94% of new build owners regret their purchase
07 September 2018
By Nick Perman
A poll of new build owners with leases who bought in the last 10 years show that an overwhelming majority regret buying their property. This is mainly down to leasehold issues, as 45% said they were unaware of the leasehold status.
How could they be unaware they were buying a leasehold property? Perhaps expectation that buying a house meant buying freehold? Perhaps because 78% bought directly from a developer and 65% used the solicitor recommended by the developer had an impact? It’s hard to say how so many people could be unaware of a huge financial issue when buying their home, and it’s clearly a problem.
We reported on issues with leaseholds and new builds last year, when it became apparent that freehold to some properties had been sold to companies who then were doubling service charges and tripling fees for things like grass cutting.
However, the issue goes beyond extravagant service charges to paying in order to make changes to your own home. For some interviewed in the recent poll, the owner of their freehold asked for sums in the hundreds (sometimes thousands) for permission to change their front doors, put down new flooring or get double glazing installed.
Finding your property is leasehold and having no way to buy the freehold, especially in the face of growing service charges, means that selling is going to be a problem. Of those asked, 25% said they had potential buyers lose interest upon finding the property was leasehold.
It’s clear that some sort of reform and standard practice is needed when it comes to new builds and freehold ownership. Whether that’s making it easier to buy the freehold, more transparency from developers, an ombudsman scheme to access, or reassessing the concept of freehold and leasehold entirely, remains to be seen.
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Caveman Swing on 19/08/2019