First-time buyers hit by charges

Oct 7 2008 by Johnathon Menzies, Perthshire Advertiser Tuesday

FIRST-TIME home buyers have reacted angrily after being told to cough up extra cash for factoring fees.

Just weeks before receiving the keys to their new homes, letters were sent out to prospective residents of the 18 new Perthshire Housing Association flats on Bridge of Earn’s Elm Court development, advising them of the extra water and road maintenance charges.

The PA understands that the new properties, situated off Kintillo road, will not come under the compass of Scottish Water, or have the same road maintenance provision as the majority of PHA’s other 14000 properties.

A spokesperson for PHA said that the applicants were given as much notice of the changes as was possible in the circumstances.

She explained: “The shared equity scheme is a low cost home ownership scheme that allows purchase of a 60-80 per cent share of a flat.

“As is often the case in flats, owners will pay a factoring charge for the services they receive.

“We were recently advised that owners of the Bridge of Earn properties will be responsible for the access road and part of the drainage system, adding £1.36 per week to the estimated factoring charge.

“We immediately made this information available to prospective purchasers and advised them to seek advice from their solicitor and lender, as it is important that they know the full financial position before committing themselves to buying a flat,” she said,

But local mortgage lender, Bill Peacock, who is acting on behalf of three of the PHA’s Elm Road applicants, has criticised the timing of the letters’ arrival – stating this new information could “seriously affect” the sell-on value of the accommodation.

He told the PA: “The people applying for these properties are going to have to make a huge decision as to whether or not they carry on down this process.

“It must be stressed that these are first-time buyers.

“Why should these 31 people have to go through the whole process of getting a mortgage, including paying the survey costs, for the PHA to lob this hand grenade in at the last minute?

“It’s not about how much these extra charges are going to cost, it’s that the lack of cover from Scottish Water – and any future problems with the access road maintenance – could seriously affect any sell-on value for the occupiers.

“It just seems that some of the most vulnerable people have been let down,” he said.

The Bridge of Earn flats are due to be sold on to first-time buyers and other qualifying applicants under the PHA’s shared equity scheme.

Elm Court applicants seeking further information can contact the Perthshire Housing Association on 01738 441 088.