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New leasehold reform sees end of charges excessive

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The end of toxic leaseholds has been announced by the Government – much to the delight of long-suffering homeowners.

Housing minister Robert Jenrick said the new laws are being introduced to banish the ‘scandalous pitfalls of leasehold’ and ‘put fairness back at the heart of the housing system’.

The changes have been widely welcomed as good news for leaseholders, who have long endured issues such as doubling ground rent and extortionate costs to extend their leases.

New legislation: The end of toxic leasehold homes has been announced by the Government

New legislation: The end of toxic leasehold homes has been announced by the Government

WHAT IS A LEASEHOLD PROPERTY?

A leasehold property has some key differences compared to a freehold home.

If you buy a leasehold property, you will need to know about things such as ground rents and lease extensions.

Here we explain some of the terms you need to know:

1. Leasehold

Unlike a freeholder, as a leaseholder you do not own the land the property is built on. A leaseholder essentially rents the property on a lease for a number of years, often between 90 and 120 years but it can be as high as 999 years.  

2. Ground rents

Ground rent is the rent paid under the terms of a lease by the owner of a building to the owner of the land on which it is built. The amount paid depends on the terms of the lease.

3. Lease extensions

A lease extension refers to a legal agreement that extends the term of an existing lease.

4. Buying the freehold  

If you buy a freehold property, it means you owns it outright, including the land it is built on. You are responsible for maintaining your property and land, so you’ll need to budget for these costs.

If you’re a leaseholder, you may want to consider buying your freehold. There are pros and cons of doing this, as while you may end up having more control, there will also be more effort involved. More information on buying your freehold can be found here.

The changes being introduced by the Government will enable homeowners to extend their leases up to 990 years at zero ground rent.

Miles Robinson, of mortgage broker Trussle, said: ‘We welcome the news that homeowners will be given further rights, enabling them to extend leases up to 990 years at zero ground rent.

‘It’s a significant change which will put a stop to unnecessary charges, and will make owning and selling a home easier and fairer for millions of people.’

Katie Kendrick, of the National Leasehold Campaign, said: ‘For far too long leaseholders have been told that it is their own fault for signing these toxic agreements, but this announcement proves how flawed this system is and is the start of the end for leasehold. 

‘We are delighted that Government has committed to delivering these reforms in this Parliament and urge them to strongly reject the fierce lobbying and delaying tactics they will get from the sector determined to keep the leasehold gravy train running.’

In recent years, the pitfalls of leasehold have left many of those who own this type of property unable to sell their homes.

This is because lenders have been increasingly nervous about lending on leasehold homes due to the increasing costs associated with them and buyers have been put off too.

We take a look at the Government’s announcement and what it could ultimately mean for leaseholders.

Why has the Government decided to take action?

The Government said reform of the leasehold system was required to ‘end some of the worst practices faced by homeowners’.

It claims that the changes are part of the biggest reforms to English property law for 40 years, and will lead to a new system altogether.

It follows a Law Commission report last year that claimed the ‘medieval’ leasehold system was not working. It followed years of campaigning for change, particularly after the scandal of new-build houses sold as leasehold rather than freehold emerged.

Announcing the changes, the Government said: ‘Under the current law many people face high ground rents, which combined with a mortgage, can make it feel like they are paying rent on a property they own.’

The changes will aim to reduce this financial burden currently placed on many leaseholders.

How much will ground rents be under the new law?

The Government says any leaseholder who extends their lease will ‘no longer pay any ground rent’ to a freeholder.

Ground rents can currently run into hundreds if not thousands of pounds a year, and can increase sharply over time depending on the clause in the lease.

The Government has said it will reduce ground rents to zero because this will allow those who want to own their own home to do so ‘without cumbersome bureaucracy and additional unnecessary and unfair expenses’.

How much could this save leaseholders?

The changes could save leaseholders ‘thousands, to tens of thousands of pounds’, the Government has claimed.

Exactly how much has yet to be revealed but the housing minister has said that he wants to reduce the expense of being a leaseholder.

Mr Jenrick said: ‘We want to reinforce the security that home ownership brings by changing forever the way we own homes and end some of the worst practices faced by homeowners.’

Do the changes mean a longer lease extension?

Under the current rules, leaseholders of houses can only extend their lease once for 50 years with a ground rent.

At the same time, leaseholders of flats can extend as often as they wish at a zero ‘peppercorn’ ground rent for 90 years.

The changes mean leaseholders will be able to extend their lease to a new standard 990 years with a ground rent at zero.

What will be the cost of extending the lease or buying the freehold?

Many leaseholders seek to extend their lease or buy the freehold. 

This can be for a number of reasons, not least to gain more control of the management of the property or to make it more attractive to potential buyers (as lenders will not lend on shorter leases). 

Extending the lease is also a condition of reducing the ground rent to zero under the Government’s reforms.

However, extending the lease is something that leaseholders will have to pay to do.

