Survey on onerous ground rent data. Please fill this in if you have a leasehold house with exploitative ground rent terms
Groundrentsforsale.com probably does not regard itself as dilatory in furthering the interests of freehold investors who feast off ground rents.
Sounding like Dickens’ unappetising Mr Smallweed – “Shake me up, Judy!” – in Bleak House, it says:
“When you draw up your leases you should take the opportunity to enhance the value of your building.
“When you prepare your leases for sale you can choose whatever ground rent increases you like.
“There is no set formula for how much the ground rents should increase by and how often they should increase.”
Then it adds a caution:
“Obviously you have to sell the leases so you don’t want to be aggressive with the increases as this will cause problems selling the leases …”
Its suggests ground rents doubling every 25 years, or increasing every 15 years with RPI or – even better – every 10 years.
“Obviously these are great from an investors’ point of view. These are considered to be amongst the best types of investments to buy and therefore sell for more than most … ”
But these grisly Mr Smallweeds seem to be missing a trick.
Taylor Wimpey sold hundreds, and possibly thousands, of leases with doubled ground rents every ten years in sales between 2007 and 2011. The increments, applicable five times, appear to have been a national policy, although they were dropped in London flats.
The issue will come under scrutiny on Monday, as Pete Redfern, the Taylor Wimpey CEO, meets Sir Peter Bottomley and Jim Fitzpatrick.
The ground rent scandal will also be discussed at the meeting of the All Party Parliamentary Group on leasehold reform on Wednesday December 14.
But Taylor Wimpey is not alone in loading ground rents.
Last week LKP was informed of a new block of 75 flats built by Wates in Stockwell, South London, where ground rents starting at £300 double every 20 years throughout the flat’s 125 year lease.
That’s £19,200 by the end, it is claimed.
Related posts:
Taylor Wimpey delays ground rent scandal ‘review’ to April, and hopes, like Mr Micawber, ‘something will turn up’
Sunday Times reports Taylor Wimpey ground rent scandal, as executives meet leaseholders
Taylor Wimpey CEO says doubling ground rent scandal under ‘review’. But Bottomley asks: ‘Have innocent homebuyers been shafted?’
Pete Redfern: Stop pontificating about the housing crisis and sort out the ground rent scandal of Taylor Wimpey’s own making
Taylor Wimpey to pay £130 million to solve doubling ground rent scandal
Taylor Wimpey CEO to meet MPs over ‘cancer’ of doubling ground rents (which were deterring astute buyers in 2007!)
A ground rent that doubles every 20 years can bought out by the leaseholder down the S42 route for around £6,000.
As a leaseholder myself I don’t believe this scaremongering is justified on 20 year doubling reviews, of course 10 year doubles are horrible however you need to print the true facts and explain to uninformed leaseholders that they can buy out their ground rents for a NPV usually discounted at 7%.
RPI linked reviews can also be bought out via a S42 very easily and cheaply too, I have done it on multiple units and it is oh so simple if you are educated correctly.
If it’s that easy perhaps TW could buy back the freeholds for their unfortunate customers.
Michael, TW have no right to buy back the freeholds as they have been sold.
When you sell your house do you not try and maximise the value of your house at the detriment of someone else who has to buy it?
David T:
I am assuming from your comments that you are a landlord or have a vested interest in there being no change in leasehold law!
Also, you state that a lease can be bought out for £6,000 and you have done so on many units you own?
I am guessing then that they were all under the same terms and conditions and the figure arrived at was based on the ground rents payable now and their future value?
Because if not, then you would know that every lease is valued very differently depending on the terms it was set up on!
Did you know that some leases have increases built into them that occur every 5 years?
Good to know you were educated well by your parents, shame they didn’t include a moral compass at the same time.
Well said David T . I have come on here numerous times to state that the “ground rent issue hysteria” caused here is really a minor issue in leasehold and not a major problem. The leaseholder’s who have had these terrible terms of review placed on them were legally represented and have a come back against the lawyers who represented The problem with this site (LKP) is that it is so one sided against anything leasehold that any minor issue is made into a major news story. I again say that the ground rent doubling issue over 10 years is an issue that needs to be resolved ( and also houses should not be sold leasehold) direct with the solicitors acting on behalf of the purchasers who failed to advise of the danger. RPI rising leases or doubling ever 20 or 25 years are not a problem and do not crate nay issues for the value of the leasehold. I don’t see that any Government time needs to be wasted on this and Government should not interfere with the free market. It is not surprising that the current Labour party say they will ban it. What can one expect from a party led by a leader whose policies in various other areas of housing are nothing short of communism?
Interested , thank you for your comment, good to know there are some educated people out there!
