Propertymark – Most leaseholders regret buying
According to NAEA Propertymark, the next mis-selling scandal may well be the selling of leasehold houses, with almost half of home buyers not knowing the full terms of their deals “until it was too late.”
The findings come from the body’s latest report: “Leasehold: A Life Sentence?” which polled leasehold home owners on their experience of buying, living in, and selling leasehold property.
Hinting at the cause of major dissatisfaction from buyers, the report states that 78 per cent of leasehold house owners bought their property directly from the developer, and that 65 per cent used a solicitor that the house builder recommended. Of these people, 15 per cent say that were not informed of that they were entering a leasehold deal.
Issues such as escalating ground rent (which 48 per cent of respondents say they weren’t aware of) resulted in 94 per cent of those asked about buying a leasehold stated that they regret buying a leasehold house.
As for living in a leasehold property, 10 per cent of respondents faced a charge for making a cosmetic change further to needing permission to make cosmetic changes.
When it comes to selling a leasehold house, 31 per cent of the people asked said that not owning a freehold was causing problems on the market, and 25 per cent reported that prior interest had dissolved once the potential buyer was informed of the leasehold. Of these people, 93 per cent regret buying.
NAEA Propertymark chief executive Mark Hayward comments: “Buying a home is a big undertaking, and one of the biggest financial and emotional investments we make. Those who buy a newbuild are often under the impression that buying something brand new means it will be perfect, but unfortunately that isn’t the case and most buyers have no idea about the trappings of a leasehold contract until it’s too late.
“In June, the Secretary of State for Housing, James Brokenshire, announced that housing developers would no longer be able to use new Government funding schemes for unjustified new leasehold house sales. This is good news for future homeowners, particularly first-time buyers who accounted for 50 per cent of leasehold house sales over the last 10 years; they typically have less bargaining power in the market so often opt for newbuild sales directly from developers. However, the challenge now is looking at what can be done to help those stuck in leases.”
Source: Mortgage Strategy