A HOMEOWNER says he is facing a “nightmare” after discovering that extending the lease on his flat will cost thousands.

Welder Steven Wrathmall, from Sherburn, near Durham was shocked when he made enquiries about extending the lease on his two-bedroom flat and was told it would cost £15,670 and he would have the pay the owner’s legal fees of £1,500.

And if he does extend the lease, CSJ, the company which manages it, wants to increase the ground rent he pays from £20 a year to £200 – an increase of 900 per cent.

He said: “If it was reasonable people would renew the leases but it’s stupid. It’s greed, it’s as simple as that. It’s all money, money, money.”

The 61-year-old, who bought his flat for £75,000 in 2011, is one of 100,000 people in the UK thought to be affected by increasing ground rents on leasehold properties.

The problem led to a national campaign to be set up and last year the government has proposed a ban on future sale of houses as leasehold and cutting ground rent to zero.

Mr Wrathmall, along with many of his neighbours, who are also affected, signed a petition against the “unfair” costs, which has been presented to parliament by Durham MP Roberta Blackman-Woods.

She said: “Up to 100,000 people across the UK are affected by this, including people in Durham, and it means that they are at the mercy of the freeholder who can continue to increase the ground rent as they see fit, and often charge the leaseholder for other services as well.

“It also means that many leaseholders are effectively trapped in these agreements, as onerous charges means that their properties are hard to sell, and many lenders won’t offer mortgages to prospective buyers for leasehold properties.

“Although the Government has proposed a ban on the future sale of houses as leasehold, and cutting ground rent to zero, action needs to be taken now to ensure that those people who do own leasehold properties are not being overcharged, and financially penalised for owning their own home.”

Mr Wrathmall added: “It’s been a sleeping time bomb. Some people have lived here since the flats were new and they were completely oblivious to the situation.

“The more I’ve gone into it, the bigger the nightmare. It’s like having a gun to your head. I would expect to pay a fee but not that much. They’re trying to squeeze every penny and the people on the receiving end are people like me.”

A spokesman for the landlord’s agent, which manages the freehold on behalf of the UK based institutional pension and life funds who own it, said: “We would have expected that the solicitor acting for Mr Wrathmall on his original purchase of the property in 2011 to have advised him that there were only 63 years remaining on the lease, and that this should have been reflected in the price he paid for the property.Mr Wrathmall has asked us to extend the 57 years left on his lease on his home by 90 years. We have offered him a price at which we are willing to do that and it includes an increase in the annual ground rent to £200. He is free to reject our offer and can achieve the extension without any ground rent by going to the First Tier Tribunal, which is the statutory route laid down in the legislation.”

“They will make a decision on the price he will have to pay, which we will abide by should he still wish to purchase it.”