The wider media have taken up the story of the Elan Homes leaseholder whose freehold doubled in price to £15,900 four months after being sold to ground rent speculators Landmark Investments
Ian Rice’s case was reported by LKP on April 18, but this week it appeared in both the Liverpool Echo and the Mirror.
Ian and Deborah Rice inquired about buying the freehold to their £270,000 leasehold house at Borromeo Close in Liverpool in September last year. The ground rent is £250pa linked to RPI every ten years and the lease length is 999 years.
Elan Homes told them that the price would be £7,500.
This price has been confirmed to Sebastian O’Kelly, director of the Leasehold Knowledge Partnership, by Elan Homes CEO John Kendrick: it represents 30-times annual ground rent of £250.
However, Elan Homes sold the freehold on to ground rent speculators Landmark Investments in December 2018, after which the price leapt to £15,900.
That is 63 times the annual ground rent.
Builder ‘will have to pay £23k to buy dream house he thought he already owned’
A builder who thought he had bought his “dream home” says he will have to pay more than £20,000 to buy the the freehold. Ian Rice, from Liverpool, thought he owned the home on the Aigburth Grange estate after moving in two years ago.
In the press reports, there appears to be some effort by Landmark Investments CEO Mark Hawthorn / Hawthornthwaite (he uses both names in his enterprises) to question whether Elan Homes did offer Mr Rice his freehold for £7,500.
It is a curiosity of the leasehold scandal that the house builders and the speculators in residential freeholds cannot get their story straight about freehold values.
So, Persimmon and Bellway were telling the Communities Select Committee that the difference in price between a freehold house and a leasehold one at around £250,000 would be a matter of a few thousand pounds. Indeed, rather less than Elan Homes’s £7,500.
This in itself is disproved by Persimmon hitting reverse gear after the leasehold scandal broke at Harrow View West.
Here freehold houses are selling at £50,000 less than identical leasehold ones flogged off to unfortunate Persimmon customers earlier in the build.
Persimmon sold leasehold houses for £50,000 more than same-size freehold houses at Harrow View West
Freehold speculators on the other hand have created a shaky edifice of valuation models to establish prices for their freeholds. Reforming these in being addressed by the Law Commission, although the ultimate decisions on how to establish fair enfranchisement models will be taken by our elected politicians.
Builder faced with £23k bill to buy the ‘dream house’ he thought was his
A Liverpool builder has told the ECHO that he will have to pay over £20,000 to buy the freehold of a house that he thought he owned. Tempted by an attractive sales brochure Ian Rice bought the ‘dream home’ in Borromeo Close on the Aigburth Grange estate. He moved in two years ago.
Related posts:
Freehold for Elan Homes leasehold house doubles in price to £15,900 four months after being sold to Landmark Investments
Leasehold debate on BBCR2 Jeremy Vine Show
Leasehold houses have been sold for more than freehold ones, reports Telegraph
Gleeson tells ground rent speculator Landmark Investments to remove testimonial
Private Eye reports Peverel price-fixing scandal
Lord Best: You wanted to hear what homeowners think about property management, so here is 22,000 words!
My Freeholder MB Freeholds employs Landmark as an Agent, with Director Mark Hawthorn or Mark Hawthornweight. The only contact for MB Freeholds is a Post Office Number.
Our Landlord is Flatlaunch Ltd who use Estates & Management (e&m) as an Agent and Firstport Retirement is a Brand Name for Firstport Property Services Ltd. Wow, how difficult the set up is adding to the confusion.
On the 25/06/2019 my Ground Rent Doubles from £48 to £96. The Lease was first signed on the 25/11/1985 and the date for charging Ground Rent is given as 25/04/1986 and for the first 33 years until 25/06/2019.
A flat first purchased on 31/12/1987 some 23 months after the lease was first signed and 20 months after the date to begin the payments for Ground Rent was added. E&M send out Ground Rent Demands for a period beginning 25/04/1986 to cover the two month period up to 24/06/1986. and e&m claimed we owe this money. I asked for them to confirm this in writing, they claimed they are not obliged too.
So the first 33 years becomes 31 years, with no entitlement for the proportion we are entitled to according to the lease. It seems developer can create a lease and dates assigned, then adds date for 6 months in the future which becomes the Ground Rents commencement date and the first of 33 years begins even though the development has not started.
So all those leaseholders who have purchased a leasehold House or Flat, may find their year terms started 2 or more years before they purchased so if the Ground Rent doubled every 10 years the first period can be less than 8 years, another Leasehold Scam.