Leasehold reform proposals could save homeowners £1,000s - MSE News

[Deleted User] · 14 January 2020 at 4:38PM

GDB2222 wrote: »

Some of these posts seem to be in a remarkably similar style! Somebody is obviously pretty upset about this.

That's because there are thousands and thousands of people now getting hit by endless fees and costs for extending their leases. Read the reports and the evidence - the biggest response to a consultation they ever had!
https://www.parliament.uk/business/committees/committees-a-z/commons-select/housing-communities-and-local-government-committee/inquiries/parliament-2017/leasehold-reform-17-19/publications/

starving_artist · 14 January 2020 at 8:56PM

DRVN1 wrote: »

A freeholder is simply an investor.
An investor expects a return on their investment but all investors are informed and warned at every opportunity, that Investments may go down as well as up.
In fact it is the legal responsibility of those encouraging investment in their products to inform and warn of such.
There is no such legal responsibility apparently Lee on those who undertake a leasehold agreement to be warned or fully informed of exactly what the financial penalties and losses will be. And they will be losses. There is no 'possible' about it.
Freeholders seem unable to accept the standard acceptable principles of investments involving risk.
/QUOTE]

This is a really important point when considering the 'human rights' of the freeholder. I do not see how it can be argued that the freeholder has a protected right to the windfall gains made as a result of house prices being allowed to spiral out of control.

A lot of anger is being expressed here about the leasehold system but the only way to bring about change is to communicate these views through lobbying groups like Leasehold Knowledge Partnership and your MP who can put pressure on Parliament to change the law.

I don't think the Law Commission is the enemy. They carried out consultations and research on all sides and have attempted to take account of the highly conflicted interests involved. Some options have been discarded because they are just being realistic about the arguments against reform which will inevitably be encountered. The Law Commission does not make laws. The government and Parliament do.

GDB2222 · 14 January 2020 at 9:04PM

[quote=[Deleted User];76721427]That's because there are thousands and thousands of people now getting hit by endless fees and costs for extending their leases. Read the reports and the evidence - the biggest response to a consultation they ever had!
https://www.parliament.uk/business/committees/committees-a-z/commons-select/housing-communities-and-local-government-committee/inquiries/parliament-2017/leasehold-reform-17-19/publications/[/QUOTE]

I appreciate that people buy a lease and would like to extend that at nil cost, but it means the freeholder suffers a commensurate loss. There's no money tree to shake, which makes the money appear.

The argument that freeholders are rich people, so ought to be fleeced in this way is a bit odd. Car makers are rich companies, so should they be made to give their cars away? Apple is an incredibly rich company, so should we all get free iphones? Maybe, we should change the political system, but for the time being we seem to be in a capitalist country.

Where people claim not to have understood that they were buying a lease, I am simply flabbergasted. The biggest transaction of their lives, and they claim they did not understand what they were doing? To be frank, I don't believe them. But, if it were true, it's not painting a very flattering picture of themselves, is it?

dnees · 15 January 2020 at 12:14AM

As a landlord freeholder you invest in someone’s home. It cannot be equated with buying a car or phone. I’m not against capitalism at all, but I do think it wrong that we have a law that says it’s ok to invest in someone’s home. To be frank I do not know how freehold landlords sleep at night, their business is to extract as much money possible from hard working people who thought they owned their home.

chris_leaseholder_missold · 15 January 2020 at 12:23AM

What about the people who were told they could only buy their freehold after 2 years but then found out it had been sold to someone else after 3 months? What would you call it if you were expecting to own your freehold at the low cost detailed by the developer but then find out it costs thousands more after its sold on?

Leasehold across England and Wales needs to be scrapped so how do we go about it?

Maybe ban all leasehold from now on and if you want to buy your Freehold then it should be bought back at the price the freeholder paid for it. That way they don't make a loss.... How's that?