I wonder how many of LKP’s big sponsors and contributors stand to benefit from a government reform on leasehold property, perhaps the main contributors to the LKP will waive their fees to help the leaseholders involved in the ground rent scandal.
I actually think an investigation into professional fees is more fitting!
David, I can assure you that there are lot ofcontributors on here with nothing to gain ( many are not leaseholders).
They give up a lot of their time trying to help those who have genuine complaints about different aspects of leasehold.
Excessive ground, rents, dishonest and rip off management companies, useless trade associations, and an inactive government etc.
Campaign against retirement leasehold exploitation/LKP also give publicity to the good side, those responsible companies who treat leaseholders fairly and to MP’S who are supporting reform.
My main interest is Retirement leasehold, I challenge you to state all is rosy there.
David T
LKP is supported by Peter Bottomley who has achieved nothing in decades of service. No Tory Prime Minister ever thought he was good enough to be a proper minister despite years of Service. Says it all about the man and why he is so keen to get his name into the headlines on leasehold issues. It’s the only hope he has of showing some achievement. So I understand his motivation on this issue. I suppose there are many more with one sided views who want to rush in undemocratic changes regardless of the result as long as they can “hang” the landlords who in their eyes are all evil. It’s a real scam if Government interferes with freely signed leaseholder agreements which are contracts which have been signed by legally represented parties and signed out of free will.
Interested, Are you refering to Sir Peter Bottomley who has been an MP since 1975 and was knighted for his services to the community.
Thank god he did spend his time helping the disadvantaged, and did not waste his time seeking fame.
I would love one of the legal experts to step in here and clarify, but isn’t it true that there is already legislation in place to supersede some of the most ridiculous clauses in older leases?
Interested it is a disappointment you come to this site and repeatedly make comments about other peoples motives when you have not evidence to support your claims.
You are entitled to the view that ground rents is not a problem and are free to say so on this site. Quite how exposing this story is undemocratic is beyond my understanding.
I assume you have some particular interest in things staying as they are, but please have the courtesy of arguing the point not against the person.
“Interested”, or more likely to be accurate: “self-interested”, is very rude about Peter Bottomley, contrasting his dismal failure in public service compared with that galaxy of talent on the front benches during the Blair / Cameron era.
“Interested” doesn’t interest me much, to be frank, but Peter Bottomley has a record of achievement recognised by people of all parties, and none. Leaseholders are very lucky that he is taking on these grisly leasehold game-players.
And question the rationale of nonsense like ground rent. (What is it for, exactly?)
Jim Fitzpatrick is a similar figure of stature on the other side.
These MPs’ interest in party politics is minimal with leasehold, but they think it is important nonetheless.
We thank them both.
David T can I ask you to do the same as Interested. Please feel free to comment on the issues but please be courteous to other posters. If you think some are not as “educated” as you then show it with your level of understanding, rather than by disparaging their views
As for speculating about LKP’s motives, that was just cheap.
This is a terrible situation and I don’t see how it can be described as ‘a minor issue’. It is already impossible for many hardworking people (whose main fault in life is that they have no legal training to enable them to navigate the maize of leasehold law) to buy their starter flat.
Allowing ground rents like this, it means some of those people who did manage to ‘buy’ a flat, will never, in fact own it, and will be exploited for the rest of their life, whilst ‘investors’ freeholders sit back on their fat & useless a**, and enjoy a guaranteed income.
Are we to believe that these commentators have no vested interest? I don’t. As for the ad hominem attack on Peter Bottomley — it is contemptible.
Buying out ground rents may be a simple matter for the leaseholder of a house. It is not necessarily the case for a block of flats. The simplest evidence for this is that books have been published on how to do it, which wouldn’t have been written nor have any buyers if indeed this was a trivial matter. And that’s aside altogether from some of the not so well known ILLEGAL tactics certain freeholders use to frustrate or delay enfranchisements and bypass first refusals. These self-styled “financial engineers” are adept exploiters of UK sponsored tax havens and are, in many cases, MAJOR donors to the Conservative party.
Leasehold has been abolished everywhere that inherited it from English common law except in England and Wales. That wouldn’t have happened if it was fit for purpose. It’s retention in part of the UK speaks to the political power of freeholders, and nothing else.
The Conservatives are now PURPORTEDLY intent on a making the UK a country that works for all, not the privileged few. Leasehold reform will be an obvious test if they are serious. I don’t believe it for a second.
Hi all ,
I mean no offence to anyone, I was simply trying to address the fact that RPI linked ground rents whether reviewed annually , 5 yearly or 10 yearly are relatively simple to buy out via a lease extension, especially if the lease is over 80 years and no marriage value applies.
