Anyone thinking of buying a new build home in Cannock, Lichfield or across Staffordshire should pay close attention to whether the property is being sold as freehold or leasehold. This follows recent revelations that some developers have begun to sell houses on a leasehold basis and then claim ongoing ground rent payments, often running into thousands of pounds.
Julie Tomasik, director and residential property lawyer at Ansons Solicitors, explains how a good conveyancer can help you to spot a ground rent liability before it is too late.
Ground rent is charged when you take a lease of a property, rather than buying it outright. It is common when buying a flat but has recently become an issue when buying certain houses. It is designed to compensate the person who owns the land on which the property is built, because when you buy a leasehold you only buy the rights to the building not the land on which it sits.
Where ground rent charges are high enough, they can generate a lot of money. This is something many developers have cottoned on to, which is why they have begun to sell properties as leasehold rather than freehold.
“The difficulty is that some ground rent clauses have been hidden in the small print so they are not always obvious, and as the amount you have to pay can increase significantly over time it can result in a huge financial burden and create difficulties if you want to sell the property on,” says Julie.
Thousands of homebuyers have already fallen into the ground rent trap, and coverage in the press has resulted in a national outcry. The government has said that it intends to prevent newbuild homes being sold as leasehold in the future and to reduce the amount of ground rent that can be charged on flats. In response to this announcement, some developers have begun to voluntarily reduce the amount of ground rent charged. However, they can only do this where they still own the freehold, which may not always be the case.
“Buyer beware is the moral of the story,” says Julie Tomasik. “At Ansons Solicitors, we will make sure that you know what you are getting into before signing on the dotted line.”
An experienced conveyancer will check all the documents and raise queries with the seller about ongoing liabilities and burdens. If they come across anything that looks unfair, they will advise you on what it could mean for you in the long run.
If you are thinking of buying a house or buying a flat, our conveyancing experts will advise you every step of the way and make sure there are no nasty surprises that affect your investment. Contact Julie Tomasik today on 01543 267 988 or email firstname.lastname@example.org
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