This leasehold scam

[Graemsay]

There's an article about this over at The Guardian.

https://www.theguardian.com/money/2017/jul/29/leas...

Ground rents that double every ten years? There's really no justification for that, other than greed.

[Matt p]

loafer123 said:

To be fair, some of the larger ones announced some time ago that they wouldn't do this anymore and launched schemes to sort out the issue.

This measure is presumably to stop less scrupulous developers doing the same.

I did read about the £130m fund set up by Taylor Wimpey to move doubling ground rents to RPI based ones. Persimmon, Redrow and Bellway have been pretty quiet about it all.

[The Mad Monk]

Matt p said:

loafer123 said:

To be fair, some of the larger ones announced some time ago that they wouldn't do this anymore and launched schemes to sort out the issue.

This measure is presumably to stop less scrupulous developers doing the same.

I did read about the £130m fund set up by Taylor Wimpey to move doubling ground rents to RPI based ones. Persimmon, Redrow and Bellway have been pretty quiet about it all.

How about if we all either:-

1. Refused to buy houses that weren't freehold

and/or

2. Got our solicitors to vet all contracts and advise us on those contracts that contained unfair terms or conditions. We would then refuse to enter into any contacts which were unfair.

[Randy Winkman]

The Mad Monk said:

Matt p said:

loafer123 said:

To be fair, some of the larger ones announced some time ago that they wouldn't do this anymore and launched schemes to sort out the issue.

This measure is presumably to stop less scrupulous developers doing the same.

I did read about the £130m fund set up by Taylor Wimpey to move doubling ground rents to RPI based ones. Persimmon, Redrow and Bellway have been pretty quiet about it all.

How about if we all either:-

1. Refused to buy houses that weren't freehold

and/or

2. Got our solicitors to vet all contracts and advise us on those contracts that contained unfair terms or conditions. We would then refuse to enter into any contacts which were unfair.

But haven't we been (possibly still are) in a period of high demand and rising prices where buyers are a bit desperate to get on the "ladder" and have to take what they can get or risk missing out? Individuals cant just "refuse" to pay without risking ending up in a worse position as things move away from them.

[fido]

Discussing it on LBC now. Lots of people ringing in who didn't check the details of the leasehold. It's mentally conflicting when you have to agree with James Leftie O'Brien.

[Gareth79]

Would the doubling of ground rents be something that a solicitor would specifically highlight to a buyer as being of potential concern? I'd expect that in the many cases the buyer would be "Oh well, it's £150 now and I'm going to move within ten years anyway, and even then it will only be £300 a year" and that would be it.

[Matt p]

Gareth79 said:

Would the doubling of ground rents be something that a solicitor would specifically highlight to a buyer as being of potential concern? I'd expect that in the many cases the buyer would be "Oh well, it's £150 now and I'm going to move within ten years anyway, and even then it will only be £300 a year" and that would be it.

You'd like to think so however the solicitors acting on behalf of the estate agents posted my lease and with two areas to sign and post back. At this point I was £2k in the hole with fees etc. I think this is where people feel it's a little cheeky. Mine is £300 start then doubles every 25 years. TBH I thought it be out of it in 5 years and move up the ladder however due to the greater scrutiny on leasehold now I could well be stuck with it and on top of that loose money big time once the 80 year term is triggered.

[hairykrishna]

Randy Winkman said:

But haven't we been (possibly still are) in a period of high demand and rising prices where buyers are a bit desperate to get on the "ladder" and have to take what they can get or risk missing out? Individuals cant just "refuse" to pay without risking ending up in a worse position as things move away from them.

This seems to be the case. There's a pool of buyers desperate to move into a new build, right now, who will accept a slightly rubbish deal to do so. I think it's also a reason why a change in the law on leaseholds is pointless. It's just a convenient way to rinse the desperate - if it's taken away unscrupulous developers will just find another way.

[sideways sid]

This is obviously going to turn into the next wave of claims to compensate consumer stupidity.

The same people who:
Paid £10 for three years 'insurance' for a £15 toaster at Argos, and/or
Choose 'free' insurance with their three-year £30 per month contract for a £200 phone and/or
Happily accepted 2% lower APR on their credit card in exchange for 50p cost per £100 purchase value of PPI

Have now realised that they bought the single most expensive thing they will ever own without reading the lease.

In the case of new build, it is almost comical that some spent longer choosing the colour of toilet roll holders than reading the document governing their duties and liabilities for the next 999 years!

The PPI claims companies must have exhausted that line of business now, and are gleefully preparing their databases to send out text messages saying "did you buy a home before 2016..."

[Randy Winkman]

hairykrishna said:

Randy Winkman said:

But haven't we been (possibly still are) in a period of high demand and rising prices where buyers are a bit desperate to get on the "ladder" and have to take what they can get or risk missing out? Individuals cant just "refuse" to pay without risking ending up in a worse position as things move away from them.

This seems to be the case. There's a pool of buyers desperate to move into a new build, right now, who will accept a slightly rubbish deal to do so. I think it's also a reason why a change in the law on leaseholds is pointless. It's just a convenient way to rinse the desperate - if it's taken away unscrupulous developers will just find another way.

I agree that they will try to find another way. But I think that more visible up-front costs are easier to justify than delayed/hidden ones where people (to some extent) rely on lawyers.