There is an interesting article on the BBC News Website today regarding the purchase of leasehold homes.
It confirms as we have known for some time that many people are in a perilous financial position as a consequence of not understanding, through no fault of their own, the effects of buying their properties on long leases.
Amongst other things:
- It will lead to a payment of significant ground rent, and there have been clauses inserted in some leases to the effect that that ground rent doubles every ten years, or shorter.
- Depending on the terms of the lease, it will lead to restrictions on the ability to carry out works on the property, such as carrying out extensions
- It may lead to mortgage companies not lending against these properties, which means that people having lived in these properties and seeking to sell them will by and large find great difficulty in doing so.
There is real potential for someone to be placed at significant financial disadvantage as a result. Legal advice should have been given at the outset about the consequences of buying a property on a long lease. If a solicitor was engaged in the purchase and the appropriate legal advice was not given, legal action may be taken against the adviser to compensate the purchaser for any financial loss suffered.