'You feel completely powerless' - Runcorn homeowners face huge ground rent increase

Granada Reports reporter Siham Ali spoke to homeowners who have seen their year ground rent increase by as much as 51% in 2024.

A group of homeowners have been left feeling "powerless" after they were hit with a large increase to their ground rent with just a few weeks warning.

The homeowners on an estate in Runcorn have seen their yearly bill rise by as much as 51%, with many saying they have "fallen through the cracks" of Government legislation aimed at tackling ground rent.

The residents bought their homes in the first two phases of Morris Homes' Sandymoor development, and are classed as leaseholders. This means that even though they own their home, they do not own the land they live on and must pay rent to a property firm.

The Government has banned ground rents on homes built after 2021, but the legislation does not cover existing leaseholders.

Residents on the estate say it wasn't made clear that they would be required to pay ground rent annually.

Dawn Melia has been forced to pay £350 a year since she bought her home in 2018, but claims the terms of the leasehold were not made clear.

Dawn said: "It was only when we exchanged contracts that we were told it was leasehold. We were then told it was too late for us to buy the leasehold and we'd just have to put up with it.

"So we've kind of been saddled now with the leasehold fee every year since then."

Rather than paying monthly Dawn must send the full years rent once every 12 months, typically around December or January.

Dawn said: "We'd go on holiday with that money, I would do something nice with it. But actually in January, you're just paying off Christmas and paying off your yearly ground rent."

Dawn was hit with an increase of almost £200, and only given a few weeks to find the money.

After paying the ground rent for the past six years, Dawn and other residents on the estate saw a large increase in 2024 without warning.

She said: "[This year's] bill said that the increase was going from £350 to £530, and it was due in the middle of February."

It's a similar story for Andrew Dyer, who also lives on the estate. Since he bought his house in 2016, he's been paying £300 a year in ground rent. In 2024, it went up to £450.

He said: "When we bought, we said 'could we buy the freehold?' and we were told the freehold wouldn't be able to be sold for two to three years.

"But within three months of buying the house it was sold on to an investment company, so you feel completely powerless."

Andrew saw his ground rent increase by 50% in 2024.

Andrew's land is currently owned by INNOVUS, who said "they are sorry to hear that some residents have been upset by the recent ground rent increases."

Meanwhile, Dawn's land is owned by The Compton Group who said that "leaseholders should have been advised of the terms of the lease (including the ground rent provisions) by the solicitors or conveyancers acting on their behalf at the time they bought the property.”

Ground owners like The Compton Group are allowed to increase rent every 10 years, in line with the Retail Prices Index, which tracks inflation.

For both Andrew and Dawn, they struggle to see why they should be paying in the first place.

Dawn added: "If that money was going towards the housing estate or making things better, you'd kind of think well it's a lot of money but it's being put to good use, whereas effectively we're just handing over £530.

"We don't know where it's gone, what it's being used for. It's certainly not benefitting the local area."

Leaseholders feel the money could be put to better use improving the local community.

Andrew added: "You've got no idea who this faceless company is that owns your freehold, and who just sends you a bill each year and provides you with absolutely no benefits or services for that."

The Labour MP for Weaver Vale, Mike Amesbury, has been calling for the removal of leasehold agreements.

He said: "My constituents are being charged ground rent, which is money for nothing. It's their houses on the land."

The Leaseholder and Freeholder reform bill is currently going through parliament, and will change the law to help homeowners paying ground rents. The bill will make it easier and cheaper for leaseholders to buy the land, while also forcing companies to be more transparent when it comes to yearly costs.

However, until this bill is passed residents in Runcorn will continue to pay the increased rent fees each year.

A bill is currently making its way through Parliament that will help leaseholders, but it's already too late for residents in Runcorn.

In response to the claims made by residents, The Compton Group said: "We have increased the ground rent strictly in accordance with the terms of the lease.

"In fact, we are not permitted to increase the ground rent except in accordance with the terms of the lease."

INNOVUS added: "We are sorry to hear that some residents have been upset by the recent ground rent increases.

"The ground rent provisions, including the frequency and basis for increases, are set out in the house owners’ leases.

"Under the leases, which were granted by Morris Homes, the ground rent is to be reviewed every 10 years and is to be increased in line with the Retail Prices Index.

"While leaseholders will have been made aware of these reviews at the time of purchasing their property, we appreciate that no increase is ever welcome and we can offer residents support where possible."

A spokesperson from the Department of Levelling Up said: “We are committed to strengthening protection for leaseholders and are bringing forward reforms through the Leasehold and Freehold Reform Bill.

“It is not fair that many leaseholders face unregulated ground rents for no guaranteed service in return – that is why we consulted on a range of options to cap ground rents for existing leases, and we have already legislated to put an end to ground rents for most new residential properties in England and Wales.

“We are pleased to note that the Competition and Markets Authority recently found that ground rents are ‘neither legally nor commercially necessary’.

“The government is currently considering the responses to the consultation and will set out its policy in due course.”

Want a quick and expert briefing on the biggest news stories? Listen to our latest podcasts to find out What You Need To know...