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A major housing company has been effectively banned from building homes in Liverpool and told by Mayor Joe Anderson 'we won't do business with you' as part of the ongoing leasehold scandal.

The city leader and his authority have made it clear to Countryside Housing that they are not welcome in Liverpool - and the authority will no longer assist the FTSE 250 company with its projects in the city - or sell it any of its council-owned land.

People living in a number of housing estates in the city have been written to by the Mayor - which promises to block Countryside from building homes 'because of this leasehold scandal.'

But Countryside bosses have responded have reacted with surprise at the move - arguing that the company have already dealt with the issue being raised by the Mayor.

The ECHO has been reporting on the leasehold scandal for some time now.

We've revealed how scores of Merseyside families have had their homes sold from under them - and now face soaring bills.

(Image: PA)

Over the past decade, more and more developers have been developing new-build leasehold houses.

It has enabled builders to sell on the freehold of the homes to investors keen to make the most of rising ground rents.

Across Merseyside, people who have bought affordable homes under leasehold deals say they are now discovering their homes have been bought by investors.

That means the cost of buying the freehold of their homes could rise dramatically.

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And they could also face higher costs for making any changes to their homes – even it’s just putting in a new carpet or a curtain rail.

Countryside Property says it does not sell leasehold houses at present - and where it has done historically, it has offered homeowners the chance to buy the freehold at cost.

But speaking to the ECHO today - Mayor Anderson said the situation is 'completely outrageous.'

He said: "We will not be making any deals or working with any developers that put people at risk.

"I am appalled that we have entered into agreements in good faith only to see companies turn against people and use this situation to their advantage.

"This scandal means that people can't sell their properties and are ending up in debt - it is completely outrageous.

"I also want the government to pull its finger out and do something about this - because this is a scandal that they are fully aware of, they are allowing it to happen."

(Image: James Maloney)

Mayor Anderson is the housing chair for the Core Cities group of major city authorities - and says he wants others to follow Liverpool's lead.

He added: "These companies won't be working with Liverpool Council - and other councils should do the same to protect residents."

A spokesman for Liverpool council backed up the Mayor's words, adding: "We do not allow leasehold houses on any schemes where we are a development partner. In addition, in the case of Countryside Properties, following issues raised by residents about leaseholds on some of their housing developments, we are no longer providing assistance to them with site assembly and selling them council-owned land."

The Telegraph reported the news today , and quoted Sebastian O'Kelly of the Leasehold Knowledge Partnership, who claimed that Countryside and other developers had "played all the angles of leasehold".

He added: "The leasehold scandal has shown how rotten our house builders are.

"Even when handed a generous subsidy by all of us they cannot resist ripping off their customers with leasehold games. We wholeheartedly applaud the Liverpool mayor sending them packing from his city."

The Government has promised to ban the sale of houses with leases as part of wider reform to England's property ownership system which sees leaseholders with far less power than freeholders.

The row between Liverpool Council and Countryside reportedly began because residents believed they had deals in place to buy the freehold of their properties at a stated price - only to later find out that the houses had been sold on the freehold to investors who wanted three times that figure for a buy-out deal.

A Countryside spokesman said the firm was "surprised" at the Mayor's actions.

"Wherever possible, we sell properties on a freehold basis. Where we have to offer leasehold properties, we make sure that they are affordable on both an initial and ongoing basis.

(Image: Getty)

"Where we have historically sold houses on a leasehold basis – something we no longer do – and own the freehold, we have already written to all residents and offered them the opportunity to buy back their freehold, at cost.

"So we were surprised to read in a letter sent to local residents by the Mayor of Liverpool that he will make this demand of Countryside when it is something we have already done, where we are able to do so.

"We are seeking to make contact with the Mayor’s office to discuss these matters further."

A Countryside spokesperson said: “Wherever possible, we sell properties on a freehold basis.

"Where we have to offer leasehold properties, we make sure that they are affordable on both an initial and ongoing basis.

"Where we have historically sold houses on a leasehold basis - something we no longer do - and own the freehold, we have already written to all residents and offered them the opportunity to buy back their freehold, at cost.

"So we were surprised to read in a letter sent to local residents by the Mayor of Liverpool that he will make this demand of Countryside when it is something we have already done, where we are able to do so.

"We are seeking to make contact with the Mayor’s office to discuss these matters further.”