You may decide to buy the freehold first before then extending the lease to take the freeholder out of the equation altogether in the future. You do not have to buy the freehold to extend your lease.

The Government has said that it will ‘cost less’ to extend the lease or buy the freehold than previously – and the cost will be calculated via a new online calculator.

Where can I find the online calculator to work out these costs?

The online calculator will help leaseholders work out how much it will cost to buy their freehold or extend their lease.

However, it will not be introduced until the changes become law, and so leaseholders will need to wait until then to find out the cost.

The current calculation includes elements such as the ‘marriage value’, which increases the cost.

The marriage value is the increase in the value of the property following the completion of the lease extension, reflecting the additional market value of the longer lease.

This element is being abolished as the Government has described it as a ‘prohibitive cost’ and wants to ensure that the calculation is ‘fairer, cheaper and more transparent’.

Is commonhold still an option?

The housing minister wants to increase the number of commonhold agreements, a little-known form of ownership that allows residents of apartment blocks to maintain it themselves or employ a maintenance firm to do it.

It would mean that if the company fails to do the job properly, the residents could sack them.

The Government is establishing a Commonhold Council to help encourage homeowners and the market to take up commonhold. 

When will the new law be introduced?

Leaseholders welcomed the news and called for the changes to be passed into law immediately.

Leaseholder Jim Iillingworth said: ‘I welcome the announcement. The Government has proved with Covid and Brexit that it can pass legislation in hours and days. Why should leasehold reforms take any longer?’

In reality, the timetable is likely to take months and could possibly run into next year.

Mr Hayward, of Propertymark, explained: ‘Laws will be introduced when the parliamentary timetable will allow. But they will want to move soon on this ahead of the next General Election to appeal to the electorate.’  

Leasehold expert Bernie Wales, of BW Residential, said: ‘The changes are good news for leaseholders. Leaseholders have waited a long time for them and let’s hope the Government will bring them into law sooner rather than later.’

The Government has confirmed that legislation will be brought forward in the upcoming session of Parliament to set future ground rents to zero. This is the first part of seminal two-part reforming legislation in this Parliament.

How many people will be affected by the new law?

Nearly 4.5million leaseholders could be ‘tens of thousands of pounds’ better off, according to the Government.

Will ground rents also be reduced on retirement homes?

The changes will include measures to protect those living in retirement leasehold properties, which are specifically built for older people.

The Government says buyers of these homes will now have the same rights as other homeowners.

However, Mr Hayward added: ‘While we welcome the Government’s initiative to reduce ground rents to zero for all new retirement properties, we would argue this needs to be extended to all retirement properties to create a level playing field.’

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Godwin submits plans for Dorset mixed-use development (GB)

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Godwin Developments has submitted a planning application for Woodbury Park, a brand-new commercial development located at a prominent 4.85-acre site in Bere Regis, Dorset. Proposals include four purpose-built drive thru and drive to roadside retail units, with renowned restaurant brands PopeyesStarbucks and McDonald’s already lined up to take space, which has been designed to their specifications.

 

The scheme will also feature a 12,000ft² block of up to eight units, with associated parking and turning facilities. The units will be two storeys high, with the flexibility to combine into larger floorplates, if required by potential tenants. The block will be built speculatively and will target BREEAM Very Good, including features such as air source heat pumps, low energy lighting and highly efficient building fabric, to name a few.

 

Situated off the Townsend Roundabout at the northern entry point of Bere Regis, the site benefits from a high passing traffic flow of over 27,000 daily vehicles. It occupies a key location at the intersection of the A31 and A35 alongside the main arterial route connecting Poole and Bournemouth to Dorchester.

 

The Woodbury Park scheme will further Godwin’s commitment to local regeneration and job creation by enabling up to 250 new employment opportunities. Roles are anticipated to be primarily in retail, distribution and logistics, as well as services, manufacturing, technology and the creative industries. Local people will also benefit from the inclusion of several EV charging points, the first in the area.

 

Claudine Tracey, Development Manager at Godwin Developments, said: “The site’s high traffic flow, lack of similar offering close by, and proximity to existing Shell garage and trade park make Woodbury Park a sought-after location for a range of occupiers – including coffee and quick service restaurant brands. We are also delighted to be delivering the UK’s first Popeyes drive thru as the company expands its footprint in this country. In addition, our development will deliver a variety of local employment opportunities for Bere Regis through the provision of flexible industrial and logistics space suitable for new and existing businesses. The scheme at Bere Regis showcases Godwin’s unique capability to successfully combine industrial and roadside retail to maximise a site’s potential through complementary uses.”

 

Stuart Pratt, Director at Godwin Developments, commented: “The recent boom in takeaway food consumption and hyper-local convenience shopping is bringing ever more exciting brands to the roadside retail sector. At the same time, demand for industrial and logistics space is continuing to grow with units of varied sizes – including trade parks – experiencing a substantial lack of supply. For these reasons interest from investors into both sectors has been very strong in the past year; and we expect the trend to continue throughout 2022 on the back of strong consumer fundamentals.”

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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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