The Help To Buy scheme that has hugely boosted plc house builders share prices – and turned the likes of Persimmon’s Jeff Fairburn and David Jenkinson into multimillionaires – is not available for commonhold properties.
This astonishing revelation comes from small house builder (and former leaseholder) Stewart Moxon, of Hopton Build.
He trying to selling five two-bedroom apartments at Liversedge, near Huddersfield, as commonhold units rather than leasehold, which he regards as a widely abused form of residential tenure.
Now he has been told by the Government’s Help To Buy team, which has doled out £8.3 billion, with more to come – that commonhold properties are ineligible under scheme.
Mr Moxon was informed by the Help To Buy team:
“Apologies for the delay in responding to your query. I was waiting for a response from our Legal department who have now come back to me.
“Our Legal team have reviewed this in depth but unfortunately commonhold properties are not eligible under Help to Buy. For qualification for Help to Buy at present the flats can only be leasehold.”
Commonhold was introduced under the 2002 Commonhold and Leasehold Reform Act.
The Law Commission is to launch a consultation into the form of tenure for flats that holds sway in most of the world outside England and Wales.
It also wants to know why commonhold has had limited take-up.
The answer to that is blindingly obvious: developers and the speculators in residential freeholders are making so much money playing the angles of leasehold.
It may well be the case that Persimmon, Taylor Wimpey, Bellway, Bovis, Redrow etc were unaware that Help To Buy was unavailable on commonhold.
After all, why would they bother to inquire into a form of tenure they have absolutely no intention of accepting unless they are forced to?
Still, curious that another, lesser reason, for commonhold not being taken up is that government discourages it, too.
Stewart Moxon tells LKP:
This weekend I have had to turn away 2 potential homeowners because I have had to deny them the Help to Buy facility.
Hard working honest people wanting to get on the property ladder. Meanwhile the government are continuing to support leasehold apartments and the big builders get richer selling freeholds to investors.
It doesn’t make sense to me why commonhold can’t participate.
I would be appreciative if you are able to enquire with Mr Brokenshire or Homes England to clarify if its just an incompetence e.g. been left off a strategy paper or if there is an unsurmountable technical reason it can’t be offered to commonhold.
I am sure that at the highest level there cannot be support for this position.
I await the release of your report tomorrow and am available if you want clarification. Otherwise I am still diaried for the conference call on Wednesday morning as planned.
Here is someone who is delighted with Help To Buy, and helped himself, too, by spreading leasehold houses around the country:
Related posts:
Commonhold is back! House builder offers flats without leasehold tenancies
Housebuilders WILL benefit from commonhold, Hopton Build developer tells Law Commission
LKP praises Law Commission over commonhold in Telegraph
Scale of leasehold house scandal revealed in mass email dump to house builder bosses
Industrial-scale ground rent rip-offs have turned leasehold properties into short-term tenancies, says Maria Eagle
War of attrition continues between Canary Riverside freeholder John Christodoulou and the court-appointed manager …
This is absolutely outrageous. Is this to be the standard stance on all commonhold builds? How can the powers that be get away with such a punatuve ruling, it is a blatant attempt to discourage commonhold tenure which is what’s this countries society deserve. I know of not any other countries citizens that would even consider leasehold tenure to be an acceptable form of housing tenure, they would laugh it off as a joke and I have experienced this when I explained our leasehold laws to friends of mine in both the USa and Holland.
Unbelievable!
Absolutely scandalous that HTB not available on common hold properties. The government giving the green light for further abuse through the archaic leasehold tenure for vulnerable first-time buyers.
Those of us who have for the past 10 years beginning with TTAS then Peverel Action, CARLex, LKP and the brilliant About Firstport have posted that the Governments have been seen during this period, had chance after chance to alter the Leasehold Scandal. The 2002 amendment was ignored by all especially the Labour Government at the time up to 2010.
This must be a total oversight by The Conservative Government who will claim that they took their eye of the ball because of BREXIT.
It is a massive mistake or a calculated gamble, by those who are supposed to be in power and in charge. If this is a government ruling to discourage commonhold tenure then the right time to provide bad news, can be calculated around other bad news, is now so well documented and outdated, like the invisible man, we can all can see right through him.
It is indicative of the change that is coming that Richard Silva of Longharbour (long term custodians of buildings) felt unable (despite agreeing to)to attend the recent APPG meeting where was to be given the opportunity to explain the role his company plays with regard to freeholds.
Financiers that lend funds secured against freehold assets, especially those assets that include future income derived from the ownership of the freeholds need to be aware that when change does come the income value will play no part in valuing any compensation due to freeholders.
Indeed compensation values will be far less then the freeholders have put a valuation on them.
An example might be Charter Quay who enfranchised for under 40% of the initial freeholder valuation?
This is absolutely disgraceful.
I am ashamed that I have supported this government all my working life.
The current regime are so cruel to the ordinary and less well off of society now.
We are regarded as plebs and the gap between the haves and have nots grows daily..
Searching the internet, I can find nothing where it tells me the Help To Buy Scheme cannot be used for a property that is commingled.
Is it actually published anywhere to be easily read/identified
Dammed predictive text, plus read commonhold, not commingled, sorry
Giving the government the benefit of the doubt it probably didn’t know nor care about commonhold. An honest mistake guv.
Brokenshire will do the sensible thing and allow commonhold tenure with HTB immediately. Can’t be that difficult and a piece of positive publicity.
Mind you still waiting for those zero ground rents. This government does not care about the homeowner or consumer only Brexit and vested interests.
Thankfulness to my father who informed me on the topic of this blog, this weblog is really
awesome.
Has anyone thought here to change the Title with the relevant parties agreement once signed on the dotted line?
Context –
Re-advertise as Leasehold, then change to Commonhold. Is this Fraud? Doubtful when you think what has been going on for years within Leasehold. If the Developer agrees to this, then he can alter the Title, notify the Lenders and they can either argue the toss as to the legalities of the Mortgage or report him/her.
The Lender does have a Duty of Care as to ensuring a Good Title so as to be sold on the open market for a fair and reasonable price. This could be a moment for them to step up.
Just a thought