Homeground, the ground rent gatherer that is part of Will Astor’s Long Harbour group, is gathering revenues for offshore owned freeholders, it admits.
In a leaflet circulated to leasehold homeowners who have contacted the company, it says:
“Some of our client Landlords are companies registered in England and Wales, with records available at Companies House, and others are registered in Guernsey with their records held by the Guernsey Companies Registry.”
These offshore assets join billions of pounds of other offshore-owned UK properties that have aroused the interest of transparency campaigners and Parliament.
From a boutique business in the 1990s, offshore ownership of UK residential property is now an epidemic. The scale of this scourge is revealed in Private Eye and other publications: It is difficult to understand how a democracy functions with this sort of industrial scale smart-arsery, which makes a mockery of the little people who pay taxes. And ground rents, for that matter.
It has reached £269 billion over the past 14 years, Property Week reported in 2015.
It is also unappetising that Mr Astor, the heir to the viscountcy, could not put his resources to a wealth-generating enterprise of some social merit.
Instead, he has been trained by Vincent Tchenguiz, for whom he worked for six years, in how to monetise residential freeholds – a sector that has long been notorious in property.
HomeGround makes the point: “For clarity we do not take any other forms of commission whatsoever, from third parties.”
So that’s a departure from Vincent’s model.
HomeGround’s explanation of the continues:
“These investors want to own the freeholds since they see them as secure long term investments, and are particularly interested in making sure the properties they own are well maintained and well looked after because of their long term interest in the property.”
Actually, there is plenty of evidence of freeholders being completely unconcerned about the physical state of the properties, which has no bearing on either ground rent or the reversionary value of the leases.
A monetising freeholder can make money by endlessly spending out leaseholders money on a block of flats, say, and, contrariwise, running the block down to the point where only he is the only likely purchaser of a lease in it.
LKP has examples of both enthusiasms.
HomeGround addresses the doubling ground rent scandal, as follows:
“Some housebuilders decided to sell leasehold homes with leases including doubling Ground Rent, which have had media attention recently.
“If you think you are affected you should check what you were told by the housebuilder (if you bought your home newly built), and in any event by the conveyancing solicitor you used when you bought your home.
“If you think you were not properly advised about this you should complain to them. All solicitors’ firms are independently regulated by the Solicitors Regulation Authority (“SRA”). You can also take independent legal advice about your rights if this situation applies to you.”
Indeed, you should. You might also raise the issue with your MP, Sir Peter Bottomley and Jim Fitzpatrick, the patron MPs of LKP, and with LKP itself.
The issues are to be addressed again by the All Party Parliamentary Group on leasehold reform, of which LKP is secretariat, on March 22.
“Aren’t Leases with doubling Ground Rents illegal? Why do your clients have such Leases?
“These Leases are legal, despite what you may have read or heard in the media. [We are not aware of any media outlet, or politician, suggesting that they are illegal.] They were sold on to our Landlord clients, who bought them in good faith, by the housebuilder who created them. The underlying lease terms have not changed.”
“I’ve heard about this – aren’t you overcharging Leaseholders and forcing us to pay an extortionate price for the freehold?
“The quotes we give to leaseholders of properties who want to buy their freehold are based on the value of that freehold to our Landlord client, plus an allowance for its costs of selling to you. Any leaseholder who gets a quote has the right to accept it, say no, or negotiate by offering a different price. There is no obligation on you to accept the price quoted if you don’t want to. We strongly urge any leaseholder who is unhappy with a quote to get advice from a surveyor about their rights, and their own valuation of the freehold
What if the housebuilder offered to sell me the freehold of my house for a fixed amount a short time ago? Don’t you have to do the same? Aren’t you just profiteering from owning these freehold houses?
“If you own a leasehold house your right to buy the freehold is the same no matter who owns it, and you can have the freehold price worked out under the same method in the legislation. If you bought from a housebuilder, they might have offered to sell you the freehold at a discounted price. That offer doesn’t bind your current Landlord , and may not reflect what your Landlord had paid the housebuilder for the freehold. However none of that changes your right to buy your freehold, and have the price decided independently, if you want to.”
The full HomeGround document is here: HomeGround-FAQs info on leasehold