The scandal of newbuild houses sold as leasehold – aol money uk

We’ve heard an awful lot over the past few years about how important it is to have control. Garden of the gods wedding If we don’t have it, we should take it back. First pitch If we do have it, we should hang on to it at all costs.

I’m all for this. Fantasy baseball team names generator Study after study shows that those who have a sense of being “in control of their own lives” tend to live longer and happier lives. Softball score sheet printable So here is something I just don’t understand — why are more and more people are buying leasehold homes?

About 90% of the newbuild property sold in London is leasehold, while some 40% of all newbuilds in England and Wales are leasehold (the system is different in Scotland). Minor league baseball teams for sale Most oddly of all, it isn’t just flats that are being sold like this. Lattice energy trend Land Registry numbers tell us that thousands of houses are now being sold on long leaseholds as well.

If you are one of the buyers of one of those houses, perhaps one who spent years saving enough for a deposit to move out of the rental market, I wonder if you are what you think you are. Fence minecraft You see, you aren’t actually a homeowner. Fences lyrics You are still a tenant. Travel baseball You have the right to occupy the property for 99 years, 125 years or perhaps even 999 years. Natural stone resources But the building itself and – crucially – the land on which it sits, remain the property of the freeholder.

That’s not a good thing. Drip drop ice cream First, because it is inconvenient. Baseball stores You want to put up a home office at the end of your garden? You don’t just have to ask the planners, you have to ask the freeholder too. Gardens illustrated It’s the same for a conservatory. Garden design Second, because it is expensive. Baseball drills for 7 year olds The value of the leasehold (and hence the price of your house or flat when you try and sell it) falls as it reaches the end of its term. Facebook app wont load It is a wasting asset (although sadly not one that is exempt from capital gains tax in the same way as wine).

You’ll also have to pay ground rent to the freeholder for the right to continue to use the land every year. Landscape design ideas for front yard You might think you paid for this upfront in the purchase of the lease. Masonry store near me You are wrong. Landscape design pictures Finally, you will have to pay charges for any services that your freeholder provides (or claims to provide).

There are some safeguards. Small front garden ideas no grass Leaseholders can extend their lease at will after two years, or insist that they are sold the freehold. Landscape images free download They can challenge service charges at a tribunal. Garden of eden kansas And if they can get enough other leaseholders on their side they can force a change of managing agent for their buildings. Football games online multiplayer But the key problem of owning a leasehold remains. Fencing rio 2016 You’re still effectively a tenant ¬– you just paid an awful lot of your rent up front.

Worse, while in your old days as a renter you could give a bit of notice, hand in your keys and wander off, you can’t do that any more. Cheap bats com You are responsible for all the costs that come with the lease until you can persuade someone else to take over your tenancy (and liabilities). Basketball wives la season 5 episode 5 That’s fine in a high-volume and rising housing market. Basketball rio 2016 tv But it might turn into a type of timeshare hell in a low-volume and falling one.

There’s another reason to think hard about buying a leasehold property at the moment. Softball games According to Louie Burns of Leasehold Solutions, 2017 is set to be the “worst year” in a while for leaseholders. Francescas A “seismic” court decision on how the cost of a lease extension should be calculated will push up the price of extending. High pitch sound test At the same time, new court fees will add to the cost of taking freeholders to tribunals and a new ruling will affect the way leaseholders in blocks of flats can apply for the right to manage their own buildings.

But the real changes are about the way newbuild leaseholds work. Minecraft fence designs Service charges aren’t what they used to be in big developments. Special olympics basketball schedule The principle remains the same, but look at the smart new riverside blocks in London and you will see how the scope is changing. Pitch in spanish You aren’t just paying for your share of a nice concierge, a bit of polished brass and the upkeep of communal areas. Basketball teams in new york The spaces around big developments (roads, landscaping, etc) might look semi-public but they are financed from leaseholder service charges. Retaining wall design software This is pricey stuff — and the higher your service charges, the lower the resale value of your flat should be (I’m assuming rational buyers).

Ground rents are changing too. Baseball america hot sheet New leaseholders are likely to find that annual bills are knocking on the door of £300 and designed to rise. Softball express In some cases, it will double every 25 years. Free online baseball games This stuff matters — partly because it is a trying annual expense (remember the story of the king and the chessboard) and partly because it makes buying your freehold (or share of freehold) so much more expensive, too (you have to compensate the freeholder for his loss of your income).

But think about the ground rent and you will a clue as to why developers are so keen on leaseholds — and why some have even been selling perfectly ordinary three-bed newbuild houses (rather than flats) on absurd 999-year leaseholds instead of freeholds (although salesmen like to call them “virtual freeholds”). Top fantasy baseball players 2016 As buying agent Henry Pryor points out, there is “no genuine reason” for this.

But streams of income are valuable. Facebook live map And the lower interest rates get, the higher the present value of those streams becomes. Francesca eastwood Thus, a £275 ground rent paid out every year for 99 years is worth about £3,800 with interest rates at 7%, rising to £6,600 with rates at 4% and over £11,000 at 2%.

The more rates fall, the more it costs to replicate the income from the ground rent elsewhere (you have to put aside more cash now to earn the same income in the future). Fantasy basketball mock draft 2015 Similarly, a £275 ground rent that doubles every 25 years is worth £4,751 with rates at 7% and £30,000 at 2%.

Look at those numbers and tell me what you would want to do if you were a housebuilder looking to maximise your profits. Dripping springs You’d sell houses on long leaseholds for much the same price as freeholds. Basketball wives la cast 2015 Then you’d pimp your profits by selling on the freehold to a ground rent fund too. Flower bed designs Of course you would, silly not to.

So there you have it. Front porch ideas pinterest Loose modern monetary policy meets medieval property law to create tenant hell. Football field template If you have already moved into a long-leasehold property, you might want to think about seeing how you could take back control. Basketball olympics 2016 roster Everyone else might want not to give control away in the first place. Fantasy football rankings by position I would only ever buy a home that comes at least with a share of the freehold.