Facing spiralling costs over leasehold practice
A comment from a regular contributor on the freehold on leasehold new-builds being sold on, which featured in last week’s magazine, sparked debate among readers…
I really hope leasehold becomes a thing of the past.
We bought our first home in September 2016 using Help to Buy. The developer told us it was leasehold after we decided to reserve. There was nothing in the brochure or website about leasehold.
Thinking it was odd that a three-bed house would be leasehold (I had never heard of that before on houses – only flats) we asked why. We were told by the developer that the freehold was not available because the local college next door owned, and didn’t want to sell, the land but had let the developer build there. They said it didn’t matter as the lease is 499 years and therefore would not end in our lifetime.
In January 2017 we found out a housebuilding firm owned the land and had lied to us. Not just us but almost everyone on the site that has already completed. We are totally gutted. We had no idea ground rent would increase. If we knew this we would not have bought the house.
The parent company has gone silent and refuses to respond to questions about why we were lied to. We now have a house we don’t own.
We have spiralling costs and we probably can’t sell. We can’t park outside our home because of unfair terms in the lease (space reserved for visitors, not residents) and we cannot make any changes or improvements to the property. We have less freedom than if we were renting. And we are stuck here.
So disappointed that companies are allowed to deceive buyers and rip them off. Not just once but forever.
Exploiting loophole in outdated legislation
Developers have been allowed to exploit a loophole in outdated legislation. It’s a disgrace. Thousands caught up in this.
National Leasehold Campaign group is fighting back. Thousands of homes missold to us.
Truth discovered on day contracts exchanged
A very well-written, piece, Harpal.
In my case, I was informed by the solicitor (supposedly independent but paid for by the developer???) on the day that I exchanged contracts.
This was in the same sentence as no satellite dish, no fencing, no pets, ground rent doubles… no further explanation, no warning as to how this would affect the future saleability of my property.
Nothing at all in the brochure or documents from the developer.
I would be interested in comments from solicitors and conveyancers as to whether they feel that this constitutes clear explanation and independent legal advice.
Solicitors need to explain risk dangers
I would recommend that conveyance solicitors look at whether it was reasonable for the property to be leasehold (particularly on new-builds) as well as ensuring potential purchasers on the terms of the lease (how often does the ground rent increase and by what amount) and clearly explaining the risks of leases being sold to investment companies.
I was never made aware that this could happen and the cost to buy my freehold has gone from £5-6,000 to over £40,000. This has now hugely impacted the value of my house. Warn your clients!
Builder shafting buyers with lease clauses
There is no need for a new-build property to be leasehold, especially if the developer owns the land. This has been an extra income for developers.
The reward for somebody buying one of their homes is to get absolutely shafted by the builder when they include clauses in the leases that are extortionate for the purchaser but attractive to investors on the open market.