At the weekend the Financial Times published a special report on leasehold. The report, entitled Leasehold homes – what an estate agent won’t tell you, lays bare all the problems with leasehold as a form of tenure, including the exploitation and lack of legal redress, and reveals that Londoners are most affected by this.
Leasehold properties made up 43 per cent of all new-build registrations with the Land Registry in England and Wales in 2015. And about 3,000 of these were detached houses, which with no common parts like flats, have no reason to be leasehold.
The FT says “Leaseholders complain that managing agents can abuse their authority, making unfair charges knowing that leaseholders have little means of legal redress. Yet there is effectively no regulation. In some cases, people who challenge their bills can end up paying punitive costs.”
The report includes details of the recent Court of Appeal challenge by chartered surveyor James Wyatt, of Parthenia Limited, to the way marriage value is calculated in lease extensions. Wyatt has proposed a more robust mathematical formula that better reflects the investment made by the leaseholder in a property.
Commonhold, a fairer alternative to leasehold which gives more rights to the resident of the property, was introduced in 2002. But not surprisingly most developers prefer the feudal system which gives them the upper hand in all negotiations. More surprising is that local councils still use leasehold tenure. For instance the Walthamstow Scene development which commenced in 2014 is a mixed development of leasehold tenure and rented accommodation and the leaseholders are still trying to resolve issues of responsibility for maintenance created by this outdated form of tenure.
The FT concludes that the leasehold sector is in need of statutory regulation. The All-Party Parliamentary Group for Leasehold Reform and Commonhold is chaired by Barry Gardiner, Labour MP for Brent. If you agree, please email him.