Builder backs down over ‘mis-selling’ on city estate
PERSIMMON Homes has backed down and given away the leasehold for free to dozens of new homes in Cardiff after it was accused of mis-selling properties.
Homeowners at the St Edeyrns Village development in Old St Mellons were offered the deal as part of an outof-court settlement, which means they don’t have to pay the leasehold to their new properties.
The national housebuilder was due to appear in court next month for a seven-week trial over alleged mis-selling to buyers, who claim they were not told the homes were leasehold until it was too late.
The out-of-court settlement means the case, which was being pursued by Cardiff City Council, through Trading Standards, has now been dropped.
Approximately 55 properties on the St Edeyrns estate were sold as leasehold, with a further 1,100 sold as freehold, between 2016-17.
This meant homeowners had to pay ground rent and would be more likely to experience difficulties reselling compared to freehold properties.
For Ashley Bishop, a 25-year-old firsttime buyer, the first time he was told about the leasehold was when “the card machine was brought out” as he put down a deposit to reserve a three-bed semi-detached house in October 2016.
Although he still went ahead and bought the house, he said he was unfairly disadvantaged when it came to resale compared to the identical freehold properties on the estate.
“I was only told about the leasehold when I came to pay the deposit,” said Mr Bishop. “At the point of sale, we were told all the properties on the estate were going to be leasehold, but that was not the case in the end. We asked about buying the freehold,
which they told us would be 25 times the £150 ground rent. It was going to cost around £5,000 plus legal fees just to be on a par with our neighbours, who had the same house on the same estate, but who owned the freehold.”
In a letter to residents, dated August 5, 2019, Persimmon Homes admitted it “could have communicated better or more clearly when you first moved to the St Edeyrns Village”.
The letter, written by Martin Smith, managing director of Persimmon’s East Wales division, added: “As a gesture of goodwill, we have decided to provide all leasehold owners at our St Edeyrns Village with their freehold title, without any cost.”
The company also promised to reimburse any ground rents paid to date.
Dave Holland, on behalf of Cardiff City Council, wrote to St Edeyrns residents the following week saying it would now “not be in the public interest to pursue the matter to trial, given the inherent risks associated with this and the costs which would be incurred”.
Persimmon, which is trying to restore its reputation after a bonus scandal and complaints about workmanship, is now under pressure to scrap all of its leasehold contracts across all of its developments.
Campaigners are arguing that thousands of other buyers making similar claims should receive the same offer without having to take Persimmon to court.
Katie Kendrick, founder of the National Leasehold Campaign, blasted Persimmon for a “damage-limitation exercise” and said she was disappointed the case was not going to court.