By Harry Scoffin
Almost two years on from the announcement of a ban on the sale of new-build houses as leasehold tenancies, developers are continuing to cash in on the practice.
According to government figures published yesterday, the first half of 2019 has seen Help To Buy equity loans taken out on 395 leasehold houses.
That means taxpayers have been subsidising housebuilders to sell an average of two leasehold houses a day.
It is not known whether the houses have escalating ground rents written into the leases.
In the first quarter of 2019, 200 houses were sold through Help To Buy on a leasehold basis.
The flagship government housing initiative was responsible for the sale of another 195 house tenancies in the months of April to June.
Developers are set to enjoy another year of taxpayer funds to sell houses as tenancies if no leasehold houses ban is forthcoming.
Only in 2021 do the existing Help To Buy procedures end:
Taxpayer subsidy via Help To Buy for leasehold houses to run until 2021, MPs told
The figures also show that developers have been comfortable selling flats in England to consumers homebuyers with a share of the freehold.
From launch in April 2013 to June 2019, Help To Buy equity loans have been issued on 2,231 flats recorded as “freehold” on the Homes England Management System.
A footnote says:
“In England, flats are typically owned on a leasehold basis and freehold flats are rare. A flat may also be owned as a ‘share of freehold’, meaning a tenant will have a lease for their flat as well as a share in the freehold of the whole building, but technically the flat will still be a leasehold. It is most likely that these flats recorded as freehold, are ‘share of freehold’.”
The information supports Conservative politician Crispin Blunt’s call to have Help To Buy 2021 regulations stipulate that apartments must be sold as (share of) freehold where a developer is unable to make the existing commonhold legislation work:
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Been to many industry talks on leasehold,fleecehold, as well as NewBuild/Shared Ownership, including Housing Associations and Affordable Housing.
ALL discuss and include the words “Institutional Investors” in their spiel. That tells you everything you need to know.
Institutional investors (including numerous pension funds) all want a good, long term financial return for their investments.
They do this by monetising YOUR home. It is their investment! Not yours!
Wasn’t there a commitment to have Help to Buy available to second-hand properties at some point?
That should raise the competition and thereby, the standards of homes being built, in terms of both quality and tenure as at the moment the ‘new build’ estates developers have cornered the market for Help to Buy funding and are lining their own pockets with the proceeds and profits at the taxpayers expense.
I don’t believe this was the thrust of what the government were aiming to achieve when they pledged to create more “homes’ for people.
I have always thought it as the Help To Sell Scheme, introduced by the government to “encourage” developers to build houses, not help people to buy, that’s why only new build.
Developers have far more chance of selling the rubbish quality they build if the buyer has an incentive, to buy, and is therefore less inquisitive to realising they are stitched up with leasehold or fleecehold.
The Taxpayer funded proportion of any Leasehold House (or Flat) is NOT A GIFT – it is a LOAN.
´Through the Help to Buy scheme, you only need to raise a 5% deposit and can access the support of up to 20% in the form of an equity LOAN from the Government. There’s nothing to pay on the loan for 5 years as it is interest free until year 6. ´
LONDON : the equity LOAN it gives new home-buyers within Greater London from 20% to 40%..
It is possible for a multitude of REASONS that the UK Property Market will collapse 20% and in
London NEW BUILD PROPERTY collapses 40% , then the risk to the TAXPAYER will be proportional.
The risk for the Owner is substantial if the PRICE IS TOO HIGH and interest cannot be repaid.
MORTGAGES & LOANS are not casual financial Transactions e.g. splashing out on a Holiday with
a Credit Card or signing for 18 month Broadband Streaming Services : THEY ARE NOT FREE:
The Sales Blurb for the New Build Property Websites SHOULD BE CLEAR about (1) Leasehold
or Freehold Title (2) Other Estate Costs for parking , play areas and green space maintenance,
TIME TRAVEL doesn´t exist yet , so LOOK AT THE CLAUSES of any Contract or LEASE or PROPERTY
Document in DETAIL and SLOWLY and ONLY SIGN IF YOU ARE HAPPY. That means without TIME
TRAVEL the signature will always be there. ONE EASY SOLUTION is to RENT OUT THE PROPERTY.
