Should the Government act NOW to reform leasehold? LEASEHOLD SCANDAL

jmmo20

bids24 said:

My parents always said to never buy a leasehold house. How right they were! It turns you into a mortgage paying tenant. You only own a lease, giving you the right to live in your home for a set amount of years. Your freeholder landlord actually OWNS both your home and the land it stands on. That's not really home ownership, is it? It's a form of mortgage paying rental.
In the UK and Wales, only a very, very, few apartments aren't Leasehold. The freeholds of almost all apartment blocks are owned, not by the residents, but by faceless investment companies, a significant number based abroad or hiding their profits in offshore accounts.
Apartment 'owners' need to be just that - OWNERS. Leasehold tenure needs to be replaced by Commonhold tenure, where appartment owners collectively OWN the freehold  building. It's much fairer and it's the way things work in the world beyond our outdated, exploitative Leasehold system. Scotland abolished Leasehold years ago. It's well past time for England and Wales to follow suit. 
The Government knows this and has promised Leasehold Reform, then sat back for two years and done NOTHING. The need for Leasehold reform is urgent. People are suffering, financially and mentally, as a result of such things as the spiralling cost of buying the freehold of their house, extending their lease or paying spiralling ground rent  and service charges. The CMA has confirmed there has been Leasehold misselling. 
The Law Commission has marked Leasehold as needing reform, with urgency.  
The Government has all the evidence that indicates a desperate need for reform now, leading to eventual abolition of Leasehold. 
It's time to take action. 
 

 

As a Brit born abroad it really shocked me when I moved to the UK and learnt about leaseholds. Where I grew up, flat owners automatically own a share of the common land/building. For example if you buy a flat in a block containing 20 homes, you own 1/20th of the main entrance, the halls, the elevators, stairwells, roof, etc.That comes with obligations too as you "own" a percentage of maintenance obligations which ultimately lead to big pieces of work (e.g. replacing elevator or cleaning the facade comes to mind). Still, much preferable to owning a "tenancy" for 1000 years. LOL ! it's absurd.

SpiderLegs

ftbhopes said:

davidmcn said:

I must have missed the bit where the slaves willingly signed up to a contract after getting independent legal advice.

Yeah...all history lessons and books really downplayed that bit....do you think the legal advice was before they were tied up and piled onto boats in unsanitary conditions or after....many died on those boats so hopefully it was before....

Of course the real tragedy is that those that barely survived those horrific journeys were subsequently served with a demand for ground rent and maintenance charges for the swings that never actually got built. 

daveyjp

Thrugelmir said:

With the HoC not sitting for a while. Must be a backlog of legislation sitting awaiting debate. Not helped by the timing of the General Election last year. 

You also need to follow the money and see who benefits from leasehold arrangements. 
Will those who will lose out from such a significant change to their income stream likely have the ear of Government?  If so it will not happen quickly.

maximaxi7

Leasehold is just life destroying for many people, and simply an excuse to extort money at every opportunity.  Most buyers never had the full implications explained to them during the sales process ( and yes they knew they were buying leasehold) before the trolls jump in. These implications include ridiculously over inflated  lease extensions, permission fees etc etc. In addition to the employment of unscrupulous management companies, who have caused no end of misery for leaseholders. End this antiquated system now, the gravy train needs to be derailed. 

[Deleted User]

maximaxi7 said:

Leasehold is just life destroying for many people, and simply an excuse to extort money at every opportunity.  Most buyers never had the full implications explained to them during the sales process ( and yes they knew they were buying leasehold) before the trolls jump in. These implications include ridiculously over inflated  lease extensions, permission fees etc etc. In addition to the employment of unscrupulous management companies, who have caused no end of misery for leaseholders. End this antiquated system now, the gravy train needs to be derailed. 

There are many problems with leasehold but to say it’s comparable with slavery is offensive. It’s so disappointing to see Katie propagate this comparison.  I’ve been a member of the NLC FB group for a couple of years which I’m now considering leaving. As someone said early, the comparison is both stupid and offensive. 

musti_2

Yes leasehold is feudal system must be banned immediately full stop. We are all innocent and suffering because no one told us these house are leasehold.

NicolaTomlinson

The leasehold system is antiquated and not fit for purpose. There is no good reason not to abolish it. It has been exploited by the large house builders who have mis-sold to their customers by lying and misleading them. They encouraged or gave incentives to solicitors to not explain what leasehold really meant. Leaseholders don't own the property they were led to believe they were buying. They were actually just buying a lease which would allow them to live in a property for the length of the lease. They were untruthful about the cost and procedure for buying the freehold. They often failed to mention the site maintenance fees that would be due annually and that they are unregulated and can consequently go up steeply without warning or redress. Leasehold needs to be abolished. 

NicolaTomlinson

Please sign the National Leasehold Campaign's petition to abolish leasehold. Many thanks. 

IRT1873

princeofpounds said:

Slavery... for heaven's sake. Whilst I actually agree with most of the planned legislative changes, hysteria is not useful.

The fact is that there has been a vast transfer of wealth and powers from freeholders to leaseholders over the 20th Century, as successive governments enacted legislation to push long leasehold tenures ever closer to outright ownership in nature:
- Statutory rights to extension, meaning the landlord could never get their property back unless tenants willed it.
- A statutory process for lease extension that ditched marriage value for leases over 80 years, reduced the importance of it at shorter lengths, and eliminated all ground rent, meaning that landlords do not get fair compensation for those lease extensions.
- Enfranchisement, meaning that landlords can be stripped of their property, with some compensation, at a time not of their choosing.
- Awarding leaseholders more rights to inspect and challenge service charges, and the creation of a new Tribunal system to adjudicate disputes.
Etc...
It has to be one of the biggest redistributions in British history, and yet it never really gets talked about in those terms.

When you pause to think about it, the changes are remarkable. Long leaseholders expect to be treated as 'owners' of the property, despite the fact that all they bought is a very long term tenancy - the clue is in the very name.

I think a lot of leasehold reform has led to a better society, but it's arguable whether the process has been fair to freeholders, at least in economic terms. But they are rich (supposedly) so no-one cares.

And yes, there are still problems around service charge management, covenants and escalating ground rents. But the overall situation is far better than it was even ten years ago.

Thing is, times move on - the next battle will be about rentcharge and covenants in freeholds -  and then councils refusing to adopt housing estates creating an effective two-tier council tax system. And the management of apartment blocks will always be a problem to some extent, because of the age-old agent/principal conflict of interest.

Whilst you are correct in that 'all they bought is a very long term tenancy' this is rarely made clear by the new leaseholders conveyancing solicitor and, more importantly, the purchase price of a leasehold property will barely reflect that lesser status of -'ownership' - you can bet your bottom dollar that identical leasehold flats,  one with a share of FH and an extended 999 year lease and the other having a standard 99 year lease and no FH interest, will be offered for sale at very similar prices!

simondv

Salemicus said:

Leasehold is rare in the US, but it does exist, including in such obscure places as New York and Florida. It also exists in Canada. If you lie about easily-checked things like this, why should we take you seriously on anything else?

It is very rare in the US and certainly not the default for apartment living, more or less confined to Hawaii and Auckland in New Zealand. I am fairly sure apartments are not sold on a long leasehold basis in Canada, I doubt it, probably more like US or Australian strata. Some houses are sold there on a long lease basis. Much of Europe, Scotland, US and Australia use Commonhold type systems for flats. So if you over exaggerate on this why should we take you seriously on anything else ?