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Abolishing ground rents on new build properties moves closer

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Abolishing ground rents on new build properties moves a step closer as new Leasehold Reform Bill is discussed in Parliament

  • The Leasehold Reform (Ground Rent) Bill is seeking to abolish ground rents
  • Developers can sell new flats with ground rents until the bill becomes law
  • The date that the bill will become law is unknown but could be within a year 

Abolishing ground rents on new leasehold properties has moved a step closer this week to becoming reality.

The proposed change is part of the Leasehold Reform (Ground Rent) Bill, which is currently being discussed in Parliament.

The bill bans ground rents on new leasehold properties and, in doing so, cuts off the potential income stream enjoyed by freeholders.

But it will not stop ground rents for those who already own leasehold properties and are hit by rising payments that can make them hard to sell. 

The Leasehold Reform (Ground Rent) Bill is seeking to abolish ground rents

The Leasehold Reform (Ground Rent) Bill is seeking to abolish ground rents

Liam Spender, a trustee of the Leasehold Knowledge Partnership, and a senior associate at Velitor Law, explained: ‘The bill is incredibly important. It abolishes ground rents and therefore cuts off the income stream that underpins the current leasehold system.

‘If investors are not incentivised to buy up leaseholds for their ground rents, then this removes the risk they will appoint managing agents who see leaseholders as little more than cash cows.

‘Once that happens there is a prospect that buildings may start to be run in the interests of people living in them, as opposed to the interests of investors who see them as nothing more than accounting entries.’

The Lords began considering the bill in detail this week and experts suggest that it could reach the statute book within a year.

The new law gives local authorities powers to levy fines of up to £5,000 and require the repayment of any prohibited ground rent.

However, the bill is likely to be amended as it makes its way through Parliament before becoming law.

The exact date that the bill will become law is unknown and it will still be possible for developers to sell new flats with ground rents until it does.

There is a risk that millions of properties that currently carry ground rents will be valued at less than new properties that do not carry a ground rent

There is a risk that millions of properties that currently carry ground rents will be valued at less than new properties that do not carry a ground rent

Liam Spender is a trustee of the Leasehold Knowledge Partnership

Liam Spender is a trustee of the Leasehold Knowledge Partnership

Any buyers considering a new build flat with a ground rent should ask for the ground rent provision to be deleted due to the upcoming ban.

It is unlikely that ground rents on existing leasehold flats will ever be abolished, as landlords may consider challenging it under human rights laws, arguing that such a move is taking their property away from them.

It means there is a risk that millions of properties that currently carry ground rents will be valued at less than new properties that do not carry a ground rent.

However, Mr Spender added: ‘That scenario is likely years away from becoming reality. It will take decades before there are enough properties without ground rents to materially affect prices of properties with ground rents.

‘Cladding issues and doubling ground rents are more immediate threats to prices.’

How to buy your freehold 

One way of abolishing the ground rent on your existing leasehold property is to buy the freehold and then to extend the lease.

If you’re considering buying your freehold, there are some initial questions that you’ll need to ask. 

These include whether the building you live in has the right criteria, and entering a ‘participating agreement’ with the rest of the residents who are interested in joining you in the purchase of the freehold.   

Here are seven steps to buying a freehold if you own a leasehold property: 

1. How many tenants in the building are interested? Find out how many tenants in the building may be interested in buying the freehold with you. A majority will need to agree to participate. 

2. If there is something obvious that prevents you moving forward, you do not want to incur any further costs pursuing the freehold purchase. For example, your building may not be self-contained, as defined in the legislation, or you may not have enough qualifying tenants. Specialist advice is required.

3. Instruct a surveyor to value the freehold to find out how much the freehold value could be. 

4. Nominate a representative to liaise with the professionals can be a way of keeping costs down. If 10 people all ask the same question, you don’t want to pay for the same answer to be given 10 times. 

5. Enter an agreement. Ask participants to enter into a ‘participation agreement’ so that all the tenants are contractually bound together to proceed.

6. The leaseholders looking to participate in the freehold purchase should band together to set up the company, buy a share at £1 and then loan the company the money needed to fund the transaction. 

7. Be prepared for the process to take many months and often longer than a year. 

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Barings and HBD secure planning for London logistics scheme (GB)

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Barings and HBD have secured detailed planning for a strategic logistics scheme in Rainham, London, transforming a 20-acre brownfield site. The new development, Momentum London, is being delivered by Barings and HBD in a joint venture partnership. It will create 381,814ft² of new logistics and industrial space across four units ranging from 41,000 -171,000ft².

