An estimated 100,000 homebuyers’ properties in the UK are sold as Leasehold rather than Freehold. Meaning buyers are trapped in contracts, paying thousands a year in ground rent and additional costs, and there’s no easy way out.
According to a recent survey conducted by Conveyancing Association and Homeowners Alliance, 98% of the 1,170 people asked said they weren’t told what they were getting into before viewing their properties.
Meaning just 2% of buyers said they had received enough information to make an informed decision.
Now developers could be facing criminal charges for failing to disclose Leasehold terms, breaking the Consumer Protection Rules.
Home-buyers are left with rapidly escalating ground rent and extra charges which can rise as much as 700%, according to White Paper. Making it hard for them to sell their properties on.
‘Leasehold has been a traditional part of the housing market in this country but there are areas where urgent reform may be need,’ the The White Paper stated.
With this becoming such a problem for homeowners, the Government have proposed a total ban on new build leasehold houses, as well as cutting ground rents to zero.
What charges are associated with Leasehold?
Ground Rent is the main charge, Direct Line estimates to be around £371 which doubles every 10 years. Homebuyers have even reported being charged £100 to have a letter answered by the Freeholder.
Can Leaseholders buy their Freehold?
In short, yes, but it won’t be cheap. At the time of building, buyers were offered the opportunity to buy their Freehold for £3,000-4,000, but most declined. Now when homeowners ask to buy their Freehold back, they are frequently asked for £40,000 or more.
Have you been affected by Leasehold fees or were you even told about them when buying your property?
Let us know!