Few consumer scandals are as flagrant as the rip-offs involving leaseholds. With some homeowners being charged more than most people earn in a year to buy the land under their own home, this is nothing less than racketeering.
So there can be no excuse for the little-known Tory housing minister Heather Wheeler to back away from government promises to end this grotesque abuse.
The Mail has campaigned vigorously to highlight this scandal, which has seen thousands of hard-working families exploited by greedy landowners.
Unlike freeholds, where home- owners have control over their property, leaseholders are, in effect, merely tenants with a long-term rental.
The Government vowed to end what has become a very lucrative business for landowners. In 2017, the then Communities Secretary Sajid Javid promised to release leaseholders from such 'feudal practices', saying: 'It's unacceptable for home-buyers to be exploited through unnecessary leaseholds, unjustifiable charges and onerous ground rent terms.'
Some homeowners are being charged more than most people earn in a year to buy the land under their own home, this is nothing less than racketeering, says Alex Brummer
So how can Ms Wheeler now lessen the problem and play down the fact that tens of thousands of people have been wronged by ruthless house-builders such as Taylor Wimpey and Persimmon, and, in most extremes cases, have seen their homes become unsellable?
Ministers are shamefully behaving like ostriches – putting their heads in the sand – even though they are especially culpable in view of the fact that many of the properties involved were originally bought with the aid of the taxpayer-funded Help to Buy scheme.
The practice of selling homes on a leasehold basis – compounded by the rights to collect ground rents being sold to City firms – has been a key factor behind the fat-cat bonuses for housing bosses such as Persimmon's Jeff Fairburn who trousered £75million before being forced out of his job.
Regardless of Ms Wheeler's lame response yesterday, it is beyond doubt that the risks of taking on leaseholds, with the danger of ground rents rising inexorably, were never properly explained to buyers.
If they had, I'm sure most would have backed away, however desperate they were to own the property. In many cases, cut-throat house-builders cynically took advantage of the naivety of first-time buyers.
Most depressingly, the Government's refusal to take responsibility for this scandal follows a series of other mis-selling scandals.
For example, in the run-up to the financial crisis a decade ago, unscrupulous bankers mis-sold to unwitting consumers tens of billions of pounds of unnecessary mortgage and loan cover, known as Payment Protection Insurance, or PPI.
Tory housing minister, Heather Wheeler, backed away from government promises to end grotesque abuse leaseholds
The banks at first refused to recognise their liability until forced to do so after pressure from consumer groups who took them to court.
A generation previously, insurance giants were also instructed by the courts to compensate workers who were wrongly sold private pensions when they would have been better off staying in their state or corporate pension schemes.
Disingenuously, Ms Wheeler claims that the leasehold scam is different from PPI because the latter involved people being 'sold something they didn't really need.'
She is wrong. The truth is that almost every sale of a property on leasehold was unnecessary.
We have come a long way from the days when leaseholds were sold because the landowners wanted to maintain future rights if coal or other mineral deposits were later found under the land.
There is no such excuse today –house-builders, like modern-day Rachmans, have merely devised a new way of taking money from people's pockets.
It's long overdue for the Government to force house-builders and those in the City who have made hundreds of millions, if not billions, out of this scandal to repay the money.
Anything less would be a dereliction of duty and breach of public trust.
photo link
https://textbacklinkexchanges.com/alex-brummer-grotesque-abuse-shown-in-flagrant-leasehold-rip-offs-is-just-as-bad-as-the-ppi-scandal/
News Photo ALEX BRUMMER: Grotesque abuse shown in flagrant leasehold rip-offs is just as bad as the PPI scandal
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