A ripe candidate for the mis-selling investigation by the Competition and Markets Authority, perhaps?
Today’s article in the Daily Mail features a couple in Berkshire who bought a £300,000 flat with £500pa ground rent who have now discovered that it is unsellable.
The Competition and Markets Authority launched an investigation into the mis-selling of leasehold homes earlier this month, and LKP has urged the home buyers to report their case.
Are you in a similar situation? Email firstname.lastname@example.org Kim Healy and Craig Gibson were desperate to move into their new home before the birth of their first child. The young couple from Binfield, Berkshire, had planned to move from their two-bedroom flat to a three-bedroom house on the same new-build estate as Kim’s mother, so she could help with childcare following the birth in August.
Mortgage lenders are shunning homes where ground rents exceed 0.1 per cent of the sale price.
Inevitably, first-time buyers Kim Healey and Craig Gibson, used Shanly Homes’s recommended solicitors to purchase this turkey.
It does not appear that the solicitors warned the buyers that the ground rents might affect the future value of their property.
The couple were also assisted by the Help To Buy scheme, so wider taxpayers have a stake in this flawed purchase.
Kim and Craig asked Shanly Homes, which still owns the freehold to their two-bedroom flat in Binfield, to vary the lease to reduce ground rents from £500pa to £300pa.
But Shanly Homes wanted more than £7,000 to do so plus £1,250 in legal expenses.
These legal expenses evaporated once the Daily Mail journalist began investigating the case.
Removing them was a “gesture of goodwill”, Shanly Homes said.
Sebastian O’Kelly, director of the Leasehold Knowledge Partnership, told the Daily Mail:
“Who knows what appalling smoke and mirrors lie behind Shanly’s calculation to reduce the ground rent?
“It drew up the leasehold contract, recommended the solicitor, and that solicitor did not spot the trap in the terms and conditions.
“The company is exploiting this couple’s circumstances. The power to compensate them is in Shanly’s hands, yet its response is to charge them more than £7,000.”
A spokesperson for Shanly is quoted by the paper saying: “We are transparent about ground rents at the point of purchase.
“Where customers have signed leases and subsequently wish to alter terms, we take a flexible approach and a fee is calculated based on the loss to the freeholder. We are regularly in discussion with large-scale lenders to ensure we are taking a fair approach.”
Find out more about Shanly Homes, an award winning regional housebuilder operating across London and the South East.