Leasehold homeowners trapped in unsellable properties

Residents of an affordable leasehold housing scheme in Hayle are trapped in unsellable and un-mortgageable properties because of increasing ground rents, paid to the owner of the freehold based in the offshore tax haven of the British Virgin Islands.

The directors of Cornwall-based Poltair Homes established a subsidiary company, THF Limited, in 2004 to develop the 47 homes at Pentowan Gardens in Hayle. By 2007 the development had been completed, and the first residents moved in.

According to the s106 agreement signed by Poltair Homes, THF and the now defunct Penwith District Council, homes in Pentowan Gardens are supposed to remain affordable in perpetuity through being sold for a percentage of their market value, in the region of 60-70%. Potential purchasers also need to show they qualify for one of the properties by demonstrating a housing need and links to the local area.

To offset the reduced purchase price, ground rents were originally paid to the developer at the cost of £ 20 per week. However, these rents have now swelled to over £ 1600 per annum and increase by the RPI every year.

In 2010 the directors of Poltair Homes sold THF Limited to a property investment firm which subsequently moved the freehold of Pentowan Gardens to the British Virgin Islands. The current landlord and freeholder, to whom the swelling ground rents are paid, is Rockwell (FC100) Limited, incorporated in the British Virgin Islands. This offshore entity is ultimately owned by the Tchenguiz Family Trust, whose vast property interests in the UK are administered by the Consensus Business Group.

Pentowan Gardens

Since the financial crash and recent negative publicity over leasehold properties, lenders have been reluctant to offer mortgages on leasehold schemes. For Pentowan Gardens residents, these issues are compounded because of the private landlord being based offshore, along with their hefty ground rents. This has rendered homeowners in the development unable to sell or re-mortgage their properties. Solicitors acting for potential purchasers are advising them not to attempt to buy Pentowan Gardens properties because of the toxic terms of the lease. As it currently stands, these “affordable” homes can only be purchased in the unlikely circumstance that the buyer can demonstrate their local connection and housing need, but also have the cash to buy the property outright.

One current resident of Pentowan Gardens is Laura Bullen, who along with her husband, purchased their property in 2007. “We have a two bedroom house in Pentowan Gardens. This was meant to be a starter home for us, ”Bullen explained. “We now have 2 children, a girl and a boy who will need their own bedrooms very soon, but we are unable to sell.”

At a public meeting of Pentowan Gardens homeowners in February 2022, also attended by the leader of Cornwall Council and the Mayor of Hayle, residents resolved to lobby their offshore landlord to help resolve their issues. So far, no response has been received despite much pleading from Pentowan Gardens homeowners.

The local MP, George Eustice, is also aware of the problems being experienced by Pentowan Gardens residents and has written to Housing Secretary Michael Gove, asking him to investigate the issue. No response has yet been received from Mr. Gove and any interventions from the government on the issue are likely to take some time.

Residents have learned that initial attempts by Cornwall Council to purchase the freehold of the estate and bring ownership back onshore have been met with a price far above the market value from the current owners.

Pentowan Gardens homeowners are hopeful however, that Cornwall Council will accelerate their attempts to resolve these issues soon, given their statutory duty to resolve such matters. This could include enforcing a compulsory purchase order or compelling the original developer, Poltair Homes, to work with the current offshore owners to fix the problems of their creation.

Pentowan Gardens residents are not alone in their struggles. Nearby Ellis Meadow in Connor Downs and Beacon View in Mount Hawke are two other estates suffering from the same issues. These estates were built by the same developer with similar terms, and now find their freeholds owned by the same offshore firm.

In the meantime, residents remain trapped by circumstances not of their own making and are looking to those with the power and means to resolve their issues and take the necessary actions.


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