MailOnline features a couple who bought a £150,000 house off Taylor Wimpey who were promised the freehold at ten times the £295 annual ground rent.
But now the price has soared and Andrea, 35, and Roi Millward, 30, at Speakman Gardens, Prescot, Merseyside, cannot afford the freehold.
Evidence provided by MailOnline indicates an error may have been made. A hand written form completed by Taylor Wimpey salesmen says the “ground rent, leasehold period & charges if applicable” changes every 250 years.
In fact, the ground rent has the usual terms of doubling every ten years on five occasions after purchase.
Now ground rents have doubled for the first time to £590, the freehold is out of their reach.
Couple can’t buy the freehold on their new £150,000 house
EXCL: Andrea and Roi Millward say they were told annual rent would be £295 They were told they could buy freehold at ten times this rent in first ten years Couple believed value would change in 250 years so freehold would be £2,950 But neighbour revealed rent would double – and now they can’t afford freehold Taylor Wimpey says it is trying to help customers with a ten-year doubling clause A family claim the ground rent on their new £150,000 house has doubled without warning – leaving them unable to buy the freehold they thought they could afford.
All the speculators in Adriatic Land hide their beneficial ownership behind nominee directors of the Sanne Group, headquartered in Jersey.
The conveyancing was done by law firm Bannister Preston.
The Millwards discovered after a Land Registry check that their land was sold to Adriatic Land in November 2012, just over a year after they moved in.
Andrea tells MailOnline: “I do feel quite angry with the salespeople. If we’d have known about all this then we wouldn’t have bought it. As a first-time buyer you trust them though.”
“Taylor Wimpey should have explained in black and white and told us the ground could be sold from under our feet. We had their help-to-buy scheme too, they have reeled us in with that as well.
But Mrs Millward believed the reservation document stating the £295 ground rent would be unchanged for 250 years is proof that she was misled.
The article is unusual in reproducing the documents to support its narrative.
There are other points of interest.
The Conveyancing Association is committing itself to support for commonhold as an alternative to leasehold.
Beth Rudolph, its spokesman, tells MailOnline:
“We would like the Government, for instance, to embrace Commonhold where there is no financial incentive, no diminishing term on a lease and all services can be provided with no escalating ground rents.”
The HomeOwners’ Alliance suggest a case against the conveyancing solicitors in this case, but if the errors of the Taylor Wimpey sales staff are substantiated, there may be a claim against the developer.
Sebastian O’Kelly, Leasehold Knowledge Partnership trustee, is quoted saying:
“There is overwhelming evidence that buyers of leasehold houses were informed by developers that they could buy the freehold at a moderate price after the statutory two years of occupancy.
“Again and again, the developers have then promptly sold the freeholds on to anonymous investors who hide their beneficial ownership behind nominee directors. Some of these owners are offshore in tax havens.
“When the owners learn that the freehold has been sold – there is no obligation on the part of the developer to inform them – they then find that the price of the freehold is prohibitive.
“A freehold that might have been sold by the developer to the leaseholder for, say, £7,000, has leapt to a price of £35,000.
“This is a total scam perpetrated on their customers by plc housebuilders.
“It is appalling that taxpayers have also been conned: we all subsidise first time buyers’ mortgages through the Help To Buy scheme, only to find that developers cheat the buyers.
“People are trying to buy homes, which developers have turned into a highly complex investment asset class benefiting murky and secretive individuals.”
Related posts:
Adriatic Land now wants £54,000 for my freehold that Taylor Wimpey said would cost £6,000
MP urges Commons to condemn developers selling leasehold houses with onerous ground rents. And names Taylor Wimpey, Persimmon, Bellway and Adriatic Land …
Marie Rimmer MP: how can a modest Taylor Wimpey leasehold house in St Helens pay out £185,850 to freehold investors over 60 years?
E&J Capital Partners ‘compelled’ to sell freehold to Taylor Wimpey house to pensioner for £38,000 (plus £4,000 costs)
Dear Gavin Barwell … our Taylor Wimpey leasehold house means my pension will be eroded
BetterRetirementHousing.com reports retirement resale disasters. On BBCR4 MoneyBox today
The CMA (Competition and Markets Authority) previously known as Fair Trading Authority should be asked to declare the the ground rent in leasehold houses to be an unfair contract term.