 

The scheme will target Net Zero Carbon, BREEAM “Excellent” and an EPC “A+” rating. This is being achieved by dynamic design, careful consideration of materials, zero use of fossil fuels, maximizing photovoltaic solar panels, battery storage and intelligent building systems. The units will be 100% EV ready, including passive fleet charging to the yards.

 

The logistics park will be set in landscaped environment with picnic and public areas, as well as direct access onto the Thames Cycle Path, so that it brings further social benefits to the area. Positioned on the River Thames, with potential for jetty access, Momentum will offer an easy stepping stone into Central London and out via the A13, just minutes away.

 

Darren Hutchinson, Head of UK Real Estate Transactions and Managing Director at Barings, said: Momentum London will be a strategically located logistics scheme with strong environmental and social credentials, beneficial both to future occupiers and the communities around it. Logistics is one of Barings’ preferred investment sectors and Momentum London exemplifies the kind of developments we’re seeking, with a keen interest in exploring joint ventures like this one with HBD.”

 

Simon Quine, Senior Development Surveyor at HBD, said: “Industrial and logistics space remains in very limited supply across London, particularly larger distribution units. Momentum will plug that gap within the M25 and provide modern, sustainable logistics and distribution space to serve London and the wider South East market. Landscaping and wellness have been thoroughly considered, with careful design considerations and enhancements to the Thames Foot and Cycle path, which we hope will help occupiers to attract and retain staff.”

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Mirrored furniture trend can create the illusion of space in your home

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Mirrored furniture provokes strong emotions. Some see it as the epitome of bad taste, flashy and bling. Others know that mirrors have magic powers.

A mirrored table or cabinet makes a room or a hallway appear more swish and spacious. It’s a trick that bars and restaurants employ to ensure their establishments appear roomier and more inviting — and they can add lustre to your home, too.

Choosing a piece of mirrored furniture also sends out a sign that you are aware of one of the year’s trends — the return of Art Deco, the influential style that emerged in the 1920s. 

Reflections: A mirrored bedside table. The power of the mirror to create an impression has been recognised for centuries

Reflections: A mirrored bedside table. The power of the mirror to create an impression has been recognised for centuries

It blended forms that celebrated modern machinery with decorative elements drawn from Greco-Roman culture and nature. 

The mirror was a favourite material, used on the surfaces of furniture and walls to supply a shimmering silver and gold effect.

Probably the most famous piece of Art Deco architecture is New York’s Chrysler Building. Completed in 1930, its sunburst-patterned stainless steel spire remains one of the key elements of the Manhattan skyline.

Art Deco console tables, drinks trolleys and other items from the era of the building’s construction sell for thousands on auction sites such as 1stdibs underlining the growing appeal of this aesthetic. 

Jamie Watkins, the co-founder of fabric and wallpaper company Divine Savages, explains Art Deco’s allure for a new audience.

‘Art Deco, with its bold geometrical patterns was such an iconic period for design: it’s synonymous with glamour and luxury.’

The resurgent popularity of Art Deco is also based on its practicality: a mirrored piece works with almost any interior, adding interest and depth.

The power of the mirror to create a wow impression has been recognised for centuries. 

Examples of this technique include the round mirror on the wall behind the bride and groom in Jan van Eyck’s 1434 Arnolfini Portrait in the National Gallery. It sends out the message that the couple are discerning — and wealthy.

Cheers: B&M's £25 oval drinks trolley with two mirrored shelves

Cheers: B&M’s £25 oval drinks trolley with two mirrored shelves

The hall of mirrors in the palace of Versailles was designed to be a place of beauty, but also to display the financial resources of Louis XIV, the Sun King. Mirrors were a luxury item until an inexpensive manufacturing process was invented in the 1830s.

In 2022, it is possible to pick up mirrored pieces for under £100. B&M has a £25 oval drinks trolley with two mirrored shelves that would lend an air of Thirties elegance to any gathering. The £94.99 Ellison serving cart (a U.S. term for drinks trolley) from Wayfair has a similar vibe.

If you believe that the right mirrored trolley would save you money on trips to bars, the larger £144.95 gold oval mirrored trolley from Melody Maison could be the thing.

A mirrored cocktail cabinet will dazzle guests. The £1,200 Primrose & Plum champagne and gold cabinet has a Jazz-Age feel.

