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In this three-minute read, we look at England’s new leasehold reform package.
What will the new leasehold reforms, announced last week, deliver for leasehold property owners in Havering? Here’s what we know so far.
Now, ‘leasehold reform’ may not be the sexiest of subject matters, but if you are one of the 4.3 million people in England who owns a leasehold property, don’t doze off as these changes could significantly impact you.
England’s medieval leasehold laws are loathed by leaseholders who have dubbed them ‘fleecehold’ laws. Key gripes include:
- The cost of lease renewal or freehold purchase. This can be tens of thousands of pounds, or even more. If negotiations with the freeholder break down, the leaseholder can go to a tribunal, but this takes time and can be expensive.
- Escalating ground rents. In the worst cases, the ground rent on a leasehold house doubles every ten years, leaving the leaseholder with an ever-growing bill and making it impossible to sell the property.
- Exorbitant service charges for maintaining communal areas and gardens at apartment blocks.
- Freeholds being sold off to a cash-hungry third party.
Here’s a rundown of the proposed reforms.
No 1: Owners of leasehold homes or flats will be given the right to extend their lease by a maximum term of 990 years at zero ground rent. (Currently, leaseholders of houses can only extend for 50 years with a ground rent while leaseholders of flats can extend as often as they wish at a zero ‘peppercorn’ ground rent for 90 years.)
Benefit: In theory, the change would provide security and eliminate ground rent. However, it’s not yet clear how much it would cost to secure a 990-year lease so it’s impossible to do a cost versus benefit analysis.
No 2: Owners of leasehold flats in apartment blocks will be able to shift to a Commonhold Agreement model.
Benefit: Flat owners could take control of the upkeep of their building, ending rip-off maintenance charges. Getting all the relevant parties to agree to move to a Commonhold Agreement may be difficult though.
No 3: Introduction of an online calculator to simplify determining the cost of buying a freehold or lease extension.
Benefit: This would take some of the hassle out of the negotiation process but much depends on the formula used to calculate costs.
No 4: The abolition of ‘marriage value’.
Benefit: ‘Marriage value’ is a rather cumbersome rule that has probably caused a few divorces in its time. It means that if a lease falls below 80 years, the cost of renewing it shoots up.
When will these changes be introduced?
Legislation regarding change No 1 will be brought forward in the upcoming session of Parliament. The rest will take longer to realise. (If you’d like to be kept informed on the progress of these reforms, we’ll be monitoring the situation closely, so please get in touch with us here at Accord.)
To learn more about the leasehold changes and how they could affect the value of your property, get in touch with us here at Accord Sales & Lettings.
Copyright 2021 Accord Estates Ltd
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In this two-minute read, we look at the benefits of building a good relationship with your tenant.
Type' landlords are' into Google, and the words that come up next are pretty unflattering.
According to the global digital giant, the most commonly searched phrases are 'landlords are parasites' and 'landlords are leeches'.
A few other choice terms – that we're too polite to use here – come up as well, but you get the drift.
There is a common public perception that all landlords are modern-day Fagins, renting out flea-ridden hovels at rip-off prices.
This raises two questions:
- Is this a fair and accurate description?
- Does it matter? Being a landlord is about providing rental accommodation, not winning a People's Choice Award.
You can probably guess our answer to Question 1. The suggestion that landlords are universally evil is blatantly untrue. There are some unscrupulous characters in the industry, but they are in the minority. There are many good landlords in Havering – we work with many of them every day – who take their responsibilities seriously. But since when did a tenancy running smoothly make the news?
So now we get to Question 2 – who cares if landlords are hopelessly misunderstood? Well, we certainly don't think the negative stereotype helps.
Some tenants adopt a bunker mentality that makes every conversation that little bit more difficult. It's much better if the lines of communication are open and positive. That way, if a problem does occur, the tenant is more likely to be patient while the landlord addresses it.
To build a positive relationship, it's essential that landlords:
- Be on top of all routine maintenance. Being sluggish when it comes to keeping the property in good condition builds resentment.
- Respond promptly to a tenant when they get in touch. Making them wait a few days because you're snowed under with other commitments is unprofessional.
- Carry out regular inspections. Misunderstandings are less likely to happen if you stay in touch.
In our experience, ongoing dialogue can prevent messy legal disputes. And the last thing you want is for the relationship to break down and for all communication to take place via lawyers.
If you can't dedicate the necessary time to managing a good relationship with your tenant, a good letting agent can do it for you – and save you money in the long run.
To find out how the Accord team is helping Havering landlords manage their properties through the pandemic's challenges, get in touch.
Copyright 2021 Accord Estates Ltd
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In this two-minute read, we look at the increasingly sophisticated scam that fraudsters are using to separate homebuyers from their hard-earned cash.
Even though we’re in lockdown, criminals are still out there trying to swindle people, so if you plan to buy a new home in Havering in 2021, please heed UK Finance’s latest warning about an email scam that is on the rise.
Here’s how it works. Fraudsters hack into the system of a conveyancing firm and monitor their emails. When a deal nears completion, they send the buyer an email that looks like it has come from the conveyancing solicitor. There has been an administrative error, it says, and the bank account details for the transaction have changed.
The buyer, anxious to secure their dream home (and, in the current climate, take advantage of the Stamp Duty holiday), follows the instructions and sends the funds – to a fraudster.
UK Finance, which promotes secure financial transactions, says this type of crime is on the rise with £16.2 million lost in the first half of 2020. While it’s not the largest type of scam in the UK, it is particularly ruthless as large sums of money are involved; one poor soul lost £300,000.
Tips to avoid being scammed
- Don’t assume that fraudsters write or speak in a certain way – their emails can be polite and polished and feature logos and letterheads that are perfect copies of the real thing.
- If you have even a quiver of doubt, step back from the situation and take a breath. Buying a home can be a fraught process and it’s easy to get caught up in the moment.
- Never send money without verifying the authenticity of the account information – call, or even better, visit your solicitor’s office to confirm the details. (Note: Don’t call the number listed on the invoice that has raised your suspicion, this could be a fake.)
- Work with people you trust. Go with conveyancing solicitors and estate agents with longstanding reputations.
Fraud red flags for homebuyers
- Emails that notify you of a change of bank details.
- Duplicate invoices, one will be real, one will be fake.
- Pressure to act ASAP. Fraudsters often strike on a Friday afternoon. They’re hoping you won’t realise your mistake until after the weekend (and they’ve had time to move the money on).
- A change – no matter how minor – to an email address. Often the fraudulent email will come from an address that is similar to the legitimate one.
Here at Accord Sales & Lettings, we’re here to support you through the homebuying process. We’re happy to provide expert advice and share our years of knowledge and experience.
Copyright 2021 Accord Estates Ltd
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In this two-minute read, we look at why landlords who self-manage their buy-to-lets can never really put their feet up at Christmas.
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