The only leasehold houses allowed to be sold are are those with 999 years lease at peppercorn ground rent.
Leasehold should not exist at all, not even those with 999 year leases and peppercorn rents. All houses should be sold FREEHOLD, and all apartments sold common hold with ONLY common holders having an interest in the FREEHOLD..
Ollie,
you write “The only leasehold houses allowed to be sold are those with 999 years lease at peppercorn ground rent”. Is that recent legislation?
I have been out of the loop for 3 years due to illness, so would be interested in that point, Could you clarify please?
Abolish Leasehold – no exceptions. How can anyone possibly justify this means of revenue in 2017.
This is a situation where the bubble had not burst and as such no-one was really aware as to the imolications would probably be the real reason as to where, why and how it has gone unckecked for so long.
Now with all the adverse publicity aimed at both Developers and Managing Agents, joe public is now involved. By keeping this toxic issue in the public domain will at least allow Leaseholders the chance to start asking questions about either the system or for themselves.
Consenting Connivance under criminal law should be put flat on the table to be debated with perhaps the loss of their Directorships based on automatic Forfeiture to also include a loss of income.
It’s a shame that the recent hurricaine in the BVI did not scatter all those dodgy notes in to the air..
Why have Key Features Documenta never ever been enforced within this industry? It beggars belief that there is more consumer protection for a retail purchase of a Currys or Argos radio purchase that may last 12 months for £25.00 than there is a for a major purchase of a home for life!
Successive Governements have avoided this saga for years but now it is coming home to roost…
There is knowhere for these unscrupulous investment companies to hide…. It is game up!
Time to sort all this mess out or spend years upon years upon inraveling it all…
The initial paperwork is date on Aug 2011 so I assume completion was towards the end of 2011
Therefore they should make the claim against their solicitor as they are just within the six year period
Stephen,
It is clear from your many comments that you support leasehold.
Except in exceptional circumstances there is no need for leasehold houses, other than greed.
The bottom line is that if these disgraceful builders/developers had not fiddled through such horrendous onerous leases in the first place no one would have to be doing anything but trying to bring up a family and working their hearts out.
Yes, many solicitors are out of order but the whole problem stems from the people who had these leases drawn up.
When enquiring about a house purchase every one should be given full details in basic understandable English re lease etc.
Why have to get to a solicitor stage, and well into a purchase before details of a lease comes out (or NOT in many cases.
Trevor, I challenged Stephen about his slanted contributions on another leasehold related story, he denied having a vested interest in leasehold. I remain suspicious of him.
You are right by the way the bucks stops with the builders/developers, they are the ones who started the whole scam by selling house/apartments on onerous leasehold terms.. But solicitors, surveyors, and any other profession who have conspired in the whole sorry business should not get off scot free.
This couple are just in time to lodge a negligence claim, that is the only point I am making in my post
The importance of the deadline is essential and the article makes no mention of this which I find surprising
Again I make the point that if the NPV (Net Present Value) of the ground rent was shown alongside the premium paid for the lease when the lease was granted this problem would never have arisen. What I am suggesting is very easy and quick to implement and solves the problem of this ever happening in the future.
The problem Stephen, is that you want to keep leasehold, but modified to what you see as “acceptable”.
The only thing that is acceptable is, except in extenuating circumstances, new build houses should be freehold.
Flats/apartments are a different issue re multi occupancy etc, and they should be common hold
Perhaps one of the issues to be further tabled then is to make a small tick list with the 1st Q. “Do you have a copy of the Lease to hand”. If not then walk away before becoming trapped.
David, Trevor
I think there are two legitimate main activities on the LKP website:
1. to work for change in the law through ‘Leasehold Knowledge’, and
2. to help people work through the existing legal system as best they can – the immediate problem for each struggling lessee.
I have read a number of Stephen’s posts and see them as contributing to the second category. I wouldn’t see the two approaches being at odds. We all want the same thing – Justice. Do we not?
