With unclear leases and private companies purchasing freehold unbeknown to the consumer before it’s too late – what’s the next stage in the leasehold scandal for homeowners?
Tens of thousands of new-build leasehold homeowners reportedly now regret their purchase and feel they were sold the home on false grounds.
A report from NAEA Propertymark reveals the following:
Almost half said they didn’t know they were only purchasing the lease until it was too late, while 57% didn’t know what being a leaseholder meant until after they had bought their home. Meanwhile, 15% said they weren’t told by a professional that they were only buying leasehold – they had to discover this off their own back by studying the contract themselves.
Additionally, nearly half of those surveyed were oblivious to escalating ground rents until it was too late, with many now stuck in homes they can’t shift because of the onerous terms in the lease.
Freehold and leasehold – what’s the difference?
A freehold home means you own the building and the land it sits on outright. This means you don’t have to pay any service charges or ground rent, or ask for permission to make alterations to your home. Leasehold means you only own the lease from a landlord (free holder) for a set period of time which can vary from 50 to 999 years.
It is common that houses are freehold while flats and apartments are leasehold, however, in recent times, new build homes have been sold as leasehold. – resulting in the leasehold scandal
An ongoing issue
The leasehold scandal originally hit the headlines in 2017 when it emerged that developers had been selling leasehold homes with spiralling ground rents and significant fees attached, which left many homeowners stuck in homes they couldn’t sell and couldn’t afford to live in.
With approximately 1.4 million leasehold homes in the UK, the ground rent/leasehold scandal propelled the government into action to reform leasehold. The government plans to tackle ‘unfair and abusive’ practices within the leasehold system, the plan includes a ban on nearly all new-build leasehold homes, ground rent on new long lease property being set at zero and proposals to make it simpler and cheaper for existing leaseholders to purchase the freehold on their home at reasonable rates.
What can be done now?
For those already entangled in a difficult lease, it’s important to understand what legal options you have. We can help.
Our claims process
You can only make a claim if you purchased your house within the last six years or if you’ve become aware of an issue within the last three. If you are unsure of whether you are eligible, the LeaseClaims team are happy to help.
Reviewing Your Legal Files:
You authorise us to obtain legal files from the solicitors who facilitated your property purchase. We then review these files to determine the legal issues involved with your leasehold scandal.
No Win / No Fee Contract:
If we are able to proceed with your case, we will inform you and provide you with a “No Win / No Fee” contract. We will then re-examine your files to assess the previous legal advice you received in relation to your ground rent clause and draft your claim correspondingly.