Just make it easy to do so we can all get on with living our lives without all this greed and nonsense. :beer:

Tom99 · 15 January 2020 at 5:45AM

I think leaseholders should campaign/lobby MPs etc for what is realistically likely to be implemented.
Calls for leasehold to be banned or compulsory purchase of a landlords interest without appropriate compensation are unrealistic to expect. The things which will make a material difference to the price paid and are within the options set out by the Law Commission are:

1 - Remove marriage value from the calculation.
2 - Introduce online calculator which will fix premium to be paid using a per-determined formula and discount rates.
3 - Ignore ground rent in excess of 0.1% of market value.
4 - Strictly limit freeholders 'valuation/negotiation' costs since the only variable is the value of the new long lease. Maybe fix a cost for this at say £500 then the freeholder can spend whatever they like or even do away with employing a valuer since they will be paying rather then the leaseholder.
5 - Strictly limit legal costs by having a standard deed of variation/lease extension and remove the right of the mortgage co to be involved. It's possible the legal costs could be removed entirely if a standard 'pack' was produced which included Land Reg application forms. Maybe even make the Land Reg part free of fees.

dean1920 · 15 January 2020 at 8:06AM

I bought a flat which was leasehold- don’t think there’s much chance of buying one freehold in England really!! My concerns are the rip off service charges. When I “bought” my flat I knew there was a service charge but I was told by the builder that it would be set at a reasonable amount and that was a main factor in me deciding to buy the flat.Trouble is the builder then sold the freehold to KINGSTON PROPERTY SERVICES who installed themselves as the service provider and the service charge has doubled within seven years . There is no cap on what these clowns charge and they conveniently ignore any complaints.
Some people on here seem to think that this isn’t a problem or it’s our own fault!! Makes my blood boil- bottom line is if I knew or was made aware that these type of companies could do this with no fear of being held to account I would never have bought the flat in the first place.
Every leaseholder should join the NATIONAL LEASEHOLD CAMPAIGN and demand fairer legislation and the same human rights that the Law commission seems to think is so important to freeholders.

Lemony1234 · 15 January 2020 at 8:18AM

No leaseholders will be happy with the report and its recommendations. They dont go far enough to stop this immoral practice or to help current leaseholders get out of the awful situation they are in. There are loopholes being manipulated for profit by developers and these are not being addressed. Developers have taken the government and house/flat buyers for mugs with their dishonesty and hidden costs and are still getting away with this. We cannot sell our leasehold properties do this is stalling the housing market, something the government were trying to help with new schemes such as Help To Buy but developers take advantage with hidden costs, and poor build quality, leaving thousands of homeowners in debt and limbo. This needs to end!!!!

HRH_MUngo · 15 January 2020 at 8:31AM

GDB2222 wrote: »

I appreciate that people buy a lease and would like to extend that at nil cost, but it means the freeholder suffers a commensurate loss. There's no money tree to shake, which makes the money appear.

The argument that freeholders are rich people, so ought to be fleeced in this way is a bit odd. Car makers are rich companies, so should they be made to give their cars away? Apple is an incredibly rich company, so should we all get free iphones? Maybe, we should change the political system, but for the time being we seem to be in a capitalist country.

Where people claim not to have understood that they were buying a lease, I am simply flabbergasted. The biggest transaction of their lives, and they claim they did not understand what they were doing? To be frank, I don't believe them. But, if it were true, it's not painting a very flattering picture of themselves, is it?

My son has a leasehold flat as it is all he could afford. He bought it in 2012. It was built in the 1960s and we gave him the money to extend the lease.

He was disappointed and angry that he didn't 'own' his flat in the same way we own our freehold bungalow, although he accepted he hadn't a lot of choice as it was all he could afford. I cheered him up a bit by pointing out that he could 'sell' the leasehold interest (and profit from it), just like we could sell our freehold bungalow, especially now that he has a lease that lasts until 2140. However, had we not have paid for him to extend the lease, he would have had a depreciating asset with a lease of under 60 years. This would be difficult to sell because it would be unmortgageable.

I do agree that the leasehold system is archaic and should be abolished, although in a large block of flats such as my son lives in, I assume you would still need some sort of management company.

Nlc · 15 January 2020 at 11:57AM

Yes it would still need to be managed but if the Commonhold tenure was used it's the difference of who the management company actually works for.
It's about control and the management company would work for you not a greedy 3rd party freeholder who simply wanted to use your home as an income stream.

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Leasehold reform proposals could save homeowners £1,000s - MSE News

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