Are leasehold flats a racket for landowners’ profit? It seems that way to This Writer.
Under leasehold terms and conditions, an occupier owns a property, but not the land it sits on – and only for a fixed period of time, which could typically run from 99 to 999 years. After that period runs out, the property reverts to the landowner – the freeholder.
Leaseholders usually pay the freeholder a ground rent and service charges – and it is the number of complaints about the rising cost of these charges that has prompted the Labour government to take action.
Apparently the government is planning reforms that would ban the sale of new leasehold flats and move to a system known as commonhold, in which homeowners have a share of – and control over – the buildings in which they live.
The BBC report on the planned change demonstrates exactly why many leaseholders think it is needed. Apparently around 1,000 people contacted the corporation after it investigated service charges in leasehold blocks of flats last year.
One said their service charges had risen from £65 per month to £200 per month within three years – a 208 per cent increase.
Another said their service charges had increased by 356 per cent – from £106 a month to £483 in four years.
Another said they were now paying £600 per month.
Freeholders have responded by claiming that increases in the cost of insurance, health and safety, energy, and general inflation were beyond their control but leaseholders are insisting that the rises are unfair.
It seems to This Writer that, in these circumstances, a shift to a new way of running blocks of flats would be welcomed by everyone; if leaseholders became commonholders and had to deal with these costs themselves, they would be able to avoid being ripped-off – or know whether they had been ripped-off by freeholders in the past.
And with commonhold applying only to new builds at first, leaseholders would be able to compare their costs with those of commonholders and know whether they were being ripped-off now.
Right?
So why are freeholders complaining about it?
They say leasehold is the “most effective way of managing large, complex apartment buildings”.
In that case, why are they averse to the possibility of trying out a system that may vindicate their claim – prove it correct?
It seems to me that the government is right to push forward with this change – and leaseholders will be right to press for it to be expanded to current leasehold buildings if it exposes abuses in their service charges.
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Are leasehold flats a racket for landowners’ profit?
Are leasehold flats a racket for landowners’ profit? It seems that way to This Writer.
Under leasehold terms and conditions, an occupier owns a property, but not the land it sits on – and only for a fixed period of time, which could typically run from 99 to 999 years. After that period runs out, the property reverts to the landowner – the freeholder.
Leaseholders usually pay the freeholder a ground rent and service charges – and it is the number of complaints about the rising cost of these charges that has prompted the Labour government to take action.
Apparently the government is planning reforms that would ban the sale of new leasehold flats and move to a system known as commonhold, in which homeowners have a share of – and control over – the buildings in which they live.
The BBC report on the planned change demonstrates exactly why many leaseholders think it is needed. Apparently around 1,000 people contacted the corporation after it investigated service charges in leasehold blocks of flats last year.
One said their service charges had risen from £65 per month to £200 per month within three years – a 208 per cent increase.
Another said their service charges had increased by 356 per cent – from £106 a month to £483 in four years.
Another said they were now paying £600 per month.
Freeholders have responded by claiming that increases in the cost of insurance, health and safety, energy, and general inflation were beyond their control but leaseholders are insisting that the rises are unfair.
It seems to This Writer that, in these circumstances, a shift to a new way of running blocks of flats would be welcomed by everyone; if leaseholders became commonholders and had to deal with these costs themselves, they would be able to avoid being ripped-off – or know whether they had been ripped-off by freeholders in the past.
And with commonhold applying only to new builds at first, leaseholders would be able to compare their costs with those of commonholders and know whether they were being ripped-off now.
Right?
So why are freeholders complaining about it?
They say leasehold is the “most effective way of managing large, complex apartment buildings”.
In that case, why are they averse to the possibility of trying out a system that may vindicate their claim – prove it correct?
It seems to me that the government is right to push forward with this change – and leaseholders will be right to press for it to be expanded to current leasehold buildings if it exposes abuses in their service charges.
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