A good article in the Telegraph about leasehold newbuild flats being on the rise.
They make up 43pc of all newbuild registrations with the Land Registry, compared with 22pc in 1996.
While leasehold newbuild flats were up by roughly 10,000, leasehold houses also sharply increased: registrations of newbuild detached leasehold houses more than doubled in 2015 to 2,829.
Persimmon has being doing a lot of this in Peterborough, as reported in the Daily Mail here
Sebastian O’Kelly, a director of Leasehold Knowledge Partnership, is quoted saying: “We are producing huge swathes of new leasehold homes. Older people are being encouraged into retirement flats, but these are nearly all leasehold.
“First-time buyers in flats and houses are being caught. Elderly and novice buyers are being forced into a tenure they do not always understand and where they have few rights.”
The truth of the matter is that given the huge advantages of leasehold to create sustained revenue streams, it is bound to grow.
Doubtless, housebuilders would like nothing better than to turn all the British people into tenants, embed long-term revenue streams and then flog the freeholds to offshore entities.
We need to stop them doing this.
Some of the numbers quoted in the Telegraph report will need a bit more checking. If we ever get enough time we also need to update our main report on the size of the sector.
For too long people have tended to make up silly numbers when they talk about the size of the leasehold sector, which is why it took so much effort to help show government that it should produce more reliable data. The 4.1 million homes quoted in August 2014 was still a bit of an underestimate, but an enormous jump from the figures they used before.
If anyone has read the recent LEASE press release, you will have seen it too has some new numbers that it attributes to itself in terms of regional distribution. These figures are wrong.
LEASE’s estimate on the number of leasehold flats being built is not only wrong, but wrong by nearly 200%. The country is NOT building about 120,000 leasehold homes a year. While the data is not yet available for the whole year it looks as if about 135-145,000 homes will have been built in 2015, of which about 40-45,000 will be leasehold.
How preposterous that a government dept can’t calculate the number of houses/flats etc that are built annually are Leasehold or not.
OK, if a similar dept was unsure of the amount of Canada Geese or the number of foreign football managers flying in to the UK over a set period one could understand and sympathise…but bricks and mortar should be fairly simple to add up.
Surely this can’t be a further case of educationally dumbing down in the maths depts!!
The problem is counting apples and pears. Almost all the data collected on properties being built is set out in terms of houses and flats. Nobody regularly collects data on leasehold or freehold title, which is why it took us so long to come up with numbers that helped persuade government it needed to produce new official figures.
The problem is that not all flats are leasehold: some do not have any title at the Land Registry.
If a flat is in a socially rented block and the landlord chooses to register just the block, the flats will have no title at all on the Land Registry. The only time these properties would be registered, and therefore become leasehold, would be if a lease were created during a right-to-buy, or the flat became part of a shared ownership scheme.
It gets a little difficult to track down which flats have no title. This is why our estimate of the total number of flats is about 1.8 million higher than the government number of leasehold properties including leasehold houses. There are also still a small number of flats that have something called a flying freehold, which are of course also not leasehold.
Not all houses are freehold. Some are created as leasehold homes. The official estimate is that we have just over a million leasehold houses in England. That number seems a little high to us, but the statisticians at DCLG did a lot of checking and were confident the numbers were robust.
So if we get rid of any potential double counting, then add the total number of flats including those that are not leasehold because they have no title, to the total number of houses that are leasehold that gets us somewhere well north of 6 million homes.
“Flogging freeholds to off shore entities ” this is basically a cut & dry, tax avoidance scheme and an insult to all law abiding uk taxpayers, whether they own their home, are tenants or leaseholders. The chancellor needs to look into them and tax accordingly.
If the government can’t calculate the number of leaseholds in this country, couldn’t David Cameron ask Samantha to ask her step-brother?