I am a leaseholder but do have a share of freehold after successfully enfranchising my block which had RPI linked reviews. What I find most concerning about Leasehold Reform is that leaseholders and Freeholders seem to be so disconnected ,
There will never be a happy medium, Freeholders want to maximise their investment value , while Leaseholders want to abolish leasehold, we cant win.
David T extending a lease can be relatively simple but there are also a number of landlords who make it rather complex. The ground rent multiple and the starting level of the ground also have a marked impact on the price for extending the lease formally. Many landlords also seek to very actively encourage leasheolders to take an informal lease extension where there is no reduction in ground rent.
There is no simple solution but one like yours where the leaseholders also own a share of the freehold takes away the fundamental conflict between the third party landlord who owns the freehold for a profit but who has no real interest in the building and the leaseholders who pay the bills and who do have an interest in the building but who often have no control.
Why should there be a situation where a freeholder can maximise their investment value?
Leaseholders should automatically have a share of the freehold.
Why should any group of people be in an abusive position whereby they can exploit leaseholders either because of dodgy lending by some banks, using leaseholders money to pay for the loans or because many centuries ago someone granted sexual favours to a monarch?
Itbis very easy for annonomous people to post rubbish and disrespectful commonts on others without putting their head above the parapet…. I feel sorry for them that they don’t have the balls to put their names to their comments or opinions.
It is very easy for annonomous people to post rubbish and disrespectful comments on others, without putting their head above the parapet…. I feel sorry for them that they don’t have the balls to put their names to their comments or opinions.
As I was saying: Is Britain Coming for the Tax Havens/ (Globalriskinsight.com).
In a word: No.
It will be business as usual for tax-avoiding freeholders.
As I was saying: Is Britain Coming for the Tax Havens/ (Globalriskinsight.com).
http://globalriskinsights.com/2016/12/britain-coming-tax-havens/
In a word: No.
It will be business as usual for tax-avoiding freeholders.
Groundrentsforsale.com Remind me of the pay day loans scandal – exploiting those who are least able to defend themselves. Of course they need to be regulated, the whole feudal concept of leasehold needs to be looked at. How can anyone seriously justify that? And those accusing LKP of profiteering – I mean really chaps, the easiest way to profiteer is to buy freeholder not instigate reform!
LKP is a registered charity.
The profiteers in the leasehold business are the monetising freeholders who leverage their freeholds to extract money from leaseholders over and above ground rent.
The list of scams they engage in is long: they are entitled to insure buildings, so, surprise, some have found ways of collecting commissions of more than 40%. Communal electricity? Kickbacks from the electricity company. And for added climate change and extra profit: more lights, left on 24×7. Free electric bar heaters for the staff if there are any. etc. Can it be plugged in and left on? Do it. It’s all good. Poor staff? Hired as result of not even vetting for people with criminal records? No problem. We own an employment agency for temporary staff and can provide emergency cover at an extortionate rate.
And so on.
No stone is left unturned in the search for, the exploitation of and, very often, the concealment of a profitable conflict of interest. It became so ingrained in the culture of some companies that their own staff started to find ways to cash in.
LKP was set up to help people obtain redress and to provide a way for people to distinguish between the sheep and the goats. Corruption and malpractice are simply RIFE in leasehold. It is a magnet for certain kinds of people.
Samantha Cameron’s half-brother, Viscount William Waldorf Astor IV, e.g., having learned at the knee of Vincent Tchenguiz, probably the worst landlord in the country, has established a fund with £700m borrowed from the Chinese. The firm will extract profits, most of which will go to China, and his share will make him rich (sorry, richer; he was born rich). Rich enough, very likely, to donate a large sum to the Conservatives and to recommend that there be no “red tape” introduced to stop the kinds of activities I’ve described. His father sits in the House of Lords. When they get tired of all that London can offer they repair to Lord Astor’s 19,000 acre estate in Scotland which the Cameron family is said to have found very tranquil. Probably as good a place to sit down with a scotch after a little grouse shooting to review the figures from one’s British Virgin Islands companies as one could find.
In the good, that is less bad, old days leasehold was a feudal inheritance, comparable to sultanism in the Ottoman empire (the Sultan owned all the land, just like the Crown in the UK). Today it is an anachronism that is a global magnet for those chasing that unicorn combination of yield and security. Got some hot money you need to convert into tangible assets? There are scores of professionals in London who would like to meet you. The long term costs to the UK are not their concern. They have private school fees to pay and sojourns in the Bahamas to fund. If you have not seen the map of offshore registered property take a look: http://www.private-eye.co.uk/registry. All of these are owned by people keen to maintain an arm’s length distance from their ownership and control. They have been accommodated by the British establishment which would prefer to have crooks investing in the UK than parking money in Swiss bank accounts, and to be able to follow the masked men through the cartoon door they have drawn (got to fund the trade gap old boy, and, er, school fees).
