LKP is urging sites where the freehold owner is the John Lewis Partnership Pensions Trust to demand their leases be varied to RPI … before the Trust sells them.
The trustees, who have met LKP and our MP patrons, is eager to disembarrass itself of the freehold assets, which are managed by E&M, part of the Tchenguiz interests that are ultimately owned by the Tchenguiz Family Trust in the British Virgin Islands.
At Catina Court in Leighton Buzzard, Bedfordshire, the freehold owning entity is Fairhatch GR Limited. Other sites, such as in Dudley in the West Midlands, are owned by JLPPT Holdco 5 Limited, which is also a vehicle of the John Lewis Partnerships Pension Trust.
John Lewis Partnership Pensions Trust tells leaseholder it will ‘disinvest’ in doubling ground rents
The local Conservative MP is Andrew Selous, who has been vocal on the ground rent scandal
Leasehold houses are the ‘spivvy idea of a financial director to make more money on wet Thursday afternoon’, says MP
The directors of Fairhatch Limited are Tchenguiz property executives, including CEO Kenneth William Procter, who is named in the Panama Papers in his own right, Paul Hallam and Christopher Charles McGill.
Procter William Kenneth
Panama Papers Officer: Procter William Kenneth
The lease terms at Catina Court, where properties sell for just under £200,000, are: £250, doubling every ten years on five occasions after the initial term.
As a consequence, they would not be eligible for mortgages from many lenders including the Nationwide.
Taylor Wimpey has informed purchasers of resales that they are not eligible for its “Ground Rent Review Assistance Scheme”.
Similar issues facing John Lewis Trust Pension Fund leaseholders apply to those of E&J Capital Partners, which also appears to be excluding resales from any settlement of the scandal.
E&J Capital Partners in full retreat over rapacious ground rent terms
And with one fell swoop (government legislation) all of these issues will be resolved?
I do appreciate that there are live issues like this one, but 1/ Ground rents of £250 are not peppercorn as it is suggested they should be. 2/ To claim (rightly) that doubling ground rents are outrageous, and then suggest RPI instead, is legitimising ground rent increases as well as legitimising ground rent itself.
Justin Madders MP asked developers “What is ground rent for”? He said that not one single developer could provide a satisfactory answer. He went on to say that it seems ground rent is there for no reason “other than to provide an additional cash cow for the builder and a revenue stream for the freeholder”. Leasehold should not exist, ground rent should not exist, (and one for Kim) managing agents should be filleted and disembowelled in front of a baying crowd at Wembley Stadium the first Saturday in December (Twickers if that is your preference), the proceedings broadcast on live TV in the “Strictly Come Dancing” Slot.. I can’t help but feel that LKP is not being bold enough.
Gee thanks David!! You have redeemed yourself.
Twickers for me!
Ground rent is deferred consideration and is part of the overall price paid for the property.
What has gone so badly wrong, which I put in my replies to the government consultation is that the Net Present Value of the Rent should be shown next to the premium paid so the purchaser is full aware of the commitment to the rent and if they feel it is unfair then it can be challenged before purchasing. The government to set from time to time the discount rate to be used to value the rent
So if I want to sell a flat worth £300k for £50k but retain a ground rent of £8000 linked to the RPI I could do so, provided the NPV of the ground rent is clearly shown next to the £50,000 premium.
That type of deal may be of interest to certain types of buyer and provided it is disclosed and appreciated by the purchasing party before entering into the lease I fail to see why such deals cannot continue
Taken to its extremes and disregarding some of the legalities, Stephen’s scenario wouldn’t seem to be much different to/from offering the use of the £300,000 property for £500 down and £1200 /month rent with upward only rent increases as agreed.
There are apparently people who find this arrangement acceptable, or have no alternative if they wish to keep ‘off the streets’. I don’t detect much enthusiasm on here to abolish this practice.