Sussex lessee sounds more like a lessor with a vested interest in keeping the game of fleece the leaseholder going. Both Sussex L and Stephen miss the point. Leasehold has been a great act of deception perpetutated on the English speaking people and it is time to consign it to the bin of historical mistakes and compensate those leaseholders who have been ripped off as a result of an unjust system rooted in a patronising and feudal mentality.
True justice is nothing less than the abolition of leasehold, and a recognition by Parliament that it has allowed the myth to be perpetrated that leasehold is a form of home ownership when in reality it is a long term tenancy. It is time to end the myth and stop tinkering at the edges. It is time for the government and Parliament to be bold, brave and courageous and act decisively: abolish leasehold and liberate all 4million plus leaseholders from being fleeced and treated as second class citizens.
You state
” leasehold is a form of home ownership when in reality it is a long term tenancy”
This is correct almost all sales particulars state that the property is leasehold and will give the number of years.
To purchase a property and then argue that the property having X numbers of years left is exploitative and unfair and that restitution to 999 years is the only answer is unreasonable . The price paid for the lease reflected the remaining years and that it was leasehold. If restitution to 999 years or freehold is to be given then compensation has to be paid. We live in an advanced economy and contracts can be and should be expected to be relied upon.
I am not for one moment condoning 10 year doublers or abusive premiums for alterations
The root of all these arguments seems stems from ground rent terms not being valued as part of the consideration payable and premiums for consent being exploitive . These are matters that can be readily addressed
Those who feel that in blocks of flats that the management is not adequate can envoke at little cost an RTM
Yes indeed Stephen
However, I believe that if commercial enterprises are included then !easeholders cannot ” envoke at a little cost an RTM”. ?
However, should Leaseholders envoke an RTM most will sadly opt to appoint a Managing Agent and as a result will in ALL probability be landed with a thoroughly unscrupulous agent who takes advantage of the leaseholders naivety and in some cases utter gormlessness.
It puzzles me how Managing Agents that have been junked by leaseholders, castigated by Tribunal Judges , ordered to repay leaseholders hundreds of thousands of pounds for overcharging …. etc etc HOW can these same Individuals subsequently be appointed Receiver Managers by the FTT formerly known as the ‘LVT’?
Leaseholders are being thoroughly let down by the Tribunal process. They are having discredited agents foisted upon them.
I ask, how are these individuals with their shocking history of ‘ mismanagement’ even considered by Property Tribunals to be appropriate appointees?
It is a question I shall be asking The Rt Hon Sajid Javid MP in my ‘paper on ” VETTING OF PROSPECTIVE RECEIVER MANAGING AGENTS appointees ‘
PROPER INVESTIGATION IS REQUIRED!
Stephen, Anything can be defended by those with the inclination to so defend, it is the inclination that is critical. But the people with the inclination have first taken a position and then collected arguments to support their position. Now those with a vested interest in leasehold are an example, these people do not look at the rights and wrongs of leasehold because it is not in their interests to do so. They immediately assume a position to defend leasehold at all costs and, as I have said already, collect arguments to support their position. An intelligent, but flawed, guy like you knows fully that to achieve an equitable and correct answer to any issue means approaching it without bias. To do so means looking at the arguments before assuming a position – not the other way around.
If I haven’t already made it apparent (with this post and others), I will do so now, your contributions in LKP forums are not only unhelpful, they are deeply suspicious. .
I would like to think that the observations I make are thought provoking.
If you feel challenged by what I write and you reflect further on your argument, whether you agree with me or not, if it strengthens your argument, or see it now from a different angle, then I would aver that it is a positive outcome.
Stephen,
We bought knowing our flat was leasehold with just 63 yrs remaining in 1999. We could not extend lease for 2yrs but didn’t as this was not considered to be an issue at the time. Several neighbours did extend for £2,000 ( yrs remaining the same well below 80 yrs ) NOW it is going to cost over £20,000 and rising yr on yr but we were never told this at the time of purchase. Ground rent is just £20 yr
Yes if you feel the management is not adequate you can go RTM. We did but why was our management not adequate? As you say contracts should be relied upon. Our contract is with our freeholder ( NOT THE MANAGING AGENT! ) to maintain the property we live in. THEY DID NOT! So we complain but to who? As expressed in previous posts pointless exercise and tribunals etc: equally useless and expensive.
