Buying the freehold of a new build Persimmon house?

AnotherJoe

martinsurrey wrote: »

I think you'll find that its not justifiable bad publicity, its media driven hysteria.

There are a tiny minority on freehold houses (and flats) with terrible leases (the type that double every 5-10 or even 15 years).

These are, and have always been terrible, but "normal" leaseholds with terms of 200-999 years, ground rents that rise with RPI or double every 20/25 years, number in the millions, and have been part of our national legal framework for 50+ years, they are not and will never be "tarnished remnants".

As with every house purchase since you could buy houses, you need to do your due diligence, but a blanket walk away from leaseholds will severely limit your new build choices.

Many of them have justifiably bad publicity plus even for the ones you say are OK with "normal" leaseholds, there are many documented cases where the leasehold is sold to a third party who wants a much larger sum for it than was originally mentioned by the sales staff.

A blanket walkaway from leaseholds will not "severely limit new build choices" since most builders are now stopping this practice.

Its not normal for new build homes to have leaseholds, this is a new practice conjured up by builders looking to squeeze additional profit (and if they get additional profit then by definition the buyers lose out) and taking advantage of naive buyers.

The large sums asked for freeholds by the third parties who buy the freeholds en bloc will also lower the resale value of these houses.

Overall therefore, the repercussions of the downsides plus the warranted bad publicity plus the "media driven hysteria" will punish people who already bought by covering the "good" and the bad all with the same brush, anyone who buys now should be aware they are buying tarnished goods.

LandyAndy

http://www.nationwide.co.uk/about/media-centre-and-specialist-areas/media-centre/press-releases/archive/2017/5/05-protect-homeowners

sultanabran

If its an easy money-making scheme for house builders, why do they not do it in Scotland? Houses here seem to never be sold as leasehold. Are there some regulations/law which prevent it?

Captain89

sultanabran wrote: »

If its an easy money-making scheme for house builders, why do they not do it in Scotland? Houses here seem to never be sold as leasehold. Are there some regulations/law which prevent it?

Yes there are Laws to prevent this in Scotland.

martinsurrey

AnotherJoe wrote: »

Many of them have justifiably bad publicity plus even for the ones you say are OK with "normal" leaseholds, there are many documented cases where the leasehold is sold to a third party who wants a much larger sum for it than was originally mentioned by the sales staff.

and every single one of those cases can take the negotiation to the tribunal which will set the price fairly, not a single example in the current batch of publicity have done this

A blanket walkaway from leaseholds will not "severely limit new build choices" since most builders are now stopping this practice.

40% of national new builds are leasehold, don't forget that the current issue is with both houses and flats, the only real difference with houses is that the owners dont get right of first refusal on the sale of the lease, but they have identical rights to buy the lease after 2 years and tribunal valuation if a price cannot be agreed, and builders have said they wont offer crazy leases (10 year doublers), not that they wont offer any.

Its not normal for new build homes to have leaseholds, this is a new practice conjured up by builders looking to squeeze additional profit (and if they get additional profit then by definition the buyers lose out) and taking advantage of naive buyers.


The large sums asked for freeholds by the third parties who buy the freeholds en bloc will also lower the resale value of these houses.

as above, they don't set the final price, they could ask for £10m, the tribunal doesn't care what they asked for, they will set a fair price, as long as the lease is on benign terms, you will be looking at 25-35 times the ground rent

Overall therefore, the repercussions of the downsides plus the warranted bad publicity plus the "media driven hysteria" will punish people who already bought by covering the "good" and the bad all with the same brush, anyone who buys now should be aware they are buying tarnished goods.

While some people will be put off, don't underestimate the buying power of people who can read past a headline, saying "never buy a leasehold house" is akin to saying "never buy a flat" legally the protections for the leaseholder are pretty much identical, it should be "understand what you are buying before you buy it, full stop"

replies above

AnotherJoe

?obviously" my comment about it being a new practice by builders was related to houses, not flats.

I think we'll see it phasing out pretty smartish, even if due to "scaremongering" due to a few extremes, there's plenty of horror stores out there which are true, and there's also no reason except in special circumstances to sell as leasehold and then sell on the freehold to a company, who are not doing it in the expectation of getting £150 a year.

They are self evidently doing it to turn the lower market value (that the builder sells at) into a higher market value (that the vultures that run these companies will sell the freeholds on for.) Plus no doubt wanting money every time someone paints a front door, builds an extension, or probably even breaks wind, let alone a charge for the temerity of selling your house (as one person reported here very recently).

Multiply all that income by 35 and all of a sudden its a tidy sum they can prove to the tribunal, its not just the ground rent.

Bottom line, are the builders doing this because its in buyers interests or theirs? Answers on a postcard.

27cool

I think that we all know the answer to that question.

Lockylocky10

Keep me updated on this one! Im in the same boat at the moment, i'm going to put it to Persimmon tomorrow and ask them to put it in the contracts that we get first refusal of the freehold!

AlexC88

I'm looking at a Persimmon house at the moment. Has anybody managed to get the freehold thrown in, or paid a little extra?

Thanks

getmore4less

Mortgage lenders could knock this on the head immediately

They are taking the risk of an unsalable(at the valuation) property if people shy away from them.

setting lending levels on the potential for reduced liquidity would see many people unable to buy and the developers would have no choice but to make the sale terms better.