Leasehold trap – major builders could face court action over rip-off leases on newbuild properties
Leasehold trap – major builders could face court action over unfair leases on newbuilds
The UK’s largest housebuilders are being investigated by a watchdog after evidence has emerged over the way leaseholds on newbuild housing estates have been sold to property buyers.
Major companies like Barratt Developments, Countryside Properties, Persimmon Homes and Taylor Wimpey are facing legal action from the Competition and Markets Authority (CMA), which could take the developers to court.
Buyers have been caught in a leasehold trap, with rising ground rents, unfair fees and properties which could become difficult to sell.
The CMA has demanded information from the developers and could go to court.
Many people do not realise that when they buy a leasehold flat or house, they own a lease which gives them the right to use the property for the length of that lease. However, leaseholders are also restricted on what they can do with the property and often have to obtain their freeholder or landlord’s permission for any work or changes to their homes.
Typically, on a leasehold flat or house, a new lease is granted for a fixed period of between 99 and 125 years – in some cases 999 years. Whilst it’s true that people may extend their lease or buy the freehold, this can be expensive and many people find themselves at the mercy of a greedy landlord.
Houses are also sold on a leasehold basis where house owners are charged expensive ground rent and service charges, in addition to rip-off fees just to make alterations or improvements to their homes. Most flats are sold as leasehold and most houses as freehold. A leasehold house is notoriously difficult to sell and should be avoided.
The CMA watchdog said leasehold buyers were being hit with ground rents that doubled every decade, and said that others were wrongly advised that they could not buy the freehold on a site.
Katie Kendrick, a leasehold victim, set up the National Leasehold Campaign six years ago and now has 18,000 members.
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Are you ready to adapt to the new economic model?
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By Charles Kelly, Wealth Mentor, Property Investor, Author of Yes, Money Can Buy You Happiness and creator of Money Tips Podcast.
There are more examples and practical steps to getting rich and being happy in my book, Yes, money can buy happiness, I cover the 3 R’s of Money Management, the Money B.E.L.I.E.F System and much more. Check it out on Amazon http://bit.ly/2MoneyBook.
If you’d like further information on wealth mentoring and coaching, how to survive the crisis and even quit the rat race, email me at Charles@CharlesKelly.net or send me a message through Facebook or my Money Tips Daily community. See more articles at www.moneytipsdaily.com