Persimmon House Buying

Lockylocky10

Good evening,

After having a big read up on other peoples threads I struggled to find my answer so here goes....

Myself and my partner have just reserved a new 3 bed semi detached house in Wiltshire however, 2 things... 1 being that the house is being sold as leasehold (this doesn't massively put me off due to being a 999year lease and currently £136 per annum which increases in line with the RPI every 10 years).

The 2nd thing is apparently a new scheme available on the houses, called the 'low cost scheme'. This is different to shared ownership as we would own 80% of the property (purchase price of £191,996) and the council would own the remaining 20% (full price of £239,995 give or take). We are able to purchase the 20% whenever we like from the day of completion and we pay no interest etc on that 20%.

Is anyone able to shed some light on either of the above points please?

Thank you! :beer:

Cakeguts

This is bonkers. A low cost scheme that is leasehold with ground rent at £136 per year. We don't know what the RPI will be in 10 years or whether your salary will have kept up with it.

Why are these new houses being sold leasehold? More to the point why do you want to pay £136 per year for nothing?

csgohan4

you pay no interest on the 20% but that 20% value also increases inline with house prices. So it may be worth 10k today but in 10 years you may have to stump up 20k for example

pimento

Cakeguts wrote: »

Why are these new houses being sold leasehold?

You must ask them this question.

What they will do (if you let them) is tell you you can buy the freehold cheaply after 2 years but then sell the freehold to some other company who will hike the price right up.

https://www.theguardian.com/money/2016/oct/29/new-builds-house-buyers-leasehold-property-trap

http://www.leaseholdknowledge.com/outrageous-persimmon-builds-leasehold-houses-for-the-never-ending-income-stream

ReadingTim

Don't have anything to do with a leasehold newbuild house!

Have a look here for more info on this scam, here for the £130m Taylor Wimpey have put aside to compensate 'victims' of the scam, and here to discover how that's even a scam. Finally, bear in mind that Nationwide probably won't lend against this sort of property any more anyway.

I strongly suggest you find yourself a non-newbuild freehold property: losing any reservation fee you may have paid will be peanuts compared to what you will lose on this sort of leashold newbuild scamin future...

AnotherJoe

So you'd have two different freeholders, one of which will jack the price to buy up as much as possible, a house with a fast-becoming highly unpopular leasehold arrangement, and one that also some lenders wont even lend on?

What could possibly go wrong with that when it comes to resale? :eek:

What sort of price do you think you'd get? Top of the market? Or perhaps no takers at all?

As Readingtim says, the loss you take now on your reservation fee will be peanuts compared to down the line. Walk. No, run.

satchef1

The ground rent increases by the 12 month RPI figure once a decade? If that's correct, it isn't really worth the hysteria. That's going to be well below inflation.

With any kind of shared ownership schemes, one of the pressing questions is always over freedom. How much freedom do you have to decorate, adapt, and modify your house to suit your needs?

If the value drops, does the council's share also call in value? Or are you left bearing the brunt?

Also, I'd consider the potential impact of the shared ownership model and the leasehold status when trying to sell the house on.

F_T_Buyer

I believe the ground rent is fixed for 10years, then increases by RPI every year. However, in year eleven it increases by the accumulative RPI over the 10 years.

The developers clearly want you to buy the freehold, so they get two bites of the cherry so to speak.

parking_question_chap

ReadingTim wrote: »

Don't have anything to do with a leasehold newbuild house!

Have a look here for more info on this scam, here for the £130m Taylor Wimpey have put aside to compensate 'victims' of the scam, and here to discover how that's even a scam. Finally, bear in mind that Nationwide probably won't lend against this sort of property any more anyway.

I strongly suggest you find yourself a non-newbuild freehold property: losing any reservation fee you may have paid will be peanuts compared to what you will lose on this sort of leashold newbuild scamin future...

This is all you need to read.

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