In an earlier post I ‘ wondered’ how many of the contributors agitating
for leasehold reform were buy to let landlords. Other than ‘Kim’ reporting that 4 out of 7 flats? in ‘her’ block, including her own ,were not occupied by the leaseholder, no response. Do I assume that the remaining contributors are all btl. landlords concerned that the explosive rate of increase in the value of their investment may be levelling off, or that the question is irrelevant and as’ Kim’ suggested all issues of rented accommodation could be settled by ‘ market forces’. Just why the same market forces do not control leasehold matters is not clear to me.
Somebody suggested earlier that I might be a freeholder. Yes I own the freehold of my modest property and live in it.
Yes! Abolish leasehold and leaseholders. Just have freehold owner occupiers and freehold property owners who would be responsible for all aspects of maintenance and repair of their property and rent directly to their tenants under regulated agreements.
No, I am not a buy to let Landlord. I bought my flat in the mid 90s and lived there very happily for 20 plus yrs.
I finally agreed to move in with my very handsome, urbane 6 ft 4” Partner with whom I had been together with for 15yrs. (He has a big big Freehold house)
I ruminated and cogitated as to what I should do with my flat EG let it or use it for assignations with any toy boy I might fancy from time to time…
I chose the former. Am perfectly content with the rent I receive. I was told by a letting agent that I could “ get much more” my flat is what could be described as “Bijou” and “ very well appointed “.
I would be intensely relaxed if rents were capped and I long for property crash. GREED IS NOT GOOD.
In addition to my previous post;
I have shared Freehold of the property and All major works / repairs etc had been carried out in accordance with the occupational leases through consultation and agreement by the Freehold co shareholders. ( leaseholders)
The property is sound and has been maintained to a “ Good Standard” as required by the lease terms.
It’s not splitting the atom.
In 2014 I moved into my suave urbane and tall partners big big Freehold house and a Managing Agent was appointed for the first time in 20+ yrs.
The rest is history…………….
I have comprehensively answered your query. Now I kindly ask you to answer mine- Are you John Leitch, lietch or Leech? Who is a solicitor of some sort?
I would be most interested to be versed in your background.
Transparency is most Important. WHO ARE YOU?
Your silence will speak volumes…..
Kim. As you suggest I owe you an apology for not responding to your comprehensive reply. So here goes.
My background fwiw. is in engineering, apprenticeship with a large manufacturer of motor vehicle components,studied at Gosta Green tech. (Now, ‘The University of Aston in Birmingham’!!!) and then spent many years as a ‘ one man band’ building small trailers.
I have no connection with any solicitors etc. I hold the whole of this middle class, ex university,’ banking’ (spell check?) sector in very low esteem. Perhaps we need more ‘social mobility’ and these people should try laying one brick on top of another to build a wall, straight, true and square!
My interest in the subject of leasehold has arisen mainly because a probably ex. friend chose to buy a leasehold flat in London to further augment their already imo, substantial income through buy to let. Having now discoverd the reality of ground rents, sevice charges, lease extensions etc. they are now hoping that campaigns such as this will get them off the ‘hook’ on which they have voluntarily impaled themselves. (Help from lack of knowledge and the ‘banking’ set). Profiteering in the property sector does not stop at
The way to avoid the pitfalls of the leasehold sector is to refuse to consider a leasehold property. Personally I baulk at the thought of a semi attached property or even one with a roof so high that I feel uncomfortable repairing it.
Around 1998 my mother sold the semi detached house where I grew up ?? and bought a new leasehold flat . She tried to get the other three leaseholders to go for Commonhold under the then new legislation,but could get no sort of interest or help from them. Is there really any chance that the different owners of units in a larger block of flats will come to any sort of agreement as to how the various aspects of the maintenance and repair of the building, grounds, and communal areas will proceed and how the costs will be assigned? That is why I suggested earlier that the only workable forms of tenure are freehold owner occupation or rental direct from the freehold owner. ( The freehold owner being responsible for all repairs and maintenance to his property)
I hope this clarifies my views and convinces you I am not a part of the ‘legal mafia’
As an aside, ‘Toyboys’!!! ‘Assignments’!!! Kim, you are in serious danger of being drummed out of the womens institute!
