New-build leasehold homes






Recent media attention has focused on several issues surrounding new-build leasehold houses and owners’ concerns.

Among the issues they have raised are crippling increases in ground rent and the cost of obtaining the freehold title to their property. The standard practice among high-profile developers such as Taylor Wimpey, Persimmon and Bovis Homes was to sell new-build houses by granting long leases (usually 125 years or longer) with onerous ground rent review provisions.

These leases contain rent review clauses that are linked to inflation and allow for the ground rent to be increased every 5 or 10 years. Whilst the initial rent reviews provide for small rises, the later ones allow the ground rent payable to the freeholder to increase significantly and run into thousands, if not tens of thousands of pounds.

This practice was commonplace in the North West between 2007-2011 but new-build properties elsewhere in England and Wales have been similarly affected.

As a result, when owners try to sell their homes, they have found that prospective buyers have been unable to obtain a mortgage or that they have had to sell their property at a significant discount.

This problem has been compounded by the fact that the developers have then sold the freeholds once a development has been completed to companies that specialise in acquiring freeholds. These companies charge inflated fees if a property owner wants to acquire the freehold or to extend their lease.

Other common complaints are that the freeholder’s fees for granting permission to a homeowner to extend or alter their property are excessive, and that the freeholder requires surveyor’s fees and admin fees to be paid by the home owner before they even give their consent.

The government has recently signalled its intention to deal with this matter and prohibit such high ground rents and fees. However, it is unclear when, if at all, it will legislate in this area, with Brexit looming large on the government’s agenda.

Should you need expert legal advice regarding the contents of your lease, advice relating to your legal rights to acquire the freehold or a lease extension, or indeed any other property law matters, please contact Paul Westwell at or Martin Blaylock at or telephone 0161 330 6821.

Alternatively, you are welcome to attend one of our free legal surgeries.

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.