Lawyers ask: Why is Gove delaying ground rent reform?

Ground rent isn't the biggest problem for leaseholders. A great many leaseholders pay virtually nothing in ground rent. I have 5 leasehold properties and pay £0, £0, £10, £10 and £30 ground rent. There may be some merit in capping ground rent at maybe £500 a year. Plenty of people who extended leases had various choices of paying higher ground rent in exchange for a lower lease extension payment. Or a higher extension payment and lower ground rent. They often extended the lease in order to sell the property so didn't care what they lumbered the next owner with. That's not quite the point though. The freeholder offered the choice and will lose out if ground rent is scrapped.

Service charges are the big issue. Freeholders and management companies constantly commissioning expensive surveys for work they know will never get done purely so they can add on their override.
Also management companies trying to change the terms of the lease. Demanding payment in advance for work that may not get done when the lease clearly states payment is due after work has been carried out.

The great “ con” with all houses being freehold is Estate Rent 🆘🫣, ALL new build estates are now a total rip off, with uncapped service charges being a part of your affordability calculation. The real sting in the tail is that as a freehold house owner you’re left with less redress to challenge the service charges than you would have had under leasehold 😂. What a total scam, and of course you pay full council tax as well 🤔🏡💰. These houses will become more difficult to sell in the future 😬

Jo, your flats may be older. My flat in London has always had £750 annually, paid every 6 months (£375). Service charges are way above Mayfair flats, though the property is not in Mayfair. During covid, they had most staff furloughed and the leisure centre with lovely swimming pool, state of the art gym, sauna, steam bath and jacuzzi were all closed for atleast 2 years but we never saw any reduction in service charges. Every time I enquired they said it will be after their accounts are done. Now this is atleast 2.5 years later and service charges have gone up as usual. The rents are low. Tenants are easy to find due to the amazing facilities but not paying much rent, as they cannot afford to pay high rent. Tempting to use it myself but with mortgage interest payments and high service charges, I cannot afford it. However, in 2027, we will sell our property residential property and pay off the fixed mortgage due then and be able to use it with another buy to let property locally. Stay in London suburbs but also in central London, if the management will allow me to use the gym with one tenant staying there, as it has 2 bedrooms. 2 btl properties out of the PRS. So smaller personal tax to pay all around. Sell other 3 properties within the next 2 years. Management never listens.

• Jo Westlake
• 28 March 2024 11:54 AM

My flats are various ages. One is less than 2 years old. Two are ex Council and the other two were converted in the 1980s. I have extended the leases on both of those. One was a negotiated extension and kept the £30 ground rent. The other was a statutory extension because the freeholder refused to even speak to me, never mind negotiate. The ground rent was extinguished as part of the lease extension. None of them have leisure facilities or any fancy extras.

Outside London there are huge numbers of flats like mine. I fully accept London is different in many ways but London only has a relatively small percentage of the total UK housing stock. Housing policies need to be appropriate for the majority not just Londoners. Far too many policies are totally London centric and don't translate well to the rest of the country.

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I understand that the lawyers acting for some of the larger ground rent companies (and there are some very big companies involved) threatened to tie up the Govt for years in the courts on this.

Jo. I agree London is different and hammered left right & centre disadvantaged in every way far less return for the outlay. Far more rules costs and licensing since 2006 many parts of the Country are moaning now about getting their first, huge numbers of properties around the country are below SD threshold. I would love to swap Londons regulations for those in other parts of the country. I have had to license 4 times on most properties and 3 times on the rest even though I never let rooms it was Councils invented HMO’s money grab for themselves. £1’650.00 Application fee on last one plus thousands of associated costs, incidentally that only covers one inspection visit subsequent visits are chargeable…..

• Jo Westlake
• 28 March 2024 16:57 PM

I've licensed some of mine 4 times as that was a national policy.
You're right about the SDLT only applying in some parts of the country. It was interesting watching a property auction earlier this week. Stuff in the North East seemed to sell easily while quite a few in London and the South West failed to sell.

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Renting is definitely my future

You’ll own nothing and be a lot better off