In the US Donald Trump tapped into anger about the export of jobs to China. In the UK people’s homes are being sold to China and there is little anger, so far, about that. The failure to reform this may (should) lead to some disruptive change of the kind the UK establishment is proud of having avoided. All it may take is a single good data leak from the British Virgin Islands. Is that inevitable? You might think that…
This sort of information needs to be made public. Not many leaseholders posses all the facts, and most of us have only a very basic understanding of the law. In fact I’ve come across several solicitors, who weren’t too sure about things, too many complexities.
We have been having problems with the freeholder since the 90’s – back then Internet was not so widespread and information was hard to find. Researching is much easier now, companies house on line, news articles etc.
It is becoming increasingly difficult for freehoders to exploit freely. Technically only ground rent is a legal revenue source, but everyone knows how much we get exploited with service charges, right?
Interested: Your derogatory references to Sir Peter and the “uneducated” read all too familiar to those of us obliged to have dealings with the unscrupulous freeholders whose sole interest is to defraud leaseholders whenever and wherever the opportunity presents itself.. It is the language of the gutter that is seemingly the preserve of this Rachmanist band of villains.
For your information, I have a collection of Fellowships from the City of London, including such exciting subjects as Mercantile Law and the Law of Contracts. Whilst these days my interest lies in postgraduate research in Modern History and Politics, the old reference books are still on the shelf and not exactly gathering dust.
That said, the following comment of “Interested” is particularly revealing:
“Its a real scam if Government interferes with freely signed leaseholders agreements which are contracts which have been signed by legally represented people and signed out of free will.”
Have you read some of these Contracts? Well I have.. They are especially worded to deceive both leaseholder,and solicitor./surveyor alike.
Ground Rent abuse exists in various forms:
1. New Build. Houses: Leasehold instead of Freehold.
Consequent on the TW affair, LKP, Sir Peter, and Jim Fitzpatrick are getting on top of this and are to be applauded.. There can be no justification for building Houses on a Leasehold basis.
2. The Sale and Purchase of Ground Rent Portfolios built during the 1970/80/90s in criminal contravention of s4 of the LTA 1987 (as amended by the Housing Act 1996).
The Sale & Purchase Contracts exist in the Public Domain, which show the fraudulent methods used by the unscrupulous (both seller and buyer) to criminally complete such transactions without the prior knowledge of qualifying long leaseholders, who are then led unsuspecting into the:
3. “Informal” Lease Extension racket.
In a situation where the individual leaseholder has a statute right to a 90 year extension with no real change in existing lease terms, the calculated luring of gullible and vulnerable leaseholders (and their solicitors/surveyors) into “informal” extension agreements is, along with the illegal,and criminal sale of Ground Rent portfolios as in 2 above,, the major scandal now engulfing this unregulated industry..
LKP/Campaign against retirement leasehold exploitation must bring this whole subject of Ground Rent abuse more widely into the Public Domain, and I hope this can begin today with the All Party meeting at Parliament..
Illegally sold “old” Ground Rent portfolios, as in 2 above, are reversible with the freeholder (buyer) remaining obliged by law to offer like terms to the original disposal to the qualifying leaseholders. This existing legislation should also apply to “informal” extensions.
Ground Rent abuse is part of a huge money making scam and fraud against the gullible and vulnerable,, and one that is on such a scale as demands investigation by the Specialist Fraud Division, CPS.
As I suspect the unscrupulous few are running scared and desperate to keep prying eyes out., I would urge Sebastian, Martin, Sir Peter, and Jim Fitzpatrick et al to keep up the good work for you are clearly getting under a few unscrupulous skins.
I have just come across an example of this on a Solicitors website.
They boast they can maximise the cost of a lease extension.
One of the ways to do this is to check the timescale of the application and if the application forms have been completed accurately by the applicant.
There appears to be no hard and fast rules but just any old excuse to fleece the leaseholder.
Taylor Wimpey is just one of many developers who sell new build flats and houses that double ground rent every 10,15 or 20 years. These developers and their new build sites should be named and advised to lower ground rents to a more affordable RPI increase.
Professional investors have found a lucrative income stream which provides no benefits for the leaseholder. Mr Tulkinghorn would be rubbing his hands with glee at the distress it is causing ordinary homeowners. .
Many Help to Buy properties have these draconian rents which puts taxpayers equity loans at risk. Their calculators do not account for any increase in ground rents which could lead to defaults.
Basically ground rents are a relic of the past and should be abolished and leasehold changed to common hold as is the case in other countries.
” ground rents are a relic of the past and should be abolished and leasehold changed to common hold as is the case in other countries.”
I think we all agree on this point except the freeholders and those who have invested in ground rent extortion, They argued its just like any contract.