Here is an encouraging letter from the owners of a Persimmon leasehold house at Links Crescent, Seascale, in Cumbria.
There is nothing remarkable in Persimmon selling a freehold for around £3,750, which is 25 x annual ground rent of £150.
This is what our spoon-fed plc housebuilders – whose profits have been driven by taxpayer funds via Help To Buy – tell MPs a freehold is worth.
Before they flog it to some offshore private equity speculators who demand ten times as much, that is.
This is a rare example of a leaseholder thanking Communities Secretary James Brokenshire, so the email has novelty value. Included is the local Conservative MP for Copeland Trudy Harrison
Dear Trudy Harrison MP and the Rt. Hon James Brokenshire MP,
On 06 August 2018 we emailed, by way of putting pressure on the then CEO of Persimmon Homes Mr Fairburn to address the issues we had been having in purchasing the freehold on a Persimmon new development in Seascale Cumbria. We also asked Mr Fairburn to look again at the matter of estate service charges.
We have now resolved the freehold issue and write to thank you for your assistance and to tell you of our experience in case it helps you when contributing to future legislation:
As a result of the weight of your names on our email, Persimmon homes, through their Lancashire Managing Director Mr John Roocroft, agreed to revisit their freehold asking price. They reduced their offer of £3750 (£150 ground rent x25) by a few hundred pounds. We cannot name the exact figure as we are told that this is confidential.
A condition of the cheaper asking price was that we accepted standard terms and did not negotiate. Our solicitor was however able to later remove several unattractive elements before execution as a deed.
The issue of MRICS valuations was not addressed. Persimmon appear still to see all valuations, other than their in house x25 ground rent calculation, as improperly calculated – see this excerpt from an email to us dated 11 April 2018:
You are of course free to obtain your own valuation. You would need to appoint a suitably qualified valuer and ask him to send us his reasoned calculation of the rent multiple (based on the statutory formula contained within the Landlord Reform Act 1967). On our review of the valuation, if we are content that it has been properly calculated, we will be happy to transact at the price calculated.
From the time we wrote our email to you Persimmon Homes became much more helpful and significantly quicker in dealing with our queries (in particular the in house legal department became willing to accept calls directly. Before we emailed you we had to contact Customer Services, who then contacted Sales who then contacted the legal team in York).
The biggest money making racket seems to have been our solicitors and chartered surveyors. In both cases these professionals didn’t take the initiative to chase up receipt of documents and were not proactive in resolving, what must be for them, common problems – we had to do all this ourselves: telephoning and emailing, effectively headbutting the matter to a speedy resolution. Yet we still had to pay their professional fees. It would seem to us that this is where most future reforms will need to be focused – a streamlined process with no roadblocks and reduced fees.
We received no satisfactory response regarding ways to reduce or remove ground maintenance costs – the so called ‘fleecehold.’ [Where leaseholders and freeholders are charged a large annual fee for the upkeep of often small areas of shared public space thus making their houses difficult to sell on].
I understand your colleague, Helen Goodman MP, the MP for Bishop Auckland is an advocate for legislation on fees for the upkeep of common spaces (interview given on BBC Look North Sun 02 Dec 2018). I also understand that your colleague, Sue Hayman, the MP for Allerdale has been working with her constituents on issues affecting Persimmon Homes developments – in particular high ground maintenance costs or ‘fleecehold.’ I am sure together you will be formidable in creating good legislation that will resolve this ‘fleecehold’ issue.