Leaseholds to be banned on new build houses

TrickyDicky101

Story here:

http://www.bbc.co.uk/news/business-42439155

No Ground Rent for future (long) leasehold apartments, either.

Doesn't appear to currently address concerns about the existing owners of onerous leases, however.

Comms69

It's quite ridiculous that people still need their hand holding at every stage.

zagubov

Well it's a start. Amsterdam made all leases perpetual. Worth considering here.
Can't see the slightest point in leasehold for residential property.

TrickyDicky101

zagubov wrote: »

Well it's a start. Amsterdam made all leases perpetual. Worth considering here.
Can't see the slightest point in leasehold for residential property.

Do you mean houses (as opposed to flats/apartments)? I agree - houses don't need the collective R&M mechanism that FH/LH imparts (which is a valid reason to have FH/LH IMO).

davidmcn

TrickyDicky101 wrote: »

Do you mean houses (as opposed to flats/apartments)? I agree - houses don't need the collective R&M mechanism that FH/LH imparts (which is a valid reason to have FH/LH IMO).

But other places (e.g. Scotland) manage fine without leasehold.

bowlhead99

Apparently,

Critics described the new measures as "incredibly weak".

Personally I don't view a new measure by the government that restricts the property developer from setting the lease rent schedule at whatever they and the initial leaseholder mutually agree, and instead forces them to set it at £nil per year, as "incredibly weak".

You would certainly be annoyed with those new measures if you were a developer, and the market valuation of all the UK residential property developers has now taken a hit as the new measure has been announced, because they no longer have the ability to sell a new-build property for £x up front plus £y per year, only £z up front, and £z might in practice not be much more than £x.

So, that doesn't seem INCREDIBLY weak?

Back in July, the government proposed a complete ban on the sale of houses as leasehold in England, alongside restrictions on ground rents that could limit them to as low as zero. The rules were out for consultation over two or three months in late summer. Now they have confirmed that people buying new-build houses will not have to enter into a lease agreement and people buying either houses - or flats, where leasehold is more difficult to avoid - will not have to pay ANY ground rent if the lease is more than a couple of decades. So, a nice result for prospective buyers who might have not had the requisite maths skills or market knowledge to understand the true cost or market value of a ground rent clause and might for some reason be doing their own conveyancing without taking professional advice on what the lease terms meant.

There are some special interest groups who have been campaigning for people in existing leasehold property who would like to pay less ground rent, because high ground rent figures or future inflator schedules mean their property is not worth as much as if the ground rent did not exist. So they will think that removing everyone's freedom to create leaseholds with groundrents is not far enough, because it doesn't help their members who already chose to buy a property with groundrent. But at the end of the day, those people with truly onerous leases are a v. small fraction of UK residential property owners. The proposed measure will phase out the problem over time.

You can't just 'ban' existing leases, unless you are going to say, OK the lease is not valid as written, so the occupant no longer has any right to use it, the property and the land now belongs to the freeholder, and the freeholder will return all the initial premium paid and take back possession of the property right now rather than waiting the remaining 90 years for the lease to expire. That's not what the lobby groups want, they want to have their cake and eat it, and not bear any financial burden of buying themselves out of the lease arrangement.

zagubov

TrickyDicky101 wrote: »

Do you mean houses (as opposed to flats/apartments)? I agree - houses don't need the collective R&M mechanism that FH/LH imparts (which is a valid reason to have FH/LH IMO).

It's more of an excuse for FH/LH rather than a valid reason.

Most of the world's countries (including parts of the UK) have apartments without the FH/LH system.

Change is necessary.

TrickyDicky101

davidmcn wrote: »

But other places (e.g. Scotland) manage fine without leasehold.

And I never claimed otherwise. The point I was making was that FH/LH can be used to facilitate the R&M mechanism and this is not unreasonable. There is nothing intrinsically bad about FH/LH - it's in the detail [on some FH/LH structures] where the bad stuff happens.

jbainbridge

It's a start.

But as has been said - it in no way addresses the problems some existing lease holders have. It won't help any of them sleep any easier.

I think some hand holding is now required as many developers have been taking the mick - leaving some buyers thinking it is normal / seeing no alternative.

Comms69

jbainbridge wrote: »

It's a start.

But as has been said - it in no way addresses the problems some existing lease holders have. It won't help any of them sleep any easier.

I think some hand holding is now required as many developers have been taking the mick - leaving some buyers thinking it is normal / seeing no alternative.

Seeing no alternative?


sorry, no.


Stealing food because your child is starving is having no alternative.


Failing to carry out basic research, into the most expensive, voluntary purchase you're ever likely to make is just foolish.

fozziebeartoo

I have read what I could find about this as considering buying a leasehold apartment.....

But cannot find anything about when this MIGHT start.

Has anyone got a clue about timeline? Thank you