When I was born my parents lived in a small, 1 bed flat. They only moved out and into a house a few years later and from what I have been told the time in between was not easy to say the least. With another child on the way they just about managed to scramble to an ex council terrace without needing to deal with a family of four in the flat.
But, living in that flat meant being on a mortgage rather than renting and if it wasn’t for that they would not have been able to get the house. so it was necessary. They simply didn’t have the money for a house initially.
One of the reasons why it took years between me being born and moving from a place that clearly wasn’t a graeat place for raising me in was leasehold. If it wasn’t for problems with the lease they wouldnt have had nearly as much trouble.
In brief, you have the property and you have the land. If you buy a freehold property, you own it and the land it sits on. If you buy leasehold you own the right to use that land/property for a period of time. The lease determines that. Generally there are rules in place that mean you can extend the lease, it would be exceedingly rare for the lease to run out completely, but you still have to do that renewal. The freeholder, who you lease from, also has a number of other powers over you, they can charge a ground rent for that property, they can charge a service charge (common in, say, leasehold blocks of flats where the freeholder owns and maintains communal areas between the flats). They can also enforce rules on what is an isn’t allowed in the leasehold property. Often screwing you over if you want to have, say, an extension or outbuilding but some even go so far as to, for example, ban pets. Hope you knew of that restriction before you bought the place.
As someone who tends to write from the perspective of a single man you can imagine why this interests me. most small flats are some form of leasehold in the UK, so almost all the single people I know who own own leasehold.
The renewal of the lease was what hit my parents, they had a fairly standard at the time lease and as the lease got shorter the value of the property decreased. Leaseholds with <80 years on the lease are a pig to sell and the closer you get to that the tougher things become. They had to renew the lease which, guess what, was a pretty chunky bill for a family that was living in a 1 bed flat.
one thing our current government has been looking at doing which I think is genuinely good (bloody hell, that must be a rare thing to say) is reforming leasehold. and now that is apparently dying.
The bit that has happened which I am very happy with is the push for far longer, (990 year) leases. This massively reduces the need to renew that lease. Consider that 990 years ago was before the battle of hastings, that is the new timescale. The other part of renewal is people on older short leases should be able to renew to longer ones. Also the plan was to reduce the cost to renew these leases by removing the need to pay a sum of money known as the ‘marriage value’. I wont delve into that here but suffice to say it adds a lot of money paid from the leaseholder to the freeholder during a lease extension. If my parents had had those reforms moving from the flat to a house would have been so much less hassle.
Added to that the idea of the bill was to push for peppercorn ground rents (that is, ground rent, the money paid each year from the leaseholder to the freeholder, would be reduced to a pathetically small amount). As I said earlier, I know a few single people who own leasehold flats and while it isn’t horrificly bad, paying a few hundred pounds a year in ground rent is just an annoying extra cost, which you essentially get nothing useful back from.
The big bill for leasing however is often the service charge and there the bill did aim to push for more clarity in how the charge is calculated. which considering there are people I know who pay over £1500 a year in service charges that is something useful. Transparency should at the bare minimum show where people are being ripped off.
Back to the perspective as a writer about being a single man, the leasehold system sucks. As I say, almost all single people I know who own, own leasehold. Only one of them has the new very long lease so all the rest will have to pay a fat fee for someone to do nothing but own the land. ground rents continue to be an annoying cost each year and service charges a hefty bill with little in the way of meaningful explanation as to how it came to that much. Old leases still have shit ground rent clauses that make the properties a pig to sell on.
I wont say the reform was that great, but like, can I please have just one good thing, one little crumb of satisfaction from our government. It seems like the sort of thing a conservative government should be doing. Its no political secret that conservative politics is more popular among people who securely own their own home and that idea has been a big part of their appeal. Its also obvious that alternative right wing parties like reform support the idea of reforming leasehold. but no dice I guess.
Roboticanary 