Articles From the Team
Leasehold Property Crackdown
The government have announced that they plan to tackle the growing number of sales in relation to leasehold houses in radical reforms to the housing market. With the aim to deliver a fairer and transparent system for the homebuyer the plans see the Communities Secretary Sajid Javid set out plans to ban new build houses being sold as leaseholds. With the number of leaseholds rapidly growing the government is taking crucial action to make future leaseholds fairer.
Leaseholds are usually used to manage properties that share a single space and have shared facilities. For example in a block of flats collective responsibility exists for the upkeep of such things as lifts and other communal areas. There are some instances in which houses are sold on leasehold and this generally occurs when it is through shared ownership.
What we have begun to see however is a trend in the sale of leasehold flats and houses to individual home owners without the collective responsibility that comes with shared facilities. Leasehold will more often than not be presented to a homebuyer as a cheaper option than buying the freehold. But as you will see this short term save can untimely cost you in the future, with the discount reflecting additional long term costs that the leaseholder will face. These include: paying an increasing and continuing ground rent; paying potential fees for permissions to make alterations to a property or covenants in a lease; and the financial impact of extending the lease or buying the freehold from the developer after moving in. (http://bit.ly/2tWdO1G).
This often results in the homebuyer having to pay out thousands of pounds in order to make simple changes to their homes. In recent examples, one homeowner was charged £1500 by a property company to make a small alteration to their home. Another family became the victims when they were subject to an astonishing rise in ground rent which is set to reach £10,000 by the year 2060. With the ever increasing outlay families have to go through and rise in the number of leasehold sales, the government has stepped in with the aim to provide new protection to families that struggle to get on the housing ladder in the first place.
What do you think about the radical proposal made by the government to protect homeowners from being exploited through leasehold sales?