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The four-bedroom Persimmon property was priced at £219,995, and has £150pa ground rent that increases every 10 years with RPI.
“It is available to purchase with the Help To Buy scheme,” said the buyer.
The buyer was told that he could buy the freehold in two year’s time and that it would cost £5,000 to £7,000.
Of course, there is nothing to stop Persimmon selling the freehold at any point to their customers. It is simply more profitable to offload them onto their regular investor clients.
Persimmon’s slogan is “Together, we make a home”.
Which might more accurately be:
“You get a long tenancy (with a leg-up from taxpayers thanks to the Help To Buy scheme), and we flog a long term investment asset class at your expense.”
Persimmon sales staff were describing leasehold houses as “virtual freehold”, which is a term increasingly used by housebuilders’ sales staff to describe leasehold houses.
The term is misleading and should be reported immediately to the Advertising Standards Authority and to the housing minister.
The would-be Persimmon purchaser was recommended to use QualitySolicitors Davisons for the conveyancing.
LKP advises: In any property purchase a recommendation by the seller to use a certain firm of solicitors is, IN ITSELF, a reason not to use that firm.
It is also the case that in leasehold conveyancing, buyers need more thorough legal advice than with a freehold purchase.
The most valuable advice solicitors can give a buyer is: Don’t touch this one with a barge pole!
It should have been given by the solicitors who landed buyers of Taylor Wimpey properties with doubling ground rents.a
The Coventry buyer wrote to LKP: “Thank you so much for the work you do in enlightening and bringing these activities to light. How else would a first time buyer and a novice too have known all these?
“With your permission, I will like to forward this correspondence to MPs for Coventry.”