Buyers of new homes warned of the danger of ‘unjust’ leaseholds
PUBLISHED: 09:55 25 July 2017 | UPDATED: 10:57 25 July 2017
Government calls for ban on leaseholds on new homes
People buying new homes were today warned to check the small print and avoid “unjust” charges following a call by the government to ban leaseholds on new builds.
Under the measure, subject to an eight week consultation period starting this week, leaseholds on new-builds would be outlawed and ground rents could be reduced.
Marc Langdon, head of Bidwells’ new homes in East Anglia, said the practice had never really caught on locally. “Buyers are really savvy and most when buying a new home, want the land underneath it. It therefore doubled the time it took for developers to sell new homes so it just didn’t take off around here.”
However, he advised buyers to always check the small print and use a reputable solicitor to aid them when buying a leasehold property.
“Find out exactly what the cost of annual charges are, whether they will increase over time and think about whether you will be able to sell your home in the future,” he said.
Properties usually sold as leasehold are flats and apartments - situated in one large block. The owner of the entire building then charges each individual for the costs of maintaining outside and communal spaces and it’s standard practice.
But some developers nationwide have been selling new homes leasehold rather than freehold and doubling annual charges.
“Enough is enough. These practices are unjust, unnecessary and need to stop,” said communities secretary Sajid Javid.
The government cited examples where one homeowner was charged £1,500 by the freeholding company to make a small change to their family home; another case study was a family home now impossible to sell because the ground rent is expected to hit £10,000 a year by 2060 and an owner who was told buying the lease would cost £2,000 but the bill came to £40,000.
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