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Put your mind back a few weeks when Michael Gove donned a spinning tie like a clown and announced he was going to get rid of the tenancy. Well, those of us with the least knowledge of English property law did. Quite a few Daily Mail readers have asked, “Why buy a horrible apartment anyway? Home ownership should be limited to those who can afford a charming cottage with a fast commute to Amersham.” I think he was asking.
As anyone in the real estate industry knows, it’s not in the same Bunny Boiler League as technology, but leasehold deals are a bit of a tricky mistress. Due to recent changes from lenders, more and more law firms are refusing to do leasehold work. This is a bit of a problem for first-time buyers, especially those who need to get a mortgage. Yes – most of them. Especially since these law firms are also refusing new construction, coinciding with the end of the “buy assistance” scheme.
Given that these buyers are the engines of the real estate market, this toxic combination could be the reason why D-Ream’s financial projections “things can only get betterEven more dreamy than Tony Blair promised all those years ago?
what’s happened?
Proposing to get rid of the tenure is an easy win for politicians. He would have been re-elected in a landslide, in the same way that William Gladstone promised to get rid of smallpox in Victorian times. Few people think, “What’s wrong is sharing a poorly renovated Edwardian terrace with Airbnb travelers playing Spice Girls tracks all night long.” But the reality of the real estate market is that apartments, and even to some poor misunderstood souls, housing are leaseholds, with all the problems that come with them.
The legal issues relating to leasehold rights are extensive and complex. One of the most common questions agents ask us during an Insights training session is why it seems like every leasehold transaction requires a change deed. The inevitable continues and why does it take so long. A deep resigned sigh follows when the inevitable answer of “it depends” comes back.
The challenge is that tenancy work requires reaching out to more people. From Bob the Builder, who installed that illegal skylight years ago, to its management agents, freeholders and local authorities. First-time buyers looking for alternatives are disappointing given that many attorneys do not charge the fees necessary to hire the right quality attorney to understand the job.
The final straw came with recent changes to building safety laws that can be summarized as follows. Five stories or if he’s looking to buy a flat on a property over eleven meters, as Liam Neeson of “Taken” puts it,Good luck”. If you’ve seen the movie, you know it didn’t end well. This is really a problem. Because if you take a walk around town, you will find many of these flats.
How can I fix this?
It’s a tough one because the problem won’t be solved overnight, much like the exposed cladding problem in the Grenfell Tower disaster left thousands of properties unsellable. Looking at what lawyers are saying online, it doesn’t look encouraging, apart from the usual whining that paper is really good and tech is really bad. Faced with the challenge, more and more law firms are saying, “No. And we’ll take the ball home, too.”
This means that options will be limited to the few companies that choose to carry out the challenge, possibly leading to higher prices and higher backlogs. It can seriously affect scale.
Voices are mounting that lenders will change their stance on these properties, but addressing this will require a concerted effort from all sides. But despite the time it took, it’s encouraging that the government intervened in the crud problem, so perhaps it could happen again.
We know it’s purely hopeless to expect any help from the government, but there’s always the chance that Michael Gove will run into Harry Potter at King’s Cross and trade his spinning necktie for a magic wand. .
Peter Ambrose is the Founder and MD of The Partnership, a haulage specialist.