder if they agree to it.

RPI is sold as the panacea to doubling ground rents but in many cases this could be higher than doubling. RPI is outdated and rarely used As it’s always above inflation.

Developers are getting away with this because there is a housing crisis – too many people chasing too few houses enables them to do what they like and buyers are held to ransom. The Gov are talking about taking action but they haven’t yet stopped the sale of newbuilds being Leasehold which they could easily do. Those of us caught in it have no prospect of selling, surely making the housing crisis worse.

Thank you to ?WHICH for highlighting the leasehold scandal that has been going on for many years. The National Leasehold Campaign welcomes this exposure but would be even more delighted if
?WHICH would consider a super complaint against the developers that abused leasehold law to scam thousands of unsuspecting people. The campaign is strong and ongoing but we need an organisation like this to really take up the baton and fight for the consumer.
So come on ?WHICH the NLC members living in leasehold flats and houses have given you the ammunition- please fire the cannon!!!

Hi Cath. We’re glad you found the investigation helpful. To make a super-complaint we’d have to do so to a regulator, but there is not a specific one for property developers, so it isn’t something we’re able to do here. Here’s Stephen’s response to an earlier comment:

“A super-complaint is used to ask a regulator to investigate particular features of a market.

In December 2017, the government gave a commitment to do away with the unfair clauses and practices for new leasehold properties. This means that the purpose of any super-complaint had already been achieved.

Unfortunately, the issue of redress for existing leaseholders can’t be the subject of a super-complaint – that would be a matter for individual claims”

As far as I know from Wikipedia Which? [ or more properly Consumers’ Association] has other legal powers, are they all useless?

I think a calling for an investigation into whether there is cartel-like arrangement between the major builders might be worthwhile as the arrangement where major developments are farmed out between several would seem to suggest a collusion occurs.

The fact that all of them moved to a similar disadvantaging of new buyers rather than highlighting the benefits of freehold would also indicate a possible collusion.

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https://www.out-law.com/topics/property/investment-/conversion-of-long-leases-to-outright-ownership-in-scotland/ explains how leases were compulsorily converted to freehold by act of parliament in 2015. However there seem to be two important conditions:
1. The original lease was for at least 175 years
2. The annual rent did not exceed £100
I doubt that would cover many UK new builds, would it?

It seems to me that if you buy a leasehold property and know, and accepted, you have a doubling ground rent clause then you need to live with that decision. If you were not made aware of it and its consequences then your solicitor should be held liable.

Selling on a leasehold after a promise of a right to buy at an agreed price, however, seems to be dishonest. If your contract included this choice, even verbally, then you should have been consulted and offered the purchase before it was then sold to a third party, shouldn’t you?. Time this was tested? But legally is this the case? Perhaps this is where Which? and others should publicly become involved and condemn by name those companies who indulge in this practise in the hope that it may bring about a change in behaviour (some hope 🙁 ).