Home buyers warned of leasehold risk on new-builds
POTENTIAL home owners are being warned of the risks of leasehold new-builds.
Councillors from Winsford and Middlewich have had reports from multiple residents of their being held to ransom over the cost of buying freehold in newly built homes.
Residents have been initially advised that buying the freehold is not necessary on a leasehold home, and that simply paying the ground rent on the home would be sufficient.
Unknowingly, the freehold on the houses are then sold on to other developers, and the home owners are uninformed on the matter until they wish to buy it themselves.
This means that ground rents can be increased at the discretion of the new buyer and can often leave the homeowner unable to afford the new price as they are way above what was initially agreed.
The problem then persists, as homeowners deciding to buy the freehold are offered at a considerable higher rate.
This is a growing problem, as there are 3,500 homes set to be built in Winsford and 1,950 homes in Middlewich by 2030 as part of Cheshire East Council’s local plan.
Gina Lewis, Winsford Town Councillor, said: “The problem is that it is only stated in the small print that the freehold can be bought to begin with and a lot of people are missing that information.
“A particular constituent of mine was first offered a lease at £6,000, not so long after when they decided they wanted to buy it, it was offered at £10,000.”
Jonathan Parry, Middlewich Town Councillor, said: “At the end of the day they are buying it to make a profit, it is a total con and it is all about cash in the bank for them.
“There is not a lot anyone can do in that situation, but the government are aware of it and the more people than complain the more likely the legislation might change.”
The housing white paper sets out the government’s seeks to address plans to reform the housing market.
It states: “We will consult on a range of measures to tackle all unfair and unreasonable abuses of leasehold.”
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