As a result of purchase assistance, many builders began selling leasehold homes where traditionally homes had always been freehold. Over time, this became a subject of debate on which the government felt the need to intervene.
Some of the nation’s homebuilders have been accused of putting profits ahead of their social conscience when they realize they have to build homes for families to whom they also have shareholders to answer to.
The media had made it known publicly that there was a land bank situation.
Land banking is a real estate investment program that involves buying large blocks of undeveloped land with a view to selling the land at a profit once it has been approved for development
Through consolidation, some builders have inherited land in their organizations which are on a lease basis.
It is a moot point that they offer both leasehold and freehold properties for sale so buyers can make an informed choice.
What about people?
Many people had felt that the market had become far too letting-oriented when it came to light about the profits that builders had made from leases.
Things came to a head when the chief executive of one of the UK’s biggest builders was handed a bonus of over £100million. At the time, it was one of the largest bonuses paid in the company’s history.
Some leaseholders have been shocked to be quoted thousands of pounds in fees when asking permission to make alterations to their homes.
The fees were charged by their lease management companies.
Some of the annual ground rents were set to double every ten years, and homeowners could see that it would be more difficult to sell their home in the future once these increases took effect.
After briefing their MPs and getting the matter debated in Parliament, the government agreed that if you are buying a house (not a flat or apartment) then it is reasonable that you own the freehold.
What can you do?
If you own one of these homes and were unsure if it was a lease, you should have known. If you feel that the attorney acting for you has not given you all the facts about the lease you signed, you should contact them immediately to find out why.
You can contact the owner at any time if you want to buy the property from him.
In addition to leases, there is the issue of service fees.
When councils grant permission for house builders to build on the land, they do not always agree to adopt common areas such as
This means that the maintenance of these areas must be outsourced, usually to a private company. The owners of the sector then contribute financially to these maintenance works in addition to their housing tax, it can happen that the house is leased or in full ownership.
Service charges may increase. Sometimes neighborhood residents come together to form an association that can enable them to choose another service provider.
If you are considering buying a leasehold property, seek advice from your lawyer regarding the lease.
It’s easy to get carried away with the excitement of buying a home, but you also need to realize that this is an important investment decision that you need to think about carefully.