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Were you mis-advised in relation to the house purchase?
Were you told that you could buy the freehold at a later date without being told it would cost thousands?
Has your ground rent suddenly or unexpectedly increased?
If you answered ‘yes’ to any of the above questions, you could be entitled to bring a compensation claim against the conveyancers and property developers who mis-sold you your leasehold property.
Complete the quick enquiry form and discover how ClaimExperts.co.uk can help you make a leasehold claim.
Any compensation won could be used to buy your freehold.
There are approximately 4 million leasehold properties in England.
Most of these leasehold properties are flats. In recent years however some developers have been selling leasehold houses too.
If you are a leaseholder you do not technically own the property you live in.
You are effectively renting it. Typically for a period often ranging from 99 to 999 years.
As a leaseholder you are obliged to pay ground rent to the landlord every year.
Many homeowners who have bought a new build in the past ten or so years were not told the full implications of purchasing a “leasehold property”, and now find themselves stuck in spiralling ground rents.
Below, we list all of the questions you need to know to find out if you have been affected, and whether or not you can make a claim for compensation.
The land, when you buy a leasehold property, is owned by the freeholder. The freeholder charges the purchaser ground rent, per annum (every year). The leaseholder also needs to get permission from the freeholder should they want to make any changes to the property.
Leasehold properties are a relatively new trend, as traditionally houses have been sold as freehold. This means we are seeing new-build properties caught in the scandal more than older properties.
The main issue is in relation to the ground rent, which is paid by the leasehold owner per annum.
In the past, this ground rent charge was minimal, sometimes as little as £1 a year. However, a growing trend, in an ever increasing squeezed property market, has seen property developers begin to take advantage of this little known clause.
We are now seeing property developers inserting clauses into leasehold contracts, increasing the ground rent from £1 a year, to £200-£400 a year. The clause would then state that this charge would double in price every ten years.
This means that the ground rent could soon spiral into thousands and thousands of pounds, with the Government predicting a family house could have a ground rent of £10,000 by 2060.
Ground rent is the main issue with leasehold properties, but not the only one. Freeholders can be as lenient or demanding as they want with the leaseholder. For example, we have seen cases of clients being charged up to £3,000 to build a garage, and even £100 to merely have a letter answered by the freeholder.
In essence, you are at the freeholder’s mercy when you own a leasehold property, and that can sometimes be a nightmare for many of our clients.
In addition to this, figures show that many of the leaseholders cannot escape this nightmare by selling their home, as once you inform the potential buyer of the leasehold status they are massively put off.
Many lenders, such as Nationwide, simply will not grant mortgages against homes with difficult ground rent clauses. Very often, conveyancers will also warn off prospective buyers.
Leading figures in the property industry are estimating around 100,000 homebuyers are caught in this mis-selling scandal. Nearly all of these are new-build properties.
The short answer is yes, as leaseholders have a legal right under the Leasehold Reform Act 1967 to buy the freehold of their house, providing they meet certain criteria.
However, since the turn of the century, there has been a huge increase in prices for freeholds, which is putting many leasehold property owners off.
ClaimsExperts.co.uk recently received an example of a client who had been told they could buy the freehold when the property was first built for £3,000.
When they realised the issue, they had asked to buy the freehold, a few years later, and it had increased to £40,000.
Figures show that seven out of ten buyers of new-build leasehold homes used the conveyancing solicitors recommend by the new-build developer.
There is a huge conflict of interest here, with the developer potentially knowing that leasehold properties may put potential buyers off.
The main responsibility lies with the conveyancer in question. Many of these conveyancers are being accused of conflict of interest and failing to warn buyers of the potential pitfalls of leasehold properties.
Some of the fault may also lie with the developer. Many developers informed their buyers that their new-builds were “virtual freehold”, something which does not exist in law.
The vital point is, if you believed you were mis-lead or mis-informed when purchasing a leasehold property, the conveyancer and/or the developer may be liable.
The UK Government has been forced to step-in in the wake of the ground rent scandal. It has proposed a ban on the future sale of houses as leasehold, as well as proposals to cut ground rent to zero.
It has held an open consultation which looked at a multitude of measures to ensure property buyers are protected from any mis-selling, in the interest of fairness in the leasehold sector.
It is not yet known to what extent these proposals will be moved forward.
In any event, the proposals do not help those who have already been affected by the scandal.
If you believe you were mis-sold a leasehold property, ClaimsExperts.co.uk can act on your behalf to ensure you receive the compensation you deserve.
Our three simple steps can get you claim off to the best possible start:
We will guide you through the process, step-by-step.
ClaimsExperts.co.uk are experts in relation to claiming for mis-sold leasehold properties.
Among other things, our clients recommend using our expert services because:
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Our goal at ClaimExperts.co.uk is to provide practical and honest assistance mis-sold leasehold properties claims, helping you to claim maximum compensation for what you deserve.