Five flats might not amount to a revolution, but it might be an indication of where market sentiment is heading.
If so, Stewart Moxon, founder of Hopton Build, is going to be well ahead of the curve.
He is selling five two-bedroom apartments at Liversedge, near Huddersfield, as commonhold units rather than leasehold.
And the reason he is doing so is because of his own unsatisfactory experiences as an investor in leasehold properties: so he is one of the 94% of dissatisfied leasehold owners who regret their decision to purchase, as identified in the National Association of Estate Agents report last week.
“We were involved a lengthy battle to regain control of a residents’ management company after paying too much on service charges. So when it came to selling these flats, we decided to sell them commonhold, which means the buyers have control of their costs and without having to pay annual ground rents and the other nonsense.”
The apartments are priced between £129,500 and £136,500.
The flats went on sale last week and already one has serious interest.
The unfamiliarity of commonhold is a concern, but Mr Moxon does not reckon it will impact on likely sales.
“Most of our likely buyers will be cash purchasers who are downsizing, for whatever reasons. So they will be older buyers who will understand the concept of commonhold.”
Some mortgage lenders won’t lend on commonhold, although the Leeds, Yorkshire and Nationwide building societies do do so.
The commonhold site of Spire View, in Pickering also in Yorkshire, was organised with commonhold tenure by its New Zealand developer, who went bust along with many other small operators in 2008.
Ironically, it was repossessed by RBS which did not lend on commonhold tenure.
Given that so many mortgage lenders are wary of leasehold trickery – such as doubling ground rents from plc house builders such as Taylor Wimpey – Mr Moxon might find that commonhold is not an issue at all these days.
We wish him the best of luck and urge all other ethical house builders to follow suit.
Related posts:
LKP persuades government to allow commonhold tenure on Help To Buy
CML: Will mortgage lenders lend on commonhold? No. Yes. Maybe … er
Housebuilders WILL benefit from commonhold, Hopton Build developer tells Law Commission
For God’s sake! Now it emerges £8.3 billion Help To Buy scheme – that turned house builder executives into multi-millionaires – is not available on commonhold properties!
Scale of leasehold house scandal revealed in mass email dump to house builder bosses
Neighbour forfeits leaseholder’s £600,000 London maisonette for putting in a new bathroom
Persimmon could not pay £100,000,000 bonus to its CEO if it wasn’t part funded by Government Help to Buy and the leasehold model of monetisation of homes for future income streams.
They don’t even have to pay for remedying building defects such as Grenfell style cladding. Why would big developers voluntarily change such a self serving business model.
The Law Commission knows Leasehold is too difficult to reform. Abolish leasehold is simplest solution.
The Law Commission (and the legal fraternity) is part and parcel of the problem, as is government. They (The Law Commission) have said that leasehold is complex and difficult to reform, these words are self serving and a forewarning that it’s recommendations (to government) will fall short of what is required.
All reforms fall short of what is required. I have been trying to educate myself on how modern day leasehold came about, it has been hard work finding an authoritative account. The best account suggested that it all kicked off in the 1920’s when legislation was enacted to control rents and restrict landlords rights to evict.
Landlord’s profits fell, their saviour was the existence of feudal leasehold laws. Landlords began to lease their properties/land to gain another income flow. It is not difficult to imagine how things developed from that point, developers and builders latched onto leasehold. They began to sell newly built houses on the very same basis.
Fast forward to now, the age of amoral corporate capitalism, and the age of young go getters in sharp suits, pointy shoes, and slicked back hair. Amateurs (provincial landlords) had discovered the ancient treasure, but their use (exploitation) of leasehold had been woeful and weak – 999 year leases and low fixed ground rents. We can do better than that.
And so they did do better than that, with shorter leases, doubling ground rents, creating a whole new freehold industry, etc etc etc.
“Let it be” is a Beatles’ song, it is also the English translation of the French term “laissez faire”. A more sophisticated definition is, “abstention by governments from interfering in the workings of the free market” And that is precisely what successive governments have done over time, abstained. Oh! yes government has intervened from time to time with reforms, but only when intervention and reforms could not be avoided. And all reforms were the minimum required, and all reforms satisfied the sharp suited, pointy shoe brigade, and pacified the masses……….. until the next time.
Let there not be a next time, ABOLISH our domestic leasehold laws now.
My friend attended a meeting at the Dept of Justice on 06/09/2018 in his capacity as a Right to Manage (RTM) Company Director. He was invited by representatives of the Law Commission looking into reforms to current Leasehold legislation. Justin Bates was there which tells you everything.
Information Notice to the Landlord is required once the RTM Company is set up in the usual way. This notice would request details such as:
* scope of the buildings
* service charges
* list of management contracts
* list of management functions
The Law Commission were considering the following timeline.
1. Landlord has 30 days to respond to the information notice .
2. RTM Company has 30 days from the Landlords response to serve the claim notice for RTM
3. landlord has 30 days from the date of the claim notice to serve a Counternotice
4. If after 14 days from receipt of the Counternotice the parties have not agreed the allocation of management functions the RTM Company has to apply for a statutory-approved form of mediation
5. If parties fail to reach agreement within 30 days of the mediation either party would have the right to apply to the Tribunal for a determination
If Justin and his Landlord employers get this legalistic tosh into leasehold law it could deter many from going for RTM and may fall into the hands of dishonest greedy landlords.
Abolition of leasehold is needed not reform.
Why go through all the hard work to reform and try and fix something that shouldn’t exist in the first place. Abolish leasehold and assign it to history where it belongs!
URGENT….URGENT….URGENT
PLEASE, Please, Please complete the Law Commisions survey on lease ENFRANCHISEMENT on line.
Thank you.