Following a request by LKP Jeffrey Fairburn, Persimmon CEO, has agreed to remove future references to “virtual freehold” in relation to their leasehold sales.
An information leaflet titled ‘Leasehold: The facts’, circulated in the North West and passed to LKP, has the following:
“How long is the Persimmon leasehold?
“It’s a 999-year lease – known as a Virtual Freehold because it is so long. It means you have the security of an extremely long lease, which you won’t ever need to extend.”
LKP raised the issue with Jeffrey Fairburn last week, complaining of “the preposterous assertion that a 999-year leasehold house is a ‘virtual freehold’ ”.
LKP said this was “misleading” and asked for an undertaking that this term, favoured in the marketing of leasehold properties, be discontinued.
“This would make unnecessary a complaint to trading standards and the Advertising Standards Authority,” said LKP.
This afternoon, Jeffrey Fairburn replied:
“The term “virtual freehold” is commonly used in a wide range of types of business across the property sector including agency, housebuilding, commercial property and auctions. A search of the internet for “virtual freehold for sale” will demonstrate this.
“It is a term that has been used for a number of years to describe a long term lease (usually a 999 year lease, such as ours).
“I hasten to point out that we do not use the term with any intention to deceive.
“At the point of reservation our customers are told if a house is being sold as leasehold. The solicitor acting on behalf of our customer is duty bound under Law Society requirements to act impartially and in the best interests of their client, in relation to the explanation of the leasehold tenure and other matters pertaining to the transaction.
“Notwithstanding the above, I am happy to remove the reference to the term “virtual freehold” in the leaflet to which you refer.”
In May last year McCarthy and Stone, the retirement housing builder, also removed the term “virtual freehold” in publicity material concerning the sale of its leasehold properties.