Surely any woman who finds herself in this position must have been dragged there by some predatory male intent only on his own personal gratification.
To suggest that any woman is equipped either physically or emotionally to enjoy or even instigate such activity is surely beyond belief. Don’t you read the newspapers?
Sorry for not replying earlier . I intend to restrain myself from further comment. Cheers!
dear mr McArthur, your suggestion on how to deal with rogue managing agent could prove quite popular. Failing that how about meaningful fines for rogue lawyers, freeholders and their pawns? or compulsory purchases of badly run estates/buildings? Full compensation to leaseholders for all their wasted hours ? HMRC investigations anyone?
Yes, to HMRC investigations into why leaseholders have to pay tax at 20% or 40% on all earnings WHILST freehold companies can claim loan interest as allowable expense against rental income before calculating the company tax at 19%.
We want LEVEL playing field for leaseholders and the freehold companies to be treated as trustee for the freehold reversioner and pay 40% rate ( the rate for trust income ) on ground rent income and no loan interest allowed as operating expense to set against rental income.
Sebastian, not wishing to dampen the parade ground but…. RPI ground rents might yet turn out to be more toxic than 10 year doubling ground rents… We at Capital Chartered/Capital Leasehold wouldn’t reccommend to a client to buy property subject to one unless it was otherwise “dirt cheap” and the (largely untested) sums worked out.
I would be cautious arguing these issues with someone of your expertise.
But the point here is that the properties are stalled with doubling ground rent, because lenders – publicly Nationwide, but in fact others, too – won’t lend on doubling ground rent.
Making them RPI means they are more sellable., and in the case of leasehold house owners better – at present – to enfranchise.
We urge flat owners to enfranchise as well, but accept that most sites won’t manage this, so the RPI leases will be passed on and will be an issue for future owners.
Hopefully, Justin Madders’ Bill will by then be law, and flat owners will own their properties without parasites hitching a ride.
Obviously it’s preferable to enfranchise, even if leaseholders have to pay a little more, it’s so much worth it, and will spare years of worry and exploitation.
Sadly that is not always possible, many flats do not meet the minimum criteria, there may be retail units or the landlord may already control units and reversions. What will happen to those?
My place fell into such a category, at first I thought it was bad luck, but after researching it, I realised that such places, are in fact targeted by exploitative lawyers, who understood our vulnerability.
It’s a not always clear when this is happening, until it’s too late to do any thing about it. That’s why nothing short of abolition can really solve the leasehold problem.
You are right.
It is appalling when a freeholder owns the majority of flats and simply makes life hell for the remainder in order to buy them out. It is the nightmare of leasehold.
Do you know any cases that have come to court?
I will send you what I have on this.
Possibly have ground rents linked to average earnings would ensure that the rent should never become onerous
A point often overlooked is that the rent must fall or rise. It is quite possible going forward that we could have deflation and a rent that is fixed or is upward only could in time become onerous
In the medium to long term automation will reduce the number of jobs in the economy and cost pressure from other countries with very much lower wages could again put pressure on salary levels and employment prospects.
La la la la la la.- Wait for mummy to bring a milky drink and then go to bed- says the DIVINE Kim to absolutely no one In paticular………
Too much information!, Also I would never belong to a club that would admit me as a member ( certainly not a laydeees club anyway)
Re- Toy boys” and “Assignations “- What the hell is wrong with either?
You say and I paraphrase ” Surely any woman who finds herself in that “ position” must have been dragged there by a predatory male for his gratification “ what the hell are you on about? Please say you were attempting Irony……
I like to have my brioche and eat it eat. Fnar Fnar ????
Let’s say our here and goodbyes Johnny boy. You seem far too puritanical for my tastes.
Edit the above
1. I like to have my brioche and EAT it. Fnar Fnar ????
2. Let’s say our goodbyes here and now Johnny boy etc etc
A communication starting with “Dear John”, never ends well.
Too true, however I do think John was being truly ironic when commenting on my “ naughty” antics and at least he is not part of the swamp that is Leasehold/ Property Management.