At long last! June 23rd, 2021, saw major UK homebuilder, Persimmon plc, reduce the price they been charging owners of leasehold houses to buy their own freehold. The price, or premium, for doing so is now a flat £2000, which Persimmon refer to as “a discounted price”.
This extended scheme will apply to any house leases sold on or after 1 January 2000, and will continue until 31 December 2026.
How does the scheme work?
The premium was previously a fixed fee of £3,750 – which is 25x the annual ground rent.
What’s more those people who have already paid a higher premium to buy their own freehold can now apply directly to Persimmon Homes and will be refunded the £1,750 they paid over the new £2K price.
See bottom of this post for details of how to apply for your refund
The concession has been described as the first formal commitment to eradicating unfair ground rents.
Our specialist 5 strong leasehold team (who deal with nothing but lease extension, freehold purchase and the right to manage) have helped numerous clients buy their freehold from Persimmon. Freehold purchase is not something that many conveyancing solicitors come across – but by instructing us, you can be sure that you have got experienced specialists on your site.
Got a question about Buying the Freehold of your Persimmon Leasehold House? Call our expert team on FREEPHONE 0800 1404544 for FREE initial phone advice – with no strings attached.
Buying my Persimmon Freehold – are there any other costs?
Previously in addition to paying the premium, you were required to pay both your own solicitor’s costs and the legal cost of Persimmon.
However the new concession from the house builders means you no longer have to pay for their legal costs. They cover those fees. So, in addition to the £2 K the only other additional cost you will need to be paid are those of your own solicitor. And you do need a solicitor help you. This is not simply a question of filling in an application form.
Specialist Freehold Purchase solicitors? Don’t just take our word for it!
2. We are the only solicitors recommended for freehold purchase work by the HomeOwners Alliance– the U.K.’s leading organisation representing the nation’s homeowners
And if you’re thinking of instructing another solicitor, before you do so, ask how many enfranchisement and lease extension cases they handled in the last year. We deal with up to 500, year in year out. And also ask them how many clients they have helped with buying freehold from Persimmon.
The freehold house scandal – the history
Normally houses are sold on a freehold basis.
Persimmon continued with the sale of new build leasehold houses until as late as 2017 (and continued doing so in what they referred to as “exceptional cases”). Many people, including us, felt that there was little justification for selling these houses as leasehold rather than freehold –and Persimmon would then charge a premium at a later stage if anyone wanted to buy their freehold.
And as a result of considerable pressure, in 2017 Persimmon introduced its own “Right to Buy” scheme under which leaseholders of freehold houses built by the developer could purchase their freehold– at what was described by them as “below market value”.
Needless to say this became incredibly controversial. And it led to an investigation into this practice by Persimmon and other major house builders by the Competition and Markets Authority (or CMA). And that investigation led to the latest concession. Following this latest move, the CMA have confirmed that they are no longer looking at Persimmon.
Is this the end of the leasehold house and ground rent scandal?
Almost certainly not. The CMA has warned major British builders they should now review their approach to freehold and leasehold sales in light of the new move, stating:
“Our work isn’t done. We now expect other housing developers and investors to follow the lead of Aviva and Persimmon. If not, they can expect to face legal action”.
What’s the difference between freehold and leasehold?
In simple terms, if you own a freehold property, you own both the building and the land. This is the most significant way to own property – the ‘freehold title’. In general terms there are few, if any, restrictions on your use of the property – you can broadly use it as you see fit. A freehold property can be bought and sold as well as inherited. And with freehold, ownership never simply runs out.
In contrast, if you own leasehold property, you only have the right to use or live in the property in question for a given length of time. And this is often conditional upon the payment of rent or the way in which the property is used for example
In England and Wales, the vast majority of houses are freehold, and flats are leasehold. (There is a third system of ownership called commonhold which is in regular use in Scotland. However despite having been introduced in England and Wales in 1993, less than 20 commonholds have yet been set up).
Click here to read more about Commonhold ownership
Owners of leasehold flats can band together with the owners of other flat owners in the block to buy the freehold together in a process known as freehold or leasehold enfranchisement. Similarly the owners of leasehold houses have the right to buy the freehold. And as with the owners of leasehold flats, that right to buy comes at a cost – known as a “premium”.
Click here to read more about the differences between freehold and leasehold
What have Persimmon said about the change?
Commenting on the new premium price, Dean Finch, Group Chief Executive said
“We are committed to putting our customers first and have voluntarily agreed to extend this existing support to provide further certainty and reassurance.”
Today’s agreement further demonstrates Persimmon’s determination to operate with integrity as we continue to build a business with a long-term, responsible and sustainable future. “
Do we believe them? Whilst we have no beef in principle with developers, large or small, it is noticeable that Persimmon only made this change after a formal investigation by the CMA. And what’s more, just days after Persimmon signed the Leasehold Pledge in March 2019, we had experience, when acting for over 90 leaseholders of a large London block of flats built by Persimmon, that their words meant little – as they attempted to put numerous barriers in the way of our clients in buying the freehold.
(The Leasehold Pledge was a government-backed pledge under which developers and freeholders committed to undertake concrete steps to help leaseholders wanting to buy the freehold of their block.)
NB The CMA has confirmed that this concession offered by Persimmon has been provided voluntarily and without any admission of wrongdoing.
Persimmon freehold purchase refund – how to claim yours
Persimmon has established a dedicated national Freephone helpline number (0800 915 6722) which leaseholders can call for more information. Alternatively, further information can be found at: www.persimmonhomes.com/leasehold.
N.B. We have checked directly with Persimmon who told us that the refund is in respect of the premium only – any legal fees you paid to them previously will not be refunded.
What about the CMA investigation into other developers?
The enforcement action by the CMA with regard to the 3 other developers (Barratt Developments, Countryside Properties and Taylor Wimpey) has not yet been concluded. The CMA continue to investigate both Countryside and Taylor Wimpey for using potentially unfair contract terms, and Barratt over the possible mis-selling of leasehold houses.
Click here to read more about enfranchisement – freehold purchase of a leasehold house
Looking To Buy your Persimmon Freehold? Our Specialist Enfranchisement Solicitors Can Help
• Call our expert team today on (01722) 422300 or FREEPHONE 0800 1404544, or
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