If it is a 3 Bed Leasehold House, then possibly 4 or 5 Tenants can pay LOTS OF RENT.
Make sure you have a Tenant Guarantor to reimburse the costs of unpaid rent and damage.
If a Lawyer did not highlight unusual Ground Rent clauses where the Rent paid doubles every
5 years in a secret clause written in a Foreign Language : then make a claim against the Lawyer.
IF THE CONTRACT IS IN ENGLISH – BE CAREFUL WHAT YOU SIGN
BUILD YOUR OWN HOUSE if you despise the FTSE Property developers and Fund managers.
First you will need to buy a Plot and make sure you have access and easy cheap connections
to Gas Electricity Water and Telecoms ….. and shops close by for for food and drink etc.
Planning Permission : heard of it ?
Arrange for sand cement timber doors windows cabling plastic and copper pipes
roof tiles and bricks to be delivered. Hire a builder.
Beware of rip-off merchants and con-artsts.
Have lots & lots of money to pay for everything.
Consult a Solicitor about Title to the Land for the build.
Easy isn´t it ?
The ´Help to Buy ´concept is interesting.
I really want Help to Buy for a brand new Mercedes
I really want Help to Buy for a brand new iMac
I really want Help to Buy for new Trainers
I really want Help to Pay for Gym Membership.
I really want Help to Pay for Travelcard costs here in London
I really want Help to Buy a new Rolex – I like bling.
I really want Help to Buy a 65 inch 8k TV and Help to pay the electricity bill.
Service Charge costs
People moan and complain about painting & decorating ,
insurance for the Common Parts, cleaning & repair costs,
the costs of light bulbs and flooring , cutting the grass and
trimming the hedges in the gardens they enjoy for 12 months.
People who moan and complain want all those things for
nothing and then go on 4 holidays a year and spend a
small fortune on raves and concerts and cinema tickets
and fast food and gym membership and designer
casual wear and spectacles and the latest smart phones.
In a block of flats there will be people in very well paid jobs
who will make excuse and argue about the Property costs
they agreed to pay for.
Other residents will have more modest income with
better morals and will scrimp and save the pennies
to pay bills and invoices on time.
There will always be problem scum bag tenants and residents
in the flat upstairs or downstairs who are a nuisance to others
anywhere on this Planet.
There will always be problem scum bag Landlords and Property
owners who abuse the system and are a nuisance whatever
they do and wherever they go. Such is life
Michelle Green mentions Affordable Housing.
Can I have half price Affordable Organic Pizza ?
Can I have half price Affordable Chicken Chasseur?
Can I have half price Affordable Caviar ?
Can I have half price Affordable Chianti and M&S Ready Meals ?
etc
Stefano, it is the job of MPs and government to make laws that protect citizens from exploitation. Protection from unfair consumer regulations 2008 is one example. Leasehold contracts should not be exempt, the present law is unbalanced and not fit for purpose.
Recent home buyers were mis-sold their houses because developers, freeholders and some solicitors acted in concert to deceive buyers, or failed to warn people of onerous terms.
Any news on Nicholas van Hoogstraten ?
EXACTLY
”it is the job of MPs and government to make laws”
HM Govt should pass a Law : The Consumer can take back faulty
NEW CARS & FAULTY NEW HOUSES etc for a FULL REFUND.
Make a LAW about Property Transfers concerning an Estate where
the Collective have an Option to buy Play Areas , Green Spaces and
Access Roads before they are sold to 3rd Parties
Land is Valuable : so why should the Owner ‘flog the Freehold’ to anyone ?
To stop abuse of Covenants : cancel Covenants in Property Law!
The Land Owner should Donate play areas and green spaces and access
roads to the Local Authority .
Maintenance goes to the Local Ratepayers
If People have been manipulating Leasehold Property Sales the NCA
and CPS should prosecute.
The easy solution is Walk Away , don’t sign anything and then
no need to moan and complain. The response by Persimmons
is correct (elsewhere) .
