Countryside Properties to buy back freeholds sold to E&J estates
UK developer Countrywide Properties has agreed to purchase a number of freeholds it sold to E&J Estates with exorbitant ground rents, liberating homeowners from a clause which would see their ground rent double every decade. While the move has been welcomed, others say it does not go far enough, as homeowners with ground rents that double every 15 years are not covered, nor are deals between Countrywide and freeholder Adriatic Land.
Hopes of a breakthrough for householders trapped in the leasehold scandal are rising after a major developer agreed to buy back some freeholds and axe ground rent clauses.

Countryside Properties, which sold some of the freeholds on its houses to the ground rent company E&J Estates, has agreed to buy a number of them back with a view to releasing homeowners from clauses where ground rents double every 10 years.

E&J Estates has also “resolved not to purchase any further leasehold houses” following recent media coverage.

Two weeks ago the Guardian revealed the scale of E&J Estates’ ground rent business, with companies controlled by one man, James Tuttiett, holding the freehold to as many as 40,000 homes around England and Wales.

A letter dated 4 August from E&J Estates tells leaseholders that it has sold the freehold to their leasehold house back to the developers. It says: “We are writing to you with regard to recent media coverage … and concerns that have been raised on leases with 10-year doubling ground rent clauses.

“We have been working with Countryside to resolve the issue. As a consequence, we have completed the sale of the freehold on your property back to Countryside.”

E&J also issued an apology to worried householders. In the letter, it said: “We are sorry for any concerns that your leasehold may have caused you and the time it has taken for us to put in place the mechanism for resolution.”

One householder on an estate built by Countryside shared the letter with others on the National Leasehold Campaign Facebook page. “Brilliant news for our estate today … long way to go but a step in the right direction.”

Another said: “Developers are in a state of complete confusion and disorder.”

Countryside said in a statement: “We have conducted a comprehensive review of properties we have sold on a leasehold basis and have concluded that the vast majority of these homes carry little or no financial risk to the occupier. However, for a small number of leases, we recognise that the 10-year doubling of ground rents increases too quickly and have taken action to address this issue.”

However, campaigners said the deal did not go far enough. Sebastian O’Kelly, of Leasehold Knowledge Partnership, said: “It seems the deal only applies to four to five sites where E&J Capital Partners are the freeholders and where ground rents double every 10 years only.

“Those Countryside Properties sites where ground rents double every 15 years appear to be excluded from the deal. Also, the deals have not been done where the freeholder is Adriatic Land.”

The deal from Countryside will increase pressure on other developers to offer compensation to householders. Many complain that their properties have become virtually unsaleable because of onerous clauses in their ground rents.

The government is in the early stages of a consultation on the future of leasehold, with plans to ban the sale of leasehold houses and reduce ground rents on new flats close to zero.

Meanwhile, horror stories of homebuyers with extraordinary ground rent clauses continue to emerge, with many of the worst cases being secondhand apartments rather than new-build leasehold houses.

One buyer of a ground-floor conversion flat in east London, who wishes to remain anonymous, contacted the Guardian after discovering that his ground rent will rocket.

He bought the leasehold flat just two years ago, with a ground rent set in 2004 at £250 a year. “Due to the doubling, the final 10 years of the lease will incur £128,000 per year.” He requested to buy out the freehold but has been given a quote of more than £100,000.



“Annoyingly, we have only discovered the true extent of this problem because we are selling our flat. We were at no point told by our original solicitor that this clause existed or would be a problem. Neither did they inform our lender (who almost certainly would have refused our mortgage application had they known).

“We have accepted a good offer, but I suspect it’s all about to fall through. Once the purchaser’s solicitor noticed the clause, they asked us to inquire with the freeholder as to whether we could remove the clause via a deed of variation. The freeholder quoted a premium of £100,000 to do so. We’ve just passed this information onto the purchaser. I expect they will run a mile.”



