Nov 18 – Escaping Leasehold
Over the last few years many people inadvertently bought houses with a leasehold tenure. Too many of these had escalation causes which severely impact the current and future value of the property. It is positive that government has made it clear to builders that this practice is unacceptable and that whilst it will take some time to legislate to close this “opportunity”, they expect firms to cease this practice.
What is still of concern is those out there who acquired their home without knowing and understanding what they were acquiring. For many this is an increasing liability which impacts the value of the house. Some learnt too late in the transaction so felt that they were so committed contractually and financially so they had no choice but to complete, others had no idea until after completion and got their first “invoice”.
In both cases they have been let down badly but who should shoulder the blame. Certainly the builder is complicit in offering this tenure option and more so for those selling it on based on its future value. There is an element who might challenge the valuation but for me the issue sits with the solicitor or conveyancer.
The latest housing minister appears to share my view that the solicitor acting should have exercised greater care on behalf of their purchasing client and that the builder may have to deliver some respite to make the financials equitable. It must be hoped that James Brokenshire is able to get the CMA to set aside these contracts as unfair, but if not ensures that new contracts are written which are fair. It makes advice from the broker over a good conveyancer more important and it is good that the broker is not seen as at fault in this debacle which further tarnishes our market.
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