Bellway is circulating a leaflet in the North West to try to persuade potential buyers that all is well with a leasehold house purchase.
“As part of a leasehold tenure, the homeowner will pay a modest ground rent which they will be made aware of upon enquiry or at the point of reservation …”
That last bit is contentious, as a rather large number of customers, whether Bellway or other housebuilders, claim ground rent is not a term heard often, if at all, from the lips of developers’ sales staff.
Nonsense terms such as “virtual freehold” to explain away the snares of leasehold are quite common, however.
“The benefit of us receiving this annual ground rent allows us to sell leasehold homes at a very competitive price and at a lower cost to the purchaser than a freehold sale.”
This is highly questionable.
There is, on the contrary, evidence showing leasehold properties being sold for the same amount as comparable freehold properties.
Fortunately, owing to housebuilders being caught out over the leasehold houses scandal, informed consumers will hopefully be giving these dubious products a wide berth.
But the most dubious bit is this:
“Do I need to notify the freeholder of any changes?
“You will be required to notify the freeholder if you re-mortgage or if you wish to make alterations to the property.
“Consent for alterations to the building (including extensions, loft conversions and the erection of conservatories) will need to be granted before you may start any works.
“In both instances, there will be a reasonable fee payable and it is important that you seek consent under the lease prior to any alterations as otherwise fees for retrospective consent could be higher.
“These conditions apply to all of our purchasers on both freehold and leasehold sales and ensure that the development you purchase upon retains the original character intended.”
Now there may well be covenants preventing conservatories etc on a freehold house purchase. There may even be a communal service charge to maintain common parts to an estate.
But you certainly do not require any consent from a freeholder, because that is you.
The other big porkie, although it is by no means unique to Bellway, is the continual reference to leaseholders as “homeowners”, as in:
“Ground rent is an annual payment by the homeowner to the person who owns the freehold, payable on 1st of August in
each year …”
Leaseholders are referred to very accurately as “tenants” in all relevant legislation and legal documentation.
If the courts are referring to leaseholders as “tenants”, then the sales blurb from housebuilders should do so as well. The omission of this precision is a major factor in the very convenient confusion over what precisely is involved in a leasehold property purchase.
The full Bellway document is below:
Information on Leasehold Properties all 999 year sites Bellway