Shocking leasehold report:
LKP leasehold market evaluation final.
The residential leasehold sector – mainly flats – is the murky corner of the housing market … and it is far larger than any government body has realised.
The Leasehold Knowledge Partnership today publishes a report demonstrating that there are 5.37 million leasehold properties in England and Wales (end of 2013).
The government repeatedly uses the figure 2.5 million.
The figures show that leasehold is 21.6 per cent of the total housing stock by number of properties.
The Leasehold Knowledge Partnership’s analysis has been accepted by the British Property Federation and the Council of Mortgage Lenders in recent submissions to government regarding the Flood Re insurance scheme.
(Leasehold flats are excluded from the scheme.)
Approximately 60 per cent of leasehold is privately owned. That is 3.25-3.5 million properties.
Another 40 per cent is rented out through councils and other social landlords, totalling 1.8-1.9 million units.
Within the privately owned sector more than 50 per cent is then sublet to the private rental market.
London has the largest proportion of leasehold properties representing 50 per cent of the capital’s housing stock by number of properties, and a third of all leasehold properties in England and Wales.
These figures are based on datasets in the 2011 Census and the figures from the National House-Building Council (NHBC) of January 31 2014.
They contrast with the figures from government and public bodies that have repeated that there are about 2.5 million leasehold properties in England.
The London Assembly reported (“Highly Charged, March 2012) that there were 500,000 leasehold properties, but the correct figure is three times as much.
Almost ALL new residential property in London is leasehold.
Retirement housing accounts for 500,000 leasehold units, of which 100,000 are privately owned, the remainder are rented.
Why this matters
Residential leasehold is a sector rife with scandals. Some behaviour is criminal, according to Sir Peter Bottomley.
Much dubious, and possibly unlawful, activity is assisted by lawyers, accountants, auditors and surveyors.
Bottomley predicts ruined professional careers and possibly prosecutions, when scandals in leasehold come to light.
These are the routine activities reported by the Leasehold Knowledge Partnership and Campaign against retirement leasehold exploitation:
- – Opportunist investors scouring the auctions for freehold assets that are then systematically monetised. For example, by a succession of unnecessary major works.
- – Insurance on blocks of flats is bought by freeholders, but paid for by leaseholders, who have no right to know the scale of the commissions involved (they can exceed 50%).
- – The opaque unregulated property management industry is rife with padded bills and extras. Commissions are routinely paid to property managers to spend other people’s money.
- – Common parts to a block, such as house managers’ flats, are alienated with a separate lease and sold off. This is unlawful, and possibly criminal.
- – Freeholders only invest, perhaps, five per cent in a building compared with the capital value of all the leaseholders’ flats, yet have tremendous powers.
- – Most sickening exploitative behaviour is seen in retirement leasehold against vulnerable pensioners who cannot fight back.
Examples of these injustices can be provided to media.
“Opportunist investors scouring the auctions for freehold assets that are then systematically monetised. For example, by a succession of unnecessary major works.”.
This painful fact happened at our block of flat and changed a friendly, honest, cosy place of living to a block only for making the new land lord. happy. our identity was stolen from us and we are left with a broken block. which has no security, cleanliness and safety. Management Allows the leaseholders do whatever they want as long as pay the service charge demand, extremely high “major work” cots and excessive “Building insurance”.
In our experience our building has been kept as a hostage and only big money can possibly! save us. We are under extreme pressure and bullied by our Freeholder.
Leasehold needs a major reform. A big number of families and their children are under constant psychological pressure; The psychological pain will have a massive impact on the society.
Thank you to LKP and all campaigners., Thank you for trying to save our buildings and our well-being.
Wow! That is some document you have produced – an incredible amount of work! Thank you to your team for fighting our corner.and keeping us well informed..
I agree wholeheartedly. I am only half way through reading it but amazed. Well done to all concerned, you really are the only ones TRULY interested in helping us.
What a fanastic report and congratulations go to the people concerned who put this together.
