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LEASEHOLD ROADSHOW ANNOUNCED TO HELP CRAMLINGTON RESIDENTS

ByLambert

Oct 9, 2018

Cramlington residents face bills of thousands of pounds if they want to move or re-mortgage their homes.  

They live in some of thousands of houses and flats which came with 99 year leases when they were built in the 1960s, 70s and 80s as Cramlington was developed into a new town.   

Now – according to one of the town’s leading estate agents – some of the main mortgage providers will not lend money on a property with less than 70 years left on its lease.  

The only options for residents are to pay to extend the lease on their house or buy the freehold – and that could cost up to £13,000.  People living in flats face an even bigger cost – around £20,000 – to extend the length of their leaseholds. 

Last year the government said it would ban leaseholds on most new houses built in England and it instructed the Law Commission, the law reform body, to recommend changes for existing leaseholds.  

Last month the Law Commission announced its initial recommendations which it said would make it easier and cheaper to buy freeholds or extend leases.  It will submit its final proposals after a further consultation period which finishes next month.  

“Reform has been a long time coming but I still need to be convinced that it’s going to be for the benefit of the real victims of a system where the freehold owners can arbitrarily increase the cost of a leasehold,” said Paul Reynolds, who owns the Renown estate agency and is a member of The Cramlington Development Trust.  

The Trust – which aims to bring long-term social, economic and environmental benefits to the town – has organised a Leasehold Roadshow to help the hundreds of Cramlington residents who now face the prospect of hefty bills even if their leases have decades left.  

“Any change in the law will not happen overnight. In the meantime there are many people who are in a very difficult position and a lot of other residents who have no idea what’s going to hit them,” said Mr Reynolds, who will be speaking at the event alongside prominent leasehold campaigner Louie Burns, lawyer Chris Last of Leasehold Law and Joanna Stephenson from Leasehold Valuers.  

“If you have a leasehold property you don’t own the house, just the right to live in it,” said Mr Reynolds. 

“What you’re going to be charged for your freehold is pot luck.  You could be living in the same style of house on the same estate.  The freehold can be sold on at any time and the cost could double.” 

He added: “People with time and money can take steps to get the true value of their freehold.  But many people don’t have that luxury – particularly if they need to sell their house in a hurry.  

“I want to see a change in the law to make it easier for people to buy their freehold at a pre-determined and fair price.” 

The Leasehold Roadshow takes place on 24 October at the Cramlington Village Club.  Free advice sessions run from 3pm-6pm. Louie Burns’ presentation starts at 7pm and will be followed by a Question and Answer session.   

·         One Cramlington resident discovered the true cost of leasehold as he planned to take out a new mortgage on his house.

 “We had no intention of selling our house but we were petrified that the cost of the freehold was going to go up and up and we knew that we wouldn’t be able to re-mortgage unless we bought it,” said the resident who did not want to be named.  

Alarm bells were already ringing.  A friend who lived around the corner needed a quick sale.  But his prospective buyer would not finalise the deal until the he had bought the freehold – and that cost £13,000. A near neighbour, living in a similar house, had to pay £11,000 to the same freehold company.  

The resident contacted his freehold company and first had to pay a fee of £50 just to request the price of the freehold.  

Then he was told that he had breached the terms of his lease by installing solar panels – supplied free by the government to many homes in Cramlington – and he would have to pay £1200 because he was running a business from home.  The resident, who said he had rung the company to tell it about installing solar panels, said he had never sold electricity through the “feed-in-tariff”. 

Concerned over his initial dealings with the freehold company, he decided to engage the services of a valuer.  “He took about six months, back and forth, and managed to get rid of the £1200 solar panel bill – they waived that completely – and our total bill for the freehold was £4,500.  Compare that with people paying £13,000 or £11,000 in houses literally down the road,” he said.  

His experience has made him extremely cautious about buying property in the future in the town. “If I bought another house in Cramlington I wouldn’t touch it unless it was freehold or I would have to knock £20k off the price I would pay because of the cost and the hassle,” he said.

 

By Lambert