HTB starts to sting

Graham_Devon

Didn't realise this, but it appears investors are buying up leaseholds on Help to Buy properties and then charging the owners as much as 16x the original cost to buy the freehold.

BBC entitle it as "the property trap effecting thousands".

I guess where there is profit to be made, people will make profit.

What Bellway has done - selling a new home as leasehold, and then selling the freehold separately to an investment company without informing the family living there - is not illegal.

In British law, the "right of first refusal" applies to flats, but not houses. So it was not legally obliged to tell Katie it would do this.

For an investment company, buying groups of freeholds is a safe long-term investment. Receiving regular payments for ground rents - over leases that number well over 100 years - means safe, steady incomes, to fund things like pensions.

But nowhere on Bellway's website is this system made clear to potential buyers and Katie feels these facts were not made clear to her. She also says the solicitor - recommended to her by Bellway - made no mention of this possibility either.

Katie says because she bought the house through the government's Right To Buy scheme, she felt she could trust the process.

http://www.bbc.co.uk/news/business-38827661

mrginge

This is nothing to do with HTB.

wymondham

I suppose the leaseholder always has this right.... pity the people drawn into these schemes are least likely to be able to protect themselves since they are used as funds generally are short?

HAMISH_MCTAVISH

Graham_Devon wrote: »

Didn't realise this, but it appears investors are buying up leaseholds on Help to Buy properties and then charging the owners as much as 16x the original cost to buy the freehold.

BBC entitle it as "the property trap effecting thousands".

I guess where there is profit to be made, people will make profit.

http://www.bbc.co.uk/news/business-38827661

This doesn't appear to have anything to do with help to buy.

It can and does happen to leasehold properties on newbuild sites regardless of whether they were bought through HTB.

wotsthat

Here's a suggestion for anyone who doesn't want to buy leasehold - don't buy leasehold. It's a radical idea I know.

michaels

If you were told that buying the freehold would be 2-4k and not warned 'but that culd rapidly escalate to several times the upper value' by your solicitor then I would say you were mis-advised.

It is also unclear whether the value of the freehold really has gone up that much, was misrepresented originally, or perhaps the current owners are using the cost of forcing a fair valuation via the mechanism to try and get more for the freeholds than they are actually worth.

For example say the freehold is worth 5k but it costs another 6k to get that valuation confirmed then the freeholder can offer it to the leaseholder for 10.9k and be laughing....

ProDave

The only lesson I see here is use a solicitor of YOUR choice so he is acting for your best interests, and read what you are sighing and discuss it with your solicitor if in doubt

mayonnaise

This is nothing to do with HTB.

Ronaldo_Mconaldo

They really need to put a warning on Victoria Derbyshire related news story rubbish like they do with Newsbeat so that I'll know not to waste my time clicking the link. I'd read almost 2 paragraphs of that story earlier before I found out and closed the page. Po-faced idiocy.

Conrad

One of the developments I've been waiting to come up is a Bellway development oddly enough, but a leasehold flat not a house. Lenders typically steer clear of leasehold houses for all sorts of reasons.


£13k for a freehold is a bargain, I don't know what this woman is whinging about - this talk of her property having turned out to be a terrible investment is ridiculous. Trust a know nothing 'journalist' to get it all wrong yet again, more fake news.

Masomnia

ProDave wrote: »

The only lesson I see here is use a solicitor of YOUR choice so he is acting for your best interests, and read what you are sighing and discuss it with your solicitor if in doubt

Definitely. It makes you wonder if the person they recommended is actually a solicitor as opposed to a licensed conveyancer. Fortunately though my sister is a property solicitor so I'd just get her on the case She's always saying the worst thing you can do is use the person they recommend, though I supposed she's biased.