All new houses in England and Wales will have to be sold as freehold properties as part of sweeping government reforms to phase out the “feudal” leasehold system.
The reforms are set out in a Leasehold Bill being drawn up by Michael Gove, the levelling-up secretary, for the King’s Speech, which will also overhaul the process of extending leases and give leaseholders more power to manage their building and service charges. Whitehall sources said it would make it easier and cheaper for millions of people to buy their homes outright.
I’ve no idea whether there will be problems from this. But Blair also liked to throw out ideas about how to refirm those meidival practices – abolityion of the Lord Chancellor being the most fun one. We still have the equivalent of a Speaker of the House of Lords, we still have a Lord Chancellor, all that happened is that they’re not the same person any more. Because having an LC was so entwined with the system that it was impossible to actually abolish the existence of an LC.
I expect there to be similar problems. As I say, I don;t know but I expect. Simply because even the clearest logic and political will struggles with complex millennium old systems.
He reminds me of Gollum, though slightly more loathsome.
I have him down as Squealer from Animal Farm.
There must be something in it for him or for some of his mates. He is a Tory, after all. That’s been their defining feature since they abandoned conservatism…
All new houses
So, a few hundred thousand a year
What about the 4 million or so existing leasehold properties?
Or the thousands with escalating ground rents sold recently by housing developers to various investors?
TMB – yes, but Smeagol had friends.
I could see the Duke of Westminster having something to say about it!
I’m not a lawyer, but isn’t the principle of lease-hold that you buy a period of time to occupy the land, not the structure on it?
So it’s not a property sale. Freehold is a land sale, not the sale of a structure.
When it says “houses” does it exclude flats?
I don’t know much about the English leasehold system but the little I do know says that my household will never enter it.
Want a retirement flat in England and Wales? Rent, don’t quasi-buy; that’s my approach.
On Gove and Blair: Gove is obviously an intelligent chap but is capable of damaging us as much as dim Blair did. How does politics turn able people like Gove or Gordon Brown into chumps? What is its magic?
So it’s not a property sale. Freehold is a land sale, not the sale of a structure.
Quite so, John B
You can’t have flying freeholds for the good and sufficient reason that freeholds can’t fly.
A friend had just this problem. New build house with land leased by the developer and so still a substantal ground rent to pay. It is, needless to say, a scam thought up by hard pressed property companies who need a cashflow. Caveat emptor as always applies when looking at such places.
In Upstairs Downstairs, the Bellamys’ house was leasehold.
I once lived in a maisonette, where I owned the lease of the people below me and they owned mine. A strange arrangement, but it made the places effectively freehold
@ Bloke in Pictland
– On Gove and Blair: Gove is obviously an intelligent chap but is capable of damaging us as much as dim Blair did. How does politics turn able people like Gove or Gordon Brown into chumps? What is its magic?
Did you mean incapable? Irregardless, I think there’s a confusion here of general intelligence and political intelligence. Gove and Brown may have some of the former but lack the latter, which Blair has oodles of.
Luckily, Gove manages to fall out with anyone he might need to cooperate with to achieve his goals.
How does politics turn able people like Gove or Gordon Brown into chumps?
Cocaine is the arsehole’s drug of choice.
As hinted at by Ottokring, this is primarily aimed at the scummy developers who sell new houses as leasehold so they can have a perpetual income of ground rent – kerching. What’s more, I gather most of these have an automatic rent increase built into the deeds. Of course, the answer would be for people not to buy them (or insist on buying freehold), but I would guess that the vast majority of people have no idea what freehold and leasehold mean – and it would seem that their solicitors/conveyancers are professionally negligent on not explaining properly what they are buying judging from all the “I thought I owned my home, the ground rent is crippling me” type stories in the MSM..
Where leaseholds have a place is flats/apartments and so on where not every property is built directly onto the land. So if you had, say, a first floor flat and the building falls down – then you are relying on the ground floor owner building their bit so you can build yours on top. Similarly, your neighbour below is reliant on you (assuming only 2 floors) building a roof to keep the water out of both your flats. With a leasehold, there’s a clear documented set of liabilities and responsibilities – so the head freeholder (or leaseholder) is responsible for insuring the whole building and having it rebuilt, having passed on the insurance costs to the subordinate leaseholders. The head freeholder or leaseholder is also responsible for maintenance of the shared areas and structure – again sharing the costs between the leaseholders. For me, having a leasehold flat where things are fairly relaxed and DIY, we generally just get together and sort out our own maintenance for shared areas and the freeholder doesn’t get involved apart from collecting the insurance. But I gather a lot are not so lucky and have to deal with management companies that see every maintenance task as an opportunity to fleece the leaseholders – that’s why there’s this “right to manage” stuff so that the leaseholders can (if they all agree) kick the management company out and manage their own (though that isn’t without it’s risks/problems).
Great idea, then the freeholders could, if they wished, sell off the freehold to a third party to bring in a few quid. And then we’re back where we started.
I’m guessing, since no legislation has been put forth, but suspect that any law would be to prevent the creation of new leaseholds, therefore the above would be similarly unlawful.
Quite how they’re going to eradicate leaseholds is beyond me (and probably beyond Gove), since they are numerous and many of them for good reason (like flats).
If Gove’s aim is to simply prevent new leaseholds being created then fair enough, but any move against existing leaseholders must be compensated, there is after all value in the land under leasehold. Can’t just hand it back to the householders and say “There you go matey, you’re a freeholder now”.
@ Some bloke on’t t’internet
No, people are lying twats who won’t take personal responsibility for making a bad decision (purchasing a leasehold property) and so do what every thick fucker does now – whinge to get bailed out.
Exactly, what sort of solicitor lets their client buy such a house. Our lawyer once talked us out buying a flat because the lease was ” full of unexploded mines.”
@Ottokring – October 29, 2023 at 9:40 pm
Exactly, what sort of solicitor lets their client buy such a house.
Usually it’s one “recommended” by the property company / builder, who can be relied upon not to notice, or at least not to draw too much attention to the fact, that the place is leasehold with all sorts of “maintenance” and ground rent clauses.
Careful Tim, you’re sounding like a Remainer. “Ooh we can’t possibly withdraw from [the EU / leasehold system], it would be too complex, there are all sorts of fiddly edge-cases that we can’t even think of until they happen.”
Something… something about GK Chesterton and a fence springs to mind…
Two things to note:
(1) it only applies to houses, not flats or maisonettes
(2) it only applies to new stuff
So it doesn’t go unpicking anything that already exists and leasehold can still be used where it is useful/necessary. As to the great GKC, why do new leasehold houses exist? To make the purchase price of new houses appear lower than they actually are. We know why the fence is there.
I don’t see any way in which a leasehold residential house is anything but a scam, but legislation shouldn’t limit other people due to my lack of imagination.