As a result of Help to Buy, many builders began selling houses on a lease basis when traditionally houses had always been outright owned. Over time, this became a contentious issue in which the Government felt the need to intervene.

Some of the country’s homebuilders have been pointed the finger at for putting profits before their social conscience, when they realize they need to build homes for families to whom shareholders also have to answer.

Land Banking

The media had made it publicly known that there was a situation with the land bank.

Land Banking is a real estate investment scheme that involves the purchase of large blocks of undeveloped land in order to sell the land at a profit when it has been approved for development.

Thanks to consolidation, some builders have inherited land in their organizations that is leased.

It is debatable that they offer both leasehold and freehold properties for sale so that buyers can make an informed decision.

What about the people?

Many people had felt that the market had skewed too much toward leasing when the amount of profit builders had made on leasing came to light.

Things came to a head when the chief executive of one of the UK’s most prominent builders received a bonus of over £100m. At the time, this was one of the largest bonuses paid in corporate history.

Some rental homeowners were surprised when they were quoted thousands of dollars in fees when they applied for permission to make modifications to their homes.

Commissions were collected by their Leasing Management Companies.

Some of the annual ground rents would double every ten years and homeowners could find it more difficult to sell their home in the future once these increases have been implemented.

in parliament

After notifying their MPs and having the issue debated in Parliament, the Government agreed that if you were buying a house (not a flat or apartment) then it is reasonable for you to own the property.

What can you do?

If you find yourself in the situation of owning one of these houses and didn’t know if it was a lease, then you should have reported it. If you believe that the attorney acting on your behalf did not provide you with all of the information about the lease you signed, you should contact them again immediately to investigate why.

You can contact the freehold owner at any time if you are interested in buying the freehold from them.

In addition to leases, there is the issue of service charges.

When City Councils grant permission for Home Builders to build on the land, they do not always agree to adopt the common areas as

• grass border

• Roads

That means that the maintenance of these areas must be outsourced, usually to a private company. Owners in the area then make a financial contribution to this maintenance work in addition to their council tax, this can happen whether the house is leased or vacant.

Service charges

Service charge costs may increase. Sometimes area residents come together to form an association that allows them to choose a different service provider.

If you are considering purchasing a leasehold property, take the advice of your Lawyer regarding leasing.

It’s easy to get carried away with the excitement of buying a home, but you also need to realize that it’s a major investment decision that you need to think about carefully.