This is robust advice from the financial journalist Merryn Somerset Webb and it’s not wrong, but …
Some people have to live in flats, which are (quite unnecessarily) sold as leasehold in England and Wales: the poor, the single, those seeking to live in the centre of cities.
Commonhold is a perfectly sensible alternative.
In the meantime, let’s reform leasehold by stripping out all the income streams: the ground rents; the insurance commission scams; the related company services; the ludicrous and unfair property tribunals; lease forfeiture windfalls etc …
Private equity, such as Will Astor’s Long Harbour fund has poured money into residential freeholds (it is worth £1.6 billion).
This is just a means by which the rich hitch a ride on the home owning aspirations of the less rich.
It needs to stop.
Shared ownership – Help to Buy’s poor relation – MoneyWeek
Now the fuss over onerous leasehold clauses and Help to Buy mortgage “prisoners” has abated, the spotlight is starting to shift to shared ownership. Described by housebuilder and landlord Aster as the “poor relation” to Help to Buy, due to its lack of government funding, shared ownership is another scheme designed to help people buy property.
Related posts:
Leasehold needs to be reformed, BBC Money Box Live is told
Anti-leasehold petition gains 10,000 signatures in under a week
Murky investors hitching a ride on the English (and Welsh) homeowner, thanks to leasehold
Leasehold first-time buyers trapped in leasehold homes with £800 ground rents, says BBC
Leasehold houses are the ‘spivvy idea of a financial director to make more money on wet Thursday afternoon’, says MP
Kit Malthouse to meet Persimmon over doubling ground rent at Picket Twenty site
Too right it does! Biggest scandal ever!
Leasehold Flats can be a good buy for those who wish to be in a place they like and feel comfort.
The problem is the Freeholders who bring in Managing Agents such as FP who become the Lessor and have the 125 year lease when you as resident s receive 99 years.
Check out About Firstport or About Peverel on the web.
Many years ago, Charter Quay produced a most informative flow chart demonstrating how funds from leaseholders could end up in the off shore bank accounts of the freeholders.. There are many very good managing agents in the sector, but leaseholders should always be wary of developer/freeholder appointments, especially where the freeholder is connected to the managing agent.
Thank you for writing the truth about leasehold. At least you have the courage to denounce this unfair practice which unfortunately.only serves to widen the gap between rich and poor in this country even more. People have had enough of having to work to serve the people with money and privileges. Down with inequality and unfair society! Why do the majority of people have to suffer for the pleasure of few others with privileges?
Leasehold is expensive and there is no transparency. Developers want only to build on Green lands, more profitable for them.They will own more and more good land. Shareholders are the wealthy from abroad and nationally, including Politicians. Leasehold is primarily for profit, this has caused a two tier system, the feudal society. All very unfair and can be difficult to get out of. We bought leasehold. Went through the expensive and worrying obstacle courses of trying to sell, staircasing. Got the Freehold after obtaining a large mortgage. Still not sure if Freehold is really Freehold or in name only.
Here is my treatise on leasehold:
ABOLISH domestic leasehold laws, and with accompanying retrospective legislation.
The End.
Why isn’t Jeremy Corbyn bothering with the leasehold scandal? His housing spokesman John Healey doesn’t seem to be campaigning on it either. Putting out the odd press release for The Guardian etc would be an easy hit. Such a shame given this concern, if well articulated, would resonate with Labour’s constituencies in urban areas, such as London and Manchester, especially the young who are now looking to (leasehold) flats as offering the only chance of getting on the property ladder. The Conservatives need vigorous challenge over this issue otherwise they may just fall for the concerns of some of their financial backers and water down the reform agenda. Society would pay a very heavy cost if that happens. So James Brokenshire needs to have his feet held to the fire, otherwise this feudal hell will persist and we will see more misery with the creation of more leasehold flats. The Conservatives should be the party of home ownership – leasehold is producing a generation of pseudo-homeowners, the precariat. No justification for it other than human greed.
Very disappointed with Corbyn keeping quiet about it. is any party supporting the abolition of leasehold ?
What is happening with the ‘regulation’ of managing agents? is that moving forward? The sector is still infested with puppet management companies, nice little family set ups to swindle leaseholders and help freeholders escape their tax responsibilities.
Nicholas,
Neither Jeremy Corbyn or his Housing Spokesman John Healey have shown no real interest in Leasehold worth mentioning. It does not show on their radar as they have other problems to deal with. Just placing the odd press release for The Guardian, shows a lack of knowledge or interest by Labour yet with the number of pensioners involved, how can he decide to cast them away and put all his eggs in one basket, that being the young who he hopes will vote for him. It is a shame as it really does resonate with Labour’s constituencies in urban areas.
If it is the young who are now looking to (leasehold) flats as offering the only chance of getting on the property ladder, this has not been well thought out. Conservatives are no better and do require challenging over this issue.
The power of financial backers would see the watering down of any reform, which would then pay a high cost. James Brokenshire Housing Minister needs to be lobbied and LKP are the ones who can do this. Having sold off the Council Stock, Conservatives should be the party of home ownership. Leasehold is producing a generation of unknown overseas Freeholders using the worst of Landlords/Managing Agents for as you say, Greed.
URGENT…URGENT…URGENT
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