Leaseholds banned on new build homes

economic

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

Rule number 1 (the rule to rule all rules): Never trust the government.

Graham_Devon

economic wrote: »

What do you mean by leasehold is no different in price to freehold? Can you explain this?

You stated that buyers buy leasehold houses as they are cheaper to buy.

This isn't necessarily the case and research based on land regitry sales backs this up.

economic

Graham_Devon wrote: »

You stated that buyers buy leasehold houses as they are cheaper to buy.

This isn't necessarily the case and research based on land regitry sales backs this up.

Well of course it does, as the buyers overpaid for their properties. They were ill advised by their solicitor/valuer or they didn't get a valuer.

If they got a valuer who is independent and competent, the valuer would have highlighted the cost to buy the freehold to the buyer. The solicitor would have highlighted this also to the buyer. Buyer would have been made fully aware. Buyer then pulls out or reduces offer.

Its really that simple. But trust the government to somehow screw things up

economic

So the developers made a killing by selling on leasehold properties at freehold prices. They then flogged the freehold to an investment company to monetize on this gain. Smart developers.

What do the buyers do in terms of valuation? Do they get a full survey done and if so by who?

economic

The other question is if things were done the proper way (my way), would the developers even be incentivized to develop? Their margins would be reduced and perhaps to a level not worthwhile?

economic

Why does Katie want to buy the freehold all of a sudden anyway? I thought this was her forever home, its not like she will live another 150 years!!!

economic

ilovehouses wrote: »

It's because, if it's Taylor Wimpey, she's belatedly spotted there's a leasehold clause that doubles the rent every 10 years. So, if it's her forever house the rent will be going up by about 7.2% year. If it's not her forever house she won't be able to sell it.

I know of one buyer who, with eyes open, purchased such a property because they thought the term was unfair and Taylor Wimpey would have to remedy this in the future.

Turns out they were correct. TW came to terms with the freeholder and 7.2% turned into RPI - better than a kick in the !!!!.

You'd think the neighbours of that chap would be quite pleased but, no, they still can't manage to put their rubbish in black bags.

They didn't realise what they'd signed up for. They didn't realise their intrepid neighbour has saved them thousands. It's a massive apathy play.

Ultimately its the peoples fault for being stupid to buy these properties.

zagubov

Perhaps councils should build the houses.

Or if they use developers, show them they can't fight city hall.

The market's serving the suppliers far too much better than the consumers.

economic

ilovehouses wrote: »

I 98% agree.

Why only 98% agree? It is fully the buyers own fault for being stupid. I think it just shows how people are easily willing to sign for something when they don't know what they are really getting.

I guess you can not help stupidity.

Graham_Devon

economic wrote: »

Why only 98% agree? It is fully the buyers own fault for being stupid. I think it just shows how people are easily willing to sign for something when they don't know what they are really getting.

I guess you can not help stupidity.

I wouldn't say people are stupid.

Every day, we rely on others to ensure we are protected from adverse events. It's what makes a society work.

You could say people are stupid for various things, but not everyone can be an expert in everything and we have to take advice of experts in every step in every day life.

What next? You catch a taxi and are "stupid" for putting trust in the driver even though he's regulated? You go under anaesthetic and you are called "stupid" for trusting qualified professionals to ensure your safety and dignity at all times? Have a car accident and get told you were stupid for not ensuring someone else didn't hit you? Buy a car and get told you are stupid for not testing the airbags to ensure they actually work?

There are some who will buy anything without any research, sure. But if you are told by your solicitor you will be able to buy a lease for X amount, and then find out you can't as it's been sold, that's not stupidity. Similarly, if you aren't advised at all about the pitfalls, that's not stupidity...you don't know what you don't know.

If you don't understand the detail around leases vs freeholds that's not stupidity, you rely on advisors whom you are paying for a service to advise you.