Buyers on a Northampton housing estate could face soaring ground rent fees because of 'toxic' leasehold deals, campaigner fears
The firm behind a major housing development in Northampton is selling leaseholds on properties even though a major lender is now refusing to grant mortgages for such deals.
Persimmon Homes started accepting offers for its Harlestone Manor development back in 2015.
But the houses off the Harlestone Road were sold as a controversial leasehold instead of the traditional freehold.
Such deals mean home buyers do not actually own the ground the property sits on once purchased, leaving the developer free to sell on the freehold to outside investors.
Those investors can then increase the ground rent by as much as double the amount - leaving the property difficult to sell.
Last week, the latest twist in what is being called the "ground rent scandal" saw building society Nationwide refuse to lend money for new-build leasehold properties with "onerous terms" in what many have seen as a major step in clamping down on the deals.
Trustee of the Leasehold Knowledge Partnership, Sebastian O'Kelly, has been campaigning for an end to what he calls "toxic" leasehold arrangements - and says Persimmon now needs to offer people who bought houses at Harlestone Manor reasonable terms to buy out their freeholds.
He said: "Persimmon really needs to think about its social responsibility here.
"There really could be a whole generation of young first-time buyers here who will not enjoy the same freedoms as those with a freehold."
Chantelle Denny moved into her leasehold Persimmon Homes property on the Harlestone Manor estate two years ago and says many there were not aware of the implications when mortgaging the properties.
She also revealed Harlestone Manor residents are even considering starting up a crowdfunding bid to buy out the freeholds on their homes - rather than risk seeing their ground rent soar over the next few years.
David Wilson Homes, which also built on the Harlestone Manor estate, sold homes as a freehold.
It's a real concern here," Mrs Denny said. "We weren't given any advice when we moved in here.
"We didn't really understand the implications of taking out a leasehold. it was only when a neighbour set up a Facebook group about it hat we started to take notice."
The issue of leaseholds is even likely to form part of the major parties' manifestos when they are released next week, it is understood.
On April 25, Conservative MP Sir Peter Bottomley tabled an early day motion in the House of Commons calling on Taylor Wimpey, Persimmon, Bellway and Adriatic Land to “restore all affected leaseholders to a position of fair, affordable enjoyment of their home by assistance to own that freehold." and by "cancelling unaffordable ground rent terms."
Mr O'Kelly said Persimmon has been a "consistent offender" in the leasehold market and marked Northampton out as a "hotspot" for such deals.
However yesterday Duncan Shaw, the director in charge for Persimmon Homes Midlands, said that no properties at the company's new Lime Tree Gardens development in Kingsthorpe will be sold as leasehold.
He said: “Persimmon, together with many UK developers, sells a mixture of both leasehold and freehold properties.
“Properties at our Harlestone Manor development were sold as leasehold, with just two homes left for sale as the site reaches completion.
“The properties at our Lime Tree Gardens development are freehold.”