We did RTM and manage ourselves BUT I would rather not. IF I could trust a managing agent to do the work we have done at reasonable cost and therefore be able to get on with MY life again I would willingly do so.
Real change MUST come!!.
Real change is all houses sold freehold and all apartments sold common hold with, of course, only apartment owners having an interest in the freehold. And with the legislation making this law, a retrospective element GIFTING existing leaseholders the freehold.
But don’t count on it just yet, powerful and rich vested interests have the ear of government. And even the impartial(?) chairman of LEASE, Roger Southam, is doing all he can to prevent leasehold being consigned to history.
Sussex lessee,
you say “we all want the same thing”. That is incorrect as Stephen for one wants to keep leasehold (modified/mathematically)
The vast majority want leasehold banned, that is what this site is fighting for so anyone who starts suggesting leasehold can be fixed is wasting their time.
We all know that it is not fixable, it has just been getting worse and worse, onerous leases instigated by greedy disgraceful builders/developers, and, if only for the sake of our younger generation, it must be stopped.
Many of us are, and will be prepared to lose everything, if it means we can stop leasehold being passed on to future generations.
If it is not stopped young people will end up with zilch assets after paying thousands for leasehold properties
David McArthur says
SEPTEMBER 12, 2017 AT 1:07 PM
Real change is all houses sold freehold and all apartments sold common hold with, of course, only apartment owners having an interest in the freehold. And with the legislation making this law, a retrospective element GIFTING existing leaseholders the freehold.
Why should the freehold be gifted this would not be fair on those lessees who paid to extend their leases . It would also not be fair on an honest investor who buys the freehold for value in return for the income.
In an advanced economy such as ours we cannot deprive someone of an asset without adequate compensation
Imagine the uproar if a tenant of a flat on an assured short-hold tenancy who had been resident for say 15 years was gifted the flat in return for his years of paying a market rent leaving the owner of the flat with a debt and no asset
Stephen, your posts are not remotely challenging (your other reply to my post), they are above all things immensely and intensely irritating, and juvenile. Yes juvenile, kinda sixth form debating society level.
This will be the last time I communicate with you, try your hardest to comprehend – I am not an all knowing God, nor the final arbiter on what is right and what is wrong. Having said that, I am still prepared to say this, and say it without qualification: Leasehold is a morally criminal scam, all right thinking people would agree with that view. Having established that matter of fact, there is only one way to go, abolition of leasehold. Now, if it is recognised that leasehold is wrong now, it must have been wrong yesterday, therefore there has to be remedial action for those from the past who have suffered from the leasehold scam, that is why I talk of retrospective legislation.
The precise nature of this remedial action is open to detail but I say without (again) qualification there must be remedial action for those past victims of this scam. I am not even going to address your grief for lessees who may have extended (or even bought their freehold).. I am not going to address it because your grief is false. I care even less to address your point about “honest investors”.
Have a nice day. By the way, how does your garden grow?
Dear Stephen,
“Honest investor who buys the Freehold for value in return for the Income”
Yer avin a larf ain’t ya ??
I must say , I so adore an Agent Provocateur! Je adore the lingerie too…….
That’s enough ed!
Personally I would ban any & all opportunities to make an income out of anothers Dwelling.
Scotland has led the way as to the abolition of Leasehold therefore why can’t England. The right to raise a family with Quiet Enjoyment is a Human Right. How is it that this has been ignored?
This is also part of the overall renting market problem in that those who have Buy to Let are beholden to either the Freeholder and /or Managing Agent as to Costs/Charges. Those who rent are paying an inflated price, so that the owner can deflect the cost. This is like a pecking order.
The Freeholder charges whatevwer, this is billed to the Leaseholder who then passes that Debt on to the Tenant as part of their rent. It’s a vicious circle.
Part of the overall charges problem is the additional Charge as placed by the new Freeholder/Managing Agent which inturn increases the Costs of the property insofar that the Lessee pays for the additional Charge plus all the other colourful ones too.
It is no win plus fee for the Lessee.