Buying the freehold of a new build Persimmon house?

alex_163163 · 6 February 2017 at 10:36PM

Just looking for some first hand experiences from any forum users.....

Myself and my boyfriend are in the process of buying a new build house from Persimmon.
It is a leasehold property, and we have been aware of this from the outset. However there has been a lot in the media recently about the con of new houses being leasehold, which I fully agree with to be honest. I understand it is basically a cash cow for the developers to make more money.
Having said that we love the house, love the location, and don't like anything else as much that is in the area or price band we can afford. We are prepared to have to pay for the freehold in the future, at a fair price.
Now we have done our research into the possibility of buying the freehold in the future, so I know after 2 years of owning a lease on a house you have the legal right to serve the freeholder with notice and buy the freehold forcibly (obviously incurring legal and surveying fees from both parties).
I also have heard that some developers offer you the freehold after a couple of years, but I also know that for a house, the developer doesn't have to give the leaseholder first refusal on it, and can sell it to 3rd party company.

I guess what I am wanting is to hear back from anybody who has bought a Persimmon leasehold new build, and their experience of being offered/ buying the freehold further down the line.
What price did they offer it to you at? Did you negotiate on this? What legal/ other fees did you incur?
Has Persimmon sold the freehold to a 3rd party company without your nowledge/ without offering it to you first?
I have heard a lot of negatives about Taylor wimpey, and redrow, and bellway, but nothing on Persimmon so just wanting to hear anyone else experiences with them please?

Doozergirl · 6 February 2017 at 10:48PM

I'm not going to answer your question directly, sorry.

But people always shy away from leasehold houses for good reason. I only ever seem to read about ones built in the mid-century that are now worth nothing because people didn't know they should extend them, or this fabulous new rip off by the developers.

It's such an abhorrent practice to me, with no legitimate basis to it other than to make even more money from churning out the same old rubbish.

Pay an interior designer to turn a normal house into a show home. It would be better value and you'd actually end up with a show home, not a tiny magnolia box.

I do apologise. I don't want to pee on your newly lit fire, but these people charge a premium for absolutely nothing. And then people are being held to ransom with leaseholds.

Doozergirl · 6 February 2017 at 10:50PM

One cery certain fact is that Persimmon are not selling you a leasehold property for your benefit.

There is no fair price for a leasehold if Persimmon start as freeholders and there are no flats which demand a lease. They should be freehold from the off.

If you must buy the house then negotiate the freehold immediately.

Hoploz · 6 February 2017 at 11:05PM

Ask whether there is an option to purchase the freehold straightaway.

alex_163163 · 6 February 2017 at 11:09PM

Thanks for your replies. To answer both of your points:

The town we live in is a newish town that has expanded greatly over the last couple of decades. The majority of houses here are new build from the 80s onwards to present and a large proportion are leasehold, so to discount them all severely limits our options.

I completely agree that the practice of selling leasehold houses is not for my benefit, and is a cash machine for the developers. I don't think it is very ethical or moral, but alas it is the situation we are in so we are trying to get as informed as possible before we exchange and are legally bound to the purchase.
Legally speaking, a leaseholder does not have the legal right to serve notice on the freeholder to buy the freehold until they have owned the lease for 2 years. Our solicitor is looking into persimmons policies for buying freehold in the future, but was just wanting to hear if anyone has specific experience with Persimmon on here, whilst our solicitor waits for this info from Persimmon.

Doozergirl · 7 February 2017 at 12:17AM

You don't have the legal right to force a sale on them for two years.

Before that timemyou have every right to ask. Any reasonable freeholder will come back with an offer. If they are witholding, it is for a reason.

So that is where you start.

If the answer isn't positive then Infully recommend buying an exosting house where the leasholder already has the entitlement tonforce a sale or a very decent lease extension and include it in the sale to you.

getmore4less · 7 February 2017 at 12:58AM

By the time you come to force the sale to you of a freehold it will be in the hands of someone else who will be experts at extracting more cash from you.

The warning signs are there already the scam is blown.

don't be one the last people in the UK to fall for it unless you want to have house you can't sell.

freehold or walk.

Avoid dodgy estates where there are management fees on freeholds as well.

edit:

forgot to add even with a freehold you are not out of the woods with new build, there are often covenants that you pay a fee and get approval if there are are certain things you want to do like make modifications.

martinsurrey · 7 February 2017 at 9:16AM

For once Doozer I'm not agreeing with you.

A lot of talk on here about big bad developers, but little in the way of facts.

OP, what are the terms of the lease, years? Current rent? uplift clause (double every 10-15-20-25 years).

Without those facts we cant say if its going to be an expensive or cheap purchase of the freehold, or even if its worth buying, a 999 year lease with £100 ground rent uplifted by RPI every 10 years is not worth buying.

alex_163163 · 7 February 2017 at 10:29AM

The terms of the lease are 999 years, increasing every decade in line with RPI. Starting rent is £150 per year.
Can I ask why you say it would not be worth purchasing a lease of this type? What we want to avoid is ending up with an unsaleable house 10+ years down the line, so would be prepared to buy the freehold, but it sounds like you think that these terms would not be a problem to sell on.

martinsurrey · 7 February 2017 at 10:37AM

alex_163163 wrote: »

The terms of the lease are 999 years, increasing every decade in line with RPI. Starting rent is £150 per year.
Can I ask why you say it would not be worth purchasing a lease of this type? What we want to avoid is ending up with an unsaleable house 10+ years down the line, so would be prepared to buy the freehold, but it sounds like you think that these terms would not be a problem to sell on.

not an issue at all.

leasehold houses are a major issue for the same reasons leasehold flats would be, short leases, and unreasonable ground rent increases.

RPI increases every 10 years mean that it is only ever at MOST be £150 in real terms and for 9 years it is below £150 in real terms.

999 years on the lease make it not an issue of length of lease either.

the reason I wouldn't bother buying it just now is because of legal fees, you pay for both sets for the purchase and change of title (if you make the house freehold), that could easily be £2-3k + the purchase price, to save £150 a year, its just not worth it, unless perssimmon make a good offer as part of the purchase (I would pay 4-5k for it all in).

I would be looking to buy the house now, and then buy the freehold as part of selling it to the next person (and as long as thats 2 years away you have a a statutory right to purchase), it cuts down the admin.

alex_163163 · 7 February 2017 at 9:11PM

martinsurrey wrote: »

not an issue at all.

leasehold houses are a major issue for the same reasons leasehold flats would be, short leases, and unreasonable ground rent increases.

RPI increases every 10 years mean that it is only ever at MOST be £150 in real terms and for 9 years it is below £150 in real terms.

999 years on the lease make it not an issue of length of lease either.

the reason I wouldn't bother buying it just now is because of legal fees, you pay for both sets for the purchase and change of title (if you make the house freehold), that could easily be £2-3k + the purchase price, to save £150 a year, its just not worth it, unless perssimmon make a good offer as part of the purchase (I would pay 4-5k for it all in).

I would be looking to buy the house now, and then buy the freehold as part of selling it to the next person (and as long as thats 2 years away you have a a statutory right to purchase), it cuts down the admin.

Thanks for this advice. Think we have just been scared recently by all the stories in the press!

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Buying the freehold of a new build Persimmon house?

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