Distinction Of Ownership Types Not Explained To 89% Of Leaseholders

89% of respondents claim they were not informed of the difference between leasehold and freehold ownership by their conveyancer, developer and estate agent when they purchased their home.

According to a survey of over 1,500 leasehold homeowners, completed by the National Leasehold Campaign (NLC), the majority felt as though all stakeholders including solicitors, estate agents and developers failed to explain a number of pertinent issues which would affect the homeowner after completion.

Nine in ten (91%) were not informed about charges or maintenance fees. This number again were unaware of escalating ground rents and the gluttony of charges imposed on leaseholders if they wished to make alterations to the property.

As punitive and pernicious charges plague the sector with past nightmares of doubling ground rents, similar exorbitant prices have been charged by freeholders when selling the freehold title to leaseholders.

To a large extent, third-party investors increased these prices after buying the freehold land from developers. However, the survey found that 84% were not told that the freehold ownership could be bought by a third-party and 80% claim they were not informed about their legal right to enfranchise and buy the freehold title.

The survey results are running alongside the NLC’s desire for all leasehold owners to be given the freehold title in a similar fashion to those involved in the Cardiff Settlement with Persimmon.

Last month, Persimmon reached an out of court settlement with their customers in a Cardiff development after it emerged the company failed to adequately inform the buyers they were purchasing a leasehold property.

Homeowners in the St Edeyrn’s Village estate in Cardiff complained to trading standards, claiming they were mis-sold their leasehold properties.

Trading Standards had started the process of legal action against Persimmon citing mis-selling. The court case, scheduled to start this month and last for seven weeks, has now been cancelled because of the settlement.

Following the initial story breaking in the Daily Mail, it has been suggested that the Cardiff development may be a proverbial drop in the ocean and Persimmon should be widening their focus and opening the settlement offer to all buyers mis-sold under similar conditions.

The NLC are now looking to spark more court proceedings and are sending petitions to Trading Standards and the Competition Markets Authority (CMA) in the hope of achieving similar outcomes in other areas of the UK.

Under the new regulations, all leaseholders who were incorrectly sold a leasehold property, would be able to get their freehold title outright at no extra cost. If this can be proven, the floodgates will open on the remaining leasehold properties waiting to enfranchise the land underneath them.

There was also immediate action to ban Help to Buy developers selling leasehold houses. Homes England have now renegotiated all Help to Buy contracts ‘to explicitly rule out the selling of new leasehold houses, other than in exceptional circumstances, to protect new home buyers from unscrupulous charges.’

James Brokenshire, Former Housing Secretary, also confirmed that pernicious ground rents on all new leases will be reduced to £0 in a bid to prevent leaseholders from being charged excessive fees without receiving any benefit.

The changes also looked to improve efficiency and speed in the leasehold buying process. Freeholders would be capped on the time they can take and the amount they are able to charge for vital information regarding a leasehold contract. Moving forward, freeholders will have a maximum of 15 working days to send pertinent information and can charge no more than £200 for the service.

Cath Williams, Co-founder of the NLC, said:

“For far too long leaseholders have been told that it is their own fault for signing these toxic agreements, but this report shows how little information they were actually given, meaning they were not able to make an informed choice when deciding to buy or not.

“The acid test has to be that almost all would not buy their property again on the same basis.”


  • test

    I’m not surprised. Most buyers are pushed into deals and then hustled to progress. Many conveyancers give no advice, no help and no service. Estate agents lie and generally have little knowledge of the process. All in the name of low fees, which they usually aren’t, by the time the ubiquitous indemnity policy/ies have been added, usually completely unnecessarily.

  • test

    It is hardly surprising that buyers do not get appropriate information

    The home transfer sector is dominated by legalistic attitudes. Lawyers developed and promote caveat emptor and are committed to a minimum information approach

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