KC3 & the Right to be Free
Monday 20th November 2023
KC3 & the Right to be Free
Holy Moly, there is a lot going on in the political world today, so I will try to focus on property matters - for now.
King Charles III (KC3) has waited over 70 years to deliver his first King's Speech. With the thin gruel it contained - no wonder he looked, and sounded, so hacked-off.
Two property topics made it into proposed legislation the Government hopes to enact before it is finally kicked out sometime next year:
1. The Renters ‘Revenge’ Bill.
This ill-conceived piece of legislation purports to help tenants but in fact does quite the opposite. Civil servants appear to have fallen hook, line, and sinker for lobbying by shouty tenant groups such as Generation Rent and Shelter. The net effect of making life difficult and unprofitable for landlords - particularly private landlords - is to drive them to sell. We are seeing this right now.
The diminishing number of available properties drives up rents for tenants. We can and do, find good buyers for these properties but they tend to be wealthier people. Huge deposits and higher mortgage rates mean the tenants who had been renting couldn’t possibly afford to buy them.
2. The Leasehold & Freehold Bill.
This is a much watered-down version of original proposals to abolish Leasehold ownership altogether and replace it with the - so far unloved - Commonhold system. It was always going to be nigh on impossible to abolish existing leases or to force freeholders to give up the premiums to extend leases.
Theft of real value from Freeholders would be contested through the courts to the highest level by the institutional owners including investment trusts, pensions and charities like the Welcome Trust. By what rights should a non-resident owner of a short lease flat be gifted a long lease at the expense of a UK based medical research charity? It is unconscionable.
3. Freeholders and their Rip-Off Managing Agents.
The complexity of current rules gives room for rogue operators to massively abuse leaseholders. Consequently, foul individuals are attracted to the sector and all suffer from their borderline illegal, and certainly revolting practices.
To me, the best promise is to force Freeholders to be more transparent with service charges and to abolish Managing Agents taking fat and opaque commissions on buildings insurance policies. Hate that!
In mixed use buildings where a building has over 25% in commercial use, residential leaseholders currently have no rights to buy the freehold or appoint their own managing agents. A pleasing proposal is to reduce the threshold at which residential leaseholders can take control to 50%.
I also applaud the promise to make lease extensions for 990 years rather than 90 years and to simplify the process, thereby lessening the cost to leaseholders.
If you have any questions on the legislation or if we can help with your property do contact me: patrick@stanleypropertylondon.co.uk.
Until next time….
PB
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