The one thing that does concern me going forward is that everyone involved with the 2 sites of LKP & Campaign against retirement leasehold exploitation (Sebastian O’Kelly and Martin Boyd) they do this work unpaid because they want to see justice being done. Yet they do have an awful lot of financial outlay – not least the indemnity insurance they have to have in place to protect themselves against greedy and unscruplious lawyers.
I think as a gesture of goodwill from everyone who has benefited from them/the sites mentioned above, if we all donated a little towards those costs if we can no matter how little we should!
Any thoughts anybody? Would you be willing to contribute to keep these sites going? because if we don’t do something to help now then they may not be around in 12 months time to continue the fight!!
Count me in!
And thanks to both of you, too. You have both achieved so much to addressing the imbalance in leasehold. We must now lock in the politicians, publicise issues in the constituencies of our most senior political figures and press for changes.
Changes that we know cannot be left to trade bodies, quangos, the property tribunals, complacent “stakeholders” supposedly representing leaseholders’ interests and all the other fence-sitters that have done so little about this for so long.
Bottomley has grasped this, and is persuaded that much of leasehold is “nothing short of a national scandal”. Others too are coming round to the same point of view.
LKP and Campaign against retirement leasehold exploitation must just keep on demonstrating the issues in a clear and irrefutable manner.
You can count me in too
At the beginning of this incredible journey, none of us properly understood the true implications of leasehold and the potential for unsavory freeholders/managing agents to exploit leaseholders.
It would be a significant step forward for Campaign against retirement leasehold exploitation/LKP to achieve charitable status.
In this way they could be funded by very modest contributions (enhanced by gift aid) out of the massive savings Campaign against retirement leasehold exploitation/LKP have already made on behalf of leaseholders.
It is a frightening thought, but imagine a life without the campaigning sites?
How much more rapacious would freeholders and managing agents be if left totally unchecked?
The price fixing fraud would never have been found out. No Lace Market, Strand Court, St Georges Wharf, Charter Quay. Insurance commissions still at up to 40%. and no leaseholder being able to do anything about it.
Imagine the possibility of having a resourced national charity to protect leaseholders(or commonholders if it comes in)?
Just look at what charities such as National Debt Line have achieved? How many people have they protected from debt collectors operating outside the law?
It can happen. It must happen. We can make it happen.
I think a charity status is a brilliant way forward. I shall be lobbying my local MP’s to highlight the urgent need.
The unscrupulous in the industry think we will either:
Get tired of it all and go away… we won’t
Run out of money and not be able to carry on… we won’t
It would be great if everyone was able to donate £20.00 to keep LKP and Campaign against retirement leasehold exploitation alive, it is not a lot of money in the scheme of things is it?
Our development saved thousands of pounds by not falling into the trap that we could have fallen into and that was due to the help and guidance I received in 2012 for LKP and Campaign against retirement leasehold exploitation.
It is now payback time and we should all consider what it would have cost us in legal fees had these 2 sites not been here to help and shine a torch on this murky industry.
If nothing is done then I am afraid the leasehold industry will go into free-fall and nobody will be able to sell their properties with all the skulduggery that goes on….
“As goes London, so goes the nation”. With the rump of leaseholds in London and the south east, you ought to try and get on LBC rather than 5 live- their national audience is lower than LBC’s london one, if you want wider public support..
I Agree with Michael Epstein and Karen
Last year at this time our bock , Albert Court, leaseholders and I were devastated and bullied by our Management Company for unspeakable money. My life was a hell. The night before our Hearing I received a demand for legal costs, from CrabtreeLaw, for nearly £6000,00.
LKP gave us the biggest support which I was crying to have for 13 years. The impact of Crbtree’s behaviour is not measurable, Without LKP and similar campaigners leasehold section of our society will be psychologically stressed and ill.. I believe some Management Companies create toxic emotions between residents of the block for their benefit, They are love killers.
It took me a while to get out of the shock which I was given by our two management companies; now eventually I am out of shock and trying to remember more of their inhumane behaviou.
Soon we we will walk away from them thank to LKP, and I will inform every body about our gains.
Please count on me, and add me to your list for any help and support,