LKP was asked to reply to a reader’s inquiry by the Property section of the Sunday Times at the weekend.
They are a monetising scandal whereby a plc housebuilder rips off its customers by creating an income stream at their expense for often shady investors.
Worse, taxpayers have been gulled as well as many mortgages are underwritten by the Help To Buy scheme.
Opprobrium has fallen on Taylor Wimpey – which insanely for its own reputation introducing high ground rents doubling every ten years between 2007-2011 – but the company that has really cleaned up building leasehold houses is Persimmon.
Chief executive Jeffrey Fairburn said in this year’s company report:
“The housebuilding sector is attracting ever greater scrutiny from different stakeholders and for different reasons.
“This is something we welcome as only by creating a shared understanding of the challenges we face will we be able to identify and implement effective and sustainable solutions that benefit not just our industry but the country.”
LKP feels that its inquiries into leasehold houses have been anything but welcome (although, to be fair, Bellway has also been pretty shifty as well).
Related posts:
Now Daily Telegraph wades into the leasehold house racket
Sunday Telegraph says ‘New homes, yes, but not leasehold’
Gavin Barwell: ‘No excuse for leasehold houses or punitive ground rents and we will stamp them out’
‘No other law so blatantly allows the wealthiest to rip off those less so,’ says the Sunday Times of leasehold
LKP’s essential leasehold guide in The Sunday Times … feel free to add
Housebuilders ‘pimp their profits’ by selling freeholds, says Financial Times columnist
Following previous postings it now seems another major house builder Persimmon is considered as another company that has really cleaned up building leasehold housing. It also stated the house building sector is attracting ever greater scrutiny from different stakeholders and for different reasons. “Wonder why”.
Taylor Wimpey – Bellway – Redrow and now Persimmons
Justin Madders MP described the selling of Leasehold Housing where Ground Rents can double every 5 or 10 years as scandalous.
chas says further:-
Not at a peppercorn rate i.e. £48 a year, but commencing Ground Rents of £250 a year.
Over the next 60 years the Ground Rent would be:
10 years £1,000
20 years £4,000
30 years £16,000
40 years £64,000
50 years £256,000
60 years £1,024,000
What value for the Freeholder?
What disaster for the leaseholder?
Who would purchase such a property knowing this?
This is another national scandal following on from 1990s where Leasehold Flats were seen as a great way of milking the pensioners who purchased residential flats. Flats on such developments built by McCarthy & Stone (M&S) using Peverel as in-house Managing Agent. M&S and Peverel were forced to part in 1993 after a scandal concerning excessive charges and a failed court case brought about by M&S. Two months later M&S were fined £2,000 for false advertising. In 1993 a management buyout saw Peverel separate from M&S but still remain as Managing Agent, the very company that was responsible for excessive charges.
Peverel now Firstport still continue milking pensioner leaseholders. Scams are still occurring today as government after government, failed to get a grip on companies who repeatedly found more ways of relieve pensioners of their hard earned monies.
There is a very good programme on victoria Derbyshire on leasehold traps. I am trying to post the link, it’s on BBC news and every one who potentially buys needs to see it….
Interesting year is 1993. Do you have the case law reference No. at all ? The LVT was formed in 1993 as was A.R.L.A too.