I’ve read all about the shenanigans that Land Owners & Developers
and Investment Funds get up to:
Half the problem is 3 YEARS WASTED House of Commons
time because of Brexit
Nobody made me buy a rust heap pile of Blue Renault 14 junk
from an East End Auction that did 50 miles before the
wheel fell of – it was all my own work.
The thing about Low Cost Housing is Someone
Else Pays For it
We have TOO MANY PEOPLE IN THE UK.
Jeremy Corbyn can Confiscate 10% of all Land owned by the Few
for the Many across the UK and then build all the houses he wants.
Nice new and warm with lots of Cladding all at the cost of the Taxpayer .
He can confiscate 10% of the Land where you lot live at the LKP first.
Then confiscate 10% of the Land of all 650 MPs and then the House Of Lords.
Are these Houses for Low Rent or Low Cost Housing ?
We can all be Socialist Home Occupiers of National Assets……… Squatters with Contracts..
So because of DAFT PEOPLE signing dodgy Leases, you people at the LKP and a
few Journalists want to transform and change and alter 1,000 years of Property Law.
Ridiculous response Stefano, or maybe Stephen in Italian diguise. You sound as though you have been on the vino. Home buyers were deceived and incentivised to use the developers pet solicitors. Failing to inform at point of sale.
Slavery had been around for a very long time, thankfully abolished in the UK. Long leasehold needs to be consigned to history as well so England and Wales can join the rest of the civilised world.
Viv Newcomb – you are wrong.
The Property Developers are laughing all the way to the bank : courtesy of
VERY HIGH PRICES because of Help to Buy .
The Taxpayer is Buying Nothing at all.
Tom Dick Susan Francesca Linda Liz Harry Winston Ahmed Seamus Cynthia Doris and Diana
who signed the Contracts ( with the Sales Reps ) are the people – as Customers –
´ lining the pockets ´ of the Housebuilders Shareholders and Employees .
No difference at all to buying and driving a Porsche Ford Renault Jag Nissan
Mazda Honda Volvo Chrysler or Vauhall . All the Shareholders and Employees
do very nice out of that , thanks very much .
Business use vehicles have Capital Allowances and the costs are 100% tax deducted .
That means very poor people & pensioners FUND BUSINESS USE out of High Street
VAT and Income Tax when they go to Argos or Currys.
Let´s hope 650 MPs put a stop to that nonsense.
WHY DON´T YOU LEASEHOLDERS MOAN AND COMPLAIN ABOUT THAT ?
Finally , please stop moaning & complaining about Leasehold issues.
Dumb Arses Everywhere : New Build Flats & House that are sometimes CRAP quality
In the USA they have LEMON LAWS that concern CRAP NEW & USED CARS.
These LEMONS can be taken back to the Showroom for a FULL refund.
We don´t apply the Sale Of Goods Act to NEW Cars & Houses & Flats – we should.
Most of the Problem today with MEGA Domestic Property Companies is the lack
of strict oversight from 10 Downing Street : it did almost nothing for decades.
Even with second-hand property for sale & rent , it is a nightmare with Estate Agents
cowboys & spivs.
In the USA and EEC property agents & tradesman are Licenced and Supervised –
in the UK it is almost like a Car Boot sale pot-luck lottery ticket.
————————————————————————————
In Scotland many years ago the Missives procedure for New Build Law was
outdated and then a MSP started a review process that finally became Law.
It isn´t perfect TODAY : if there is SEVERE DELAY to a build or the specifcation
is really substandard then the Buyer can pull out and get the Money
deposited refunded in full but not Legal or other costs..
——————————————————————————————–
It surprises me that such an important Topic as UK New Build Property Law
has been neglected by Parliament for so long ……. decades.
Ditto Vehicle Pollution
Ditto Knife Crime
Ditto Vehicle Deaths & Injuries (including the EEC)
Ditto Recycling & Litter
Ditto Alcohol Abuse & Obesity
Ditto Traffic congestion
Ditto Keith Lemon
Ditto Keith Lemon says once again
STOP MOANING & COMPLAINING ABOUT GROUND RENT CONTRACTS
THAT YOU SIGNED BECAUSE YOU WERE 100% GRADE A STUPID.
Concentrate your efforts on PROPERTY LEASEHOLD & FREEHOLD LAW REFORM