Graham Balchin, of solicitors Carter Lemon Camerons says: “It is a requirement of most lenders [see the CML Handbook section 5.14.9] that the lender is informed of any increase in the ground rent that may materially affect the value of the property.
“If the conveyancing solicitor fails to warn the purchaser, and any lender providing a mortgage secured on the property, that the lease terms may adversely affect the value of the leasehold property, they may be liable in negligence.”
The Guardian says that many young buyers are encouraged by developers to use solicitors for conveyancing recommended by them, who then fail to warn the buyer of the onerous ground rent clauses.
The newspaper reports Sir Peter Bottomley asking Taylor Wimpey whether there is “any reason to sell a new house leasehold except to put the new owner at a disadvantage”.
It notes that Taylor Wimpey CEO Pete Redfern has indicated that the company is “undertaking a review” into ground rent clauses, particularly those on properties sold between 2007 and 2011.
The newspaper reports LKP’s finding that nearly £2bn of new-build leasehold houses were sold in England and Wales last year.