The Leasehold Trap
All of us aspire to own our own homes and for many young people it is the biggest obstacle they face. We all agree that we need more affordable homes but currently proposed brownfield developments will not meet the projected target of 75,000 new homes we need in Wales over the next 20 years.
Currently, there are around 200,000 leasehold homes in Wales, with more being built each year. A leasehold is when developers sell a home but retain ownership of the land the home is built on (the freehold rights). Developers then charge an initially small annual ground rent (in addition to factoring fees for flats). Increasingly, developers will sell the freehold to a ground rent investment firm who hike the rates into the thousands, often doubling every 10 years, which is an increase three times the current rate of inflation. These firms also hike prices of the homeowner freehold buy option and charge thousands for permitting extensions, extorting homeowners every way possible. This can be crippling for young families, often on the first step of the property ladder, who can ill afford to fund the profiteering of investment firms.
Wrexham’s Local Development Plan is at the end of the consultation period and land may soon be allocated for large-scale housing developments. Earlier this year, the Welsh Assembly took a non-binding vote to ban leaseholds in Wales (they are already banned in Scotland and the UK Government have announced plans to ban in England). A non-binding vote means nothing, we need action. Come on Welsh Labour Government in Cardiff, give our young people a break - ban the Machiavellian practice of Leaseholds.
Sarah Atherton