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Leasehold trap: watchdog investigates if homebuyers are treated unfairly

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Competition and Markets Authority to look at mis-selling and potentially unfair contracts

https://www.theguardian.com/money/2019/jun/11/watchdog-investigates-leasehold-trap-for-uk-homebuyers


 

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UK homeowners at risk of falling into the so-called “leasehold trap” could benefit from a new official investigation into potential misleading practices and unfair terms.

The Competition and Markets Authority (CMA) said its inquiry into the leasehold market – the latest in a line of investigations – would look at whether consumers were being treated fairly.

There are about 4.2m residential leasehold properties in England, of which about 2.9m are flats, and the government has already announced a crackdown on the sector to tackle a range of abuses. In late 2017 the government confirmed it was putting a stop to the sale of new leasehold houses in England, and a consultation on other measures ended in November 2018.

The CMA said its investigation would look at two key areas. One was potential mis-selling, focusing on whether people who had bought a leasehold property were given the information they needed to fully understand what they were taking on – for example, on their rights around buying their freehold.

The other area of concern was potentially unfair contract terms, and whether these were resulting in people being charged excessive fees. During the last few years cases have emerged where buyers have discovered that their ground rent doubled every 10 or 15 years. In 2016 the Guardian revealed the case of a Birmingham flat owner who discovered that her ground rent was not £250 a year, as she had thought, but £8,000 a year, and would keep doubling so that in 95 years it would be £8m.


 

 

 

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https://www.bbc.co.uk/news/business-48597203

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Ian Rice is convinced he was treated unfairly: "It was a new build and the sales rep said that as the ground rent was just £250 a year there wasn't much point buying the freehold."

But when the Liverpool-based builder decided to add an extension, he got a shock. "We discovered there were all sorts of covenants on the lease contract.

"We would have to pay permission fees to build an extension, or even to just paint our front door."

He is is angry about being mis-sold the lease and the fact that the developers have now sold on the freehold and the new owners have doubled the cost of Ian buying it.

"It's going to cost me more than £20,000 to buy the freehold and pay associated legal costs," he said.

the fact that he is a builder you would think he would check what the leasehold contained

 

this country has become a joke. The thick and reckless get to make bad decisions and get bailed out all the time

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Leasehold is a total money making scam, operated by the builders.

However .... any solicitor -inc. the one the housebuilder will conveniently provide for you will be red flagging it.

Leasehold is fine on the wierd and woolly places - like ye olde land etc etc.

Leasehold o new build is a scam.

 

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15 minutes ago, hurlerontheditch said:

https://www.bbc.co.uk/news/business-48597203

the fact that he is a builder you would think he would check what the leasehold contained

 

this country has become a joke. The thick and reckless get to make bad decisions and get bailed out all the time

 

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23 minutes ago, spyguy said:

Leasehold is a total money making scam, operated by the builders.

However .... any solicitor -inc. the one the housebuilder will conveniently provide for you will be red flagging it.

Leasehold is fine on the wierd and woolly places - like ye olde land etc etc.

Leasehold o new build is a scam.

 

It's hard to believe such an archaic feudal system could exist in 21st century Britain, hence people fall foul of it all the time. They must be gutted when they find out the house they thought they bought with all that money they borrowed isn't actually theirs.

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2 hours ago, Captain Kirk said:

It's hard to believe such an archaic feudal system could exist in 21st century Britain, hence people fall foul of it all the time. They must be gutted when they find out the house they thought they bought with all that money they borrowed isn't actually theirs.

It sortof depends.

In this  case:

https://www.chroniclelive.co.uk/news/north-east-news/stunning-houses-newcastles-most-beautiful-13851443

having  leasehold is well idnerstood - at least to any sane person. Youve land owened by  feudal estate where theyve built nice houses.

And they are not 500k houses when theyve less than 100 years on a leashold ffs

https://www.chroniclelive.co.uk/news/property-news/see-inside-beautiful-home-street-13867141

And a look at prices show they were going for sensible prices in the mid 90s.

https://houseprices.io/?q=+St+Thomas+Crescent%2c+Newcastle

Then the idiots start bidding them up, whilst running into a leasehold brickwall.

In the case of newbuild then No, there shold npt be leasehold.

 

 

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