Sarah Sargent, a Partner at Lupton Fawcett, said: “This is a very real problem facing many owners of new build properties offered and sold as leaseholds rather than freeholds – a distinction that often isn’t explained by the seller and can end up leaving buyers facing soaring costs the longer they own the home.”
She went on to highlight two key issues.
“Despite what a lot of the housebuilders say, this is a countrywide problem at a time when more new homes are being built than ever before,” continued Sarah.
Lupton Fawcett has also drawn attention to the fact that two mainstream lenders have now stated they will not lend against homes with onerous leasehold provisions. A position that will impact not only on sales, but could leave owners chained to their homes and stuck with costs that will simply go on rising.
In one recent case, Lupton Fawcett saw a sale fall through because the onerous leasehold provision meant ground rents would double at every review. The result of this was that the homeowner was left with a home they could neither sell nor re-mortgage on the existing leasehold basis
“Banning the sale of new leasehold properties is a major step in the right direction, not just from a homeowner’s perspective, but from that of the housing markets,” concluded Sarah. “It seems obvious, but the more onerous leasehold provisions there are, the fewer homes will sell.”
“It should be noted that not all leasehold properties are a problem area. Flats can only be sold as leasehold and many leasehold houses have been created with perfectly acceptable leases. The key is to seek advice from firms such as Lupton Fawcett who have expertise in this area.”
Lupton Fawcett advises those concerned about leasehold issues, whether related to their own current homes or properties they are thinking of buying, to clarify their situation by contacting its specialist property team.
For further information please contact Sarah Sargent or a member of the Residential Property Team.