The Secretary of state for housing, communities and local government James Brokenshire has written to the Competition and Markets Authority and the Solicitors Regulation Authority in an effort to tackle issues with the leasehold market.
Official figures point to approximately 100,000 tenants trapped in “exploitative and unfair” leasehold arrangements, with home owners suffering a ‘Double Clause’ in the worst cases. This amounts to ground rent automatically doubling every ten years, which would see £300 ground rent rise to £4,800 after 40 years.
With a leasehold, as a leaseholder, you just have the right to use the property. You do not own the land or the property itself. You have a lease to use the property in accordance with the terms of the lease drawn up when the property was built.
When the lease ends, the property returns to the freeholder.
As the term of the lease decreases, the cost of the freehold increases. This means that the sooner you purchase the freehold, the cheaper it will be. The advantages of owning the freehold are several. You will no longer need the freeholder’s consent to carry out building works, you will not be obliged to pay ground rent and you will not be subject to the terms of the lease. Most importantly the value and saleability of your property will be enhanced, as people are far more attracted to a freehold property where they buy the house plus the land upon which it sits.
For these reasons, a high percentage of homebuyers regret having purchased a leasehold property. One of the main reasons, is that a leasehold house can be difficult to sell, especially if it has less than 55 years left to run. Unfortunately, mortgage lenders insist on leasehold properties having at least 55 years plus left on the lease, which means there is difficulty selling your home in the future.
As a firm we specialise in this area of legal work and we have the relevant expertise and systems in place in order to make the purchase of your freehold as hassle free and cost-effective as possible. If you would like any advice or additional information please contact Paula Murphy on 01792 468684 or email enquiries@pgmsolicitors.co.uk.
