Persimmon’s about-turn on selling rip-off leasehold houses with high ground rents has infuriated a group of leaseholders at Harrow View West, in north London.
They bought their houses leasehold with 10-yearly RPI ground rents, but Persimmon is now selling the rest of the site freehold following the public furore.
“We will be the only leaseholders in the entire development,” says Anis Kasmani, speaking for the leasehold owners. “Without a doubt this will impact the value of our property as we will be up against the rest of the freeholders.”
The leasehold owners have demanded that Persimmon – which apparently still owns the freeholds – offer them for sale immediately, but it refuses to do so.
Damian P Seddon, director of Persimmon Homes North London, told the leaseholders earlier this summer:
“Our position remains consistent with previous correspondence regarding leaseholders ability to purchase the freehold after two years of ownership at a value of no more than £3,750 on the basis Persimmon remain the freehold owner at the time of application, which we have stated we will retain ownership for the two-year period.
“We have simply changed our policy for a new phase, after the time you purchased, to freehold …
“Leaseholders have a choice of purchasing the freehold or continue to pay the low rent which can only increase each 10th year anniversary in line with RPI. We see no need for a meeting as we have set out our position which remains unchanged.”
But Mr Kasmani says:
“With all the noise surrounding the national leasehold scandal and government’s plans to ban leasehold on new build houses, how can this matter be considered closed at your end?
“The government is clearly stating that the new-build houses should never have been sold as leasehold and that the builders have been exploiting the housing market, especially the first-time buyers who are relying on government-aided Help to Buy scheme.
“What is the way out, or resolution, for the people who are currently stuck with leasehold? Does any of this change Persimmon’s position and approach towards the existing leaseholders?
“With the leasehold ban in place for future new build homes, we will be in a much weaker position as we will be the only leaseholders in the entire development. Without a doubt this will impact the value of our property as we will be up against the rest of the freeholders.
“What would you have done if you were in our shoes?”
Related posts:
Persimmon sold leasehold houses for £50,000 more than same-size freehold houses at Harrow View West
No van man here: Persimmon bans first-time buyer from parking his van at his leasehold house
Mass email dump: leasehold home owners demand their freeholds after Persimmon caves into court action
Leasehold house owners thank Brokenshire after Persimmon sells freehold to leasehold house for less than £3,750
Newcastle leasehold house owners stuff attempt by Barratt and Keepmoat to sell their freeholds
E&J Capital Partners in full retreat over rapacious ground rent terms
Why not demand that Persimmion sign a legal document declaring that they will not sell the ‘First Phase’ Freeholds within the 2 yr period. Leaseholders in that ‘Phase’ should then exercise their right to purchase the Freehold at £3′ 750 quoted.
If Persimmion refuse they will crucified in the media and elsewhere. Make as much noise as is possible to hold their feet to the fire.
Yes Kim, I sense serious danger here. Read Persimmon words carefully.
They say the FH can be purchased after 2 years for 3750.00 PROVIDING they, Persimmon, are still the Free Holder, BUT, will they be. A written agreement should be given to the leaseholders NOW.
If they are being honest, why not do the deal now, as no point in waiting
Exactamundo!! Persimmon must give a written undertaking to leaseholders that the Freehold will NOT be sold to a third party. The devil is in the detail.
****Response from Director in Charge – Damien Seddon ****
Dear Mr Kasmani
Thank you for your email of 7 August addressed to Mr Fairburn. Mr Fairburn has asked me to reply as I am responsible for the development at Harrow View.
Homes on the initial phase of the Harrow View development were offered for sale on a leasehold basis. The prices offered and agreed with our customers reflected this leasehold tenure. Had I decided to offer the freehold interest for sale then the price offered would likely have been higher as is usual in these circumstances. The terms on which customers purchased their homes were fully disclosed within the contracts and each customer will have been advised by their own solicitor at that time. The choice as to whether a customer proceeded with the purchase was theirs and theirs alone as advised by their solicitor, together with perhaps an independent financial advisor and mortgage provider.
As you can appreciate market prices fluctuate according to the demand for a particular type of property in a particular location constantly. Despite potential short term fluctuations in pricing our customers are usually intending to own and occupy the newly purchased home over an extended period of years and so will look forward to the long term appreciation in value that has historically accrued whilst enjoying the amenity value of the new home.
On reviewing the basis of releasing additional homes for sale on a development, in particular on starting a new phase, an important consideration for myself is the anticipated economic performance of the development for the remaining period over which my team is able to complete the development of the site. As you can appreciate I have my own internal targets to meet and I work with my team to achieve the best possible outcomes for the business. My assessment will always include whether to offer leasehold or freehold tenure for sale and the assessment of the resulting anticipated revenues which we are able to generate as a key part of our objectives. I decided to offer freehold tenure for sale on the later phase at Harrow View as I judged it was in the best interests of my business to do so. By selling the freehold interest we were able to achieve a swifter sales rate so as to complete the development over a shorter period of time. The eventual price achieved for the freehold homes reflected market conditions at the time.
Should you wish to purchase the freehold interest in the property you have the right to buy the freehold subject to owning your home for two years in line with existing legislation. Persimmon will still own the freehold interest and so will be happy to sell the freehold interest to you at that date at a value which we are guaranteeing will not exceed 25 times the annual ground rent then payable. Alternatively, again after two years of ownership, you can elect to pursue a statutory route to enforce your right to purchase under existing legislation. Should you decide to pursue this route there is a formal process of valuing the freehold interest which will conclude the value at which the freehold interest can be acquired. Persimmon’s guarantee with respect to the sales value of the freehold which will be “no more than 25 times the annual ground rent then payable” is intended to give you certainty as to the value of the freehold interest which you have the right to acquire at that date.
We understand customers concerns regarding the recent adverse press regarding leasehold properties. However, this primarily relates to situations where there is a provision in the lease to increase the ground rent periodically at a rate above inflation. Your lease, and other leaseholders on this development are not affected in this way. You have the security of a 999 year lease with a ground rent charge which is fixed for a 10 year period at £150 and which will change in line with the Government’s Retail Price Index on each tenth anniversary, which provides a good and marketable title to your property. As an example, if you purchased a home 10 years ago with a ground rent of £150, the ground rent would be £198 today and that would be fixed to 2026.
Regards
Damian
Damian P Seddon
Director In Charge
Persimmon Homes North London
Persimmon House
Vanwall Business Park
2 Vanwall Road
Maidenhead
SL6 4UB
Tel No: 01628 502800