The £299 Venetian sideboard from Furniture Market, meanwhile, is a more modestly priced way to conjure up the party spirit of the Roaring Twenties.

The show flats of apartment blocks are often equipped with mirrored cocktail cabinets containing bottles of spirits and crystal glasses. This makes buyers dream of dinner parties, with a prelude of aperitifs, but also serves to make the apartment appear even roomier.

A console table in the hall also creates an illusion of space which can be amplified by the addition of a lamp. HomesDirect365 has a range in the style of almost every era including Art Deco, Regency, the 1960s and the 1970s. Prices start at £233.

The bedroom is often the most cramped room in either a house or flat which is why this can be the best place to experiment with mirrored furniture. 

The desire to preserve family harmony is another reason. The other members of your household may prefer the kitchen and living room to be slick and understated, seeing anything mirrored as excessive.

In the bedroom, however, you can indulge your decor fantasies. Habitat has the one-drawer Hepburn bedside table for £76.

Next offers the antique effect Fleur bedside table which costs £225 for the one-drawer version and £275 for the two-drawer version. 

The Fleur is also available as a six-drawer chest for £599 or a £1,150 double wardrobe if you seek to waft around your bedroom channelling your inner 1930s Hollywood screen siren. 

Dunelm’s Venetian mirrored dressing table also offers a chance to live out your dream of silver screen stardom (£449).

If mirrored furniture has brought out your party animal, kindling a passion for Art Deco in every guise, Divine Savages offers Deco Martini wallpaper whose design is based on the geometric forms, with a hidden Martini glass within the print (£150 per roll).

Some of your guests may not be too busy checking out their reflections on the doors of the mirrored cabinet to notice this subtle and witty detail in the wallpaper.

Savings of the week! water jugs… Up to 52% off 

The Sandvig hammered-glass jug from made.com is half-price at £22

The Sandvig hammered-glass jug from made.com is half-price at £22

Sitting outside on a sunny afternoon is already delightful. But it is even more enjoyable if you are sipping on a cool drink or an iced coffee from a generously sized jug, or maybe even a Pimm’s. The arrival of the July sales means bargains abound.

If you prioritise practicality, Ocado’s textured lustre plastic picnic jug has 33 per cent off at £8.

The price of the pleasingly geometric plastic smoky-grey Prism jug from Wayfair is 16 per cent off at £10.10. 

If you would like to feel as if you are in the south of France, John Lewis has the plain glass Arles wicker-wrapped jug. It is reduced from £25 to £12, down 52 per cent.

Wanting something more elegant that you can also use for flowers? The Sandvig hammered-glass jug from made.com is also half-price at £22.

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VGP acquires French logistics development

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VGP NV and VALGO signed an agreement to purchase 32 hectares of land that housed the former Petroplus refining units in Petit-Couronne, near Rouen. This brownfield rehabilitation project is fully in line with VGP’s core expertise and strategy. Thanks to the six years ownership of the site by VALGO and its expertise in asbestos removal, soil and water table decontamination, in-situ waste treatment and development, this area has now become a suitable site for the development of new industries and business activities.

 

On the banks of the river Seine and close to the A13 highway, the 32-hectare area of land offers its future users a highly strategic location. Following the extensive depollution work carried out by VALGO, the site is now ready for redevelopment. VGP expanded into France only a few months ago and is delighted to start its French business activities in the dynamic Rouen Normandy metropolis area, via this major project. In total, around 150,000m² of land are set to be redeveloped to accommodate industrial and logistics projects, with work due to begin in 2023.

 

Jan Van Geet, CEO VGP, said: “VGP is delighted to begin its business activities in France on a site as exceptional as this one, with strong economic and environmental ambitions that are shared by both our partner, VALGO, and the local authorities. As the rehabilitation of brownfield sites is at the heart of our business, this project is a great opportunity for us to deploy our industrial and logistical know-how. The uncertain geopolitical situation and the rise in transport prices mean that companies are increasingly looking for local support to start their business. In this context, we strongly believe in the relevance of our integrated model with a long-term vision. We are now eager to get to work and bring all the expertise of the Group to the project.”

 

Francois Bouche, CEO VALGO, commented: “We are delighted that this huge piece of land has been sold to a major investor with experience in redeveloping brownfields in Europe. However, I would first like to celebrate the work of the men and women who worked so hard to make this colossal project a success. It took more than 1 million hours and over €60m in investment by VALGO to turn the page on over 80 years of refining on this site, which already employs 600 people.”

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