Four million leaseholders in England 'at risk from rip-off fees'

Four million homeowners in England do not own the freehold to their properties, new government estimates have revealed.

Labour says these leaseholders are currently "unprotected" from "rip-off rises in 'ground rents' from developers or management companies".

Housing spokesman John Healey said his party would end this "sharp practice".

The government has also promised action, saying it will end leaseholds for new housing developments.

• The new property trap affecting thousands

It is also consulting on plans to set a minimum lease length for new flats - and new laws to help leaseholders fight back at tribunals against unreasonable ground rent reviews.

Leaseholders own their homes for a fixed period of time, on a "lease" to a freeholder.

They typically pay ground rent to the freeholder - but can be caught out by clauses allowing for dramatic increases in these fees, which come on top of management charges for the upkeep of communal areas.

About 21% of private housing in England is owned by leaseholders, with 30% of the properties houses rather than flats, according to the Department for Communities and Local Government figures.

Mr Healey said: "These new figures confirm for the first time the scale of leasehold ownership in England.

"At its worst this is little better than legalised extortion and too many leaseholders are having to pay hefty bills as a result."

A DCLG spokesman said it was "unacceptable" that homebuyers were "being exploited with unfair charges and unfavourable ground rent agreements".

"Our recent White Paper made clear that we will take action to tackle all unfair and unreasonable abuses of leasehold," the spokesman added.

"This includes a consultation on ending leaseholds for new houses and we will announce more details shortly."

Labour attempted to deal with the issue when it was in government through legislation in 2002, with limited results.

Mr Healey added: "This is unfinished business for Labour - we gave leaseholders more protection in government, but the continuing problem now means we must do more.

"A Labour government would give leaseholders security from 'rip-off ground rents' and end the routine use of leasehold ownership in new housing developments."