Headed “Information about leasehold properties”, the document provides little useful information and is highly misleading.
The first problem comes in the second sentence:
“Sale by way of a leasehold structure is a very common form of property ownership.”
All law and regulation, and leases themselves, make it clear that leasehold is a tenancy: that the leasehold owner owns neither the land nor the building in which the tenancy is held.
Bellway Homes, like so many others in the sector, seek to confuse the public into thinking that this long tenancy is somehow “property ownership”.
The second problem comes when Bellway Homes says that the 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”.
Land Registry figures contradict this assertion. The Leasehold Knowledge Partnership published in the All Party Parliamentary Group on leasehold reform report a comparison of freehold and leasehold house sales.
Often the leasehold houses cost more. This was the case in Manchester, Liverpool, Northwich and Chester.
Leasehold houses cost less than freehold in Preston, Newcastle, Warrington and Sheffield.
The evidence suggests that housebuilders sell the properties for whatever they can achieve, and in the recent past leasehold houses have been a storming business. Especially given the freehold sale to anonymous investors, who hide their beneficial ownership behind nominee directors and are often based offshore.
Bellway Homes explains that its ground rents increase with RPI after eight years and subsequently after every five throughout the lease.
The ground rents are for no service whatsoever, although Bellway Homes does not make this point.
Then comes a frankly disgraceful section titled “Do I need to notify the freeholder of any changes?”
This refers to alterations of the property, such as an extension, porch or conservatory.
Leaseholders do not simply notify the freeholder: as the building and land are his and leaseholders are renting it, they require freeholder’s consent.
In other words, you pay for this. And often you pay a considerable amount.
A favoured wheeze among freeholders at present is to issue “free” consent licences for alterations: this means you can do the works, but when you come to sell the licence expires.
At the very point when you have a buyer and are completing the sale, the freeholder pops up to demand significant payment for the consent of the conservatory.
There is not much a leaseholder can do about this. The freeholder is in a position to stuff the resale of a leasehold property.
These games happen again and again and again in the leasehold world.
Bellway Homes lease terms insist that the property is occupied by one family only, that it cannot be used for business and no commercial vehicles can be parked outside.
Bellway Homes says that the restrictions, or covenants, also apply to its freehold houses that it sells.
But this involves a completely different body of law, without any of the vulnerability of being a leasehold tenant.
Covenants in freehold properties can be burdensome, and an organisation called HorNet, is fighting this:
But vexing though these covenants are, they are minor compared with the vast sums of money extracted from the owners of leasehold properties.
You are in a far better position fighting back as a freehold home owner than you are as a leasehold tenant.
Surely it is enough to ask why do Bellway Homes, Persimmon, Taylor Wimpey, Redrow and Barratt all want you to buy properties leasehold? And can this possibly be in your interest?
Bellway Homes then considers the sale of the freehold to your leasehold house.
“The companies which we sell our freeholds to are reputable institutional investors, typically pension funds.”
Actually, we have no idea who Bellway Homes is selling the freeholds to. Some have been bought by Adriatic Land, which hides its ultimate beneficial ownership behind nominee directors.
The ground rent and consent fee management company Homeground, owned by Will Astor, the brother-in-law of former prime minister David Cameron, has admitted that his company manages freeholds for offshore entities.
Bellway Homes tells the leasehold house buyers that it will inform them when the freehold is sold. In fact, it has no obligation to do so.
Then comes the section: “Can I purchase the freehold when I purchase the property?”
Bellway Homes doesn’t like this idea much: “Although there is no need for you to do so, where Bellway own the freehold on a development, we may be able to sell your property to you on a freehold rather than a leasehold basis.”
It suggests discussing this with a sales advisor.
LKP’s advice on the other hand is to insist on the freehold, email Ted Ayres, the Bellway Homes CEO, your MP, the All Party Parliamentary Group on leasehold reform and the housing minister.
This usually ensures that the request is taken seriously.
The Bellway Homes document can be read by clicking these: