Commonhold flats a solution to leasehold scandal

The leasehold scandal has brought shame on some housebuilders and caused misery for those who bought homes from them.It’s a practice that is waning due to government intervention and a firm promise to tackle this licence to boost profits at buyers expense.The government has promised legislation to reduce ground rents on future leases to zero and to ensure that new houses will be sold on a freehold basis.In his first Prime Minister’s Question Time, Boris Johnson also spoke in support of a campaign to help existing leaseholders, who are struggling with the rising cost of ground rents and who are finding it difficult to sell their home as a result.However, the proposed new legislation won’t apply to flats, which are traditionally leasehold. It’s one of the reasons why Stewart Moxon of Hopton Build has decided to lead by example and pioneer a fairer way of selling apartments.The five flats at Park View, his development on Halifax Road in Liversedge, are being sold as commonhold. This means that the owners have the freehold to their apartment while the rest of the building is owned by them jointly. They decide on everything from how much to save for repairs, maintenance, improvements and insurance to how much to spend“There is no lease, no ground rent, no permission fees and no uncontrolled management charges. We are selling homes not leases,” says Stewart.It is the first new-build apartment development in England in decades to do this after Stewart sought advice from anti-leasehold campaigner Katie Kendrick, founder of the National Leasehold Campaign.“I’d read about the leasehold scandal with uncontrollable ground rents and I’d had issues in the past with a leasehold apartment I bought. The management charges were a rip-off so I wanted to know if there was a more honest and fair way of ownership,” he says.“I contacted Katie to see and she was a great help. She put me in touch with The Law Commission and another campaigning group, The Leasehold Knowledge Partnership, which are pushing for commonhold to become the norm for flats.”

The new commonhold apartments at Park View

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Three of his apartments are already sold and two, two-bedroom flats are on the market from £135,000.“We could have made a bit more money if the apartments were set up as leasehold but it’s not all about money. You can still make a profit and do what is morally right,” says Stewart.He is hoping that his venture will encourage other developers to follow suit, especially as his development has ironed out any potential issues.“Commonhold is now almost unheard of so when we registered the properties with the Land Registry they didn’t know what to do and that was holding up sales. That matter was brought up in the House of Commons and the Land Registry are now informed,” says Stewart.

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Hopton Build also discovered that, thanks to their rarity, commonhold properties weren’t eligible for the Help to Buy scheme.“That’s been sorted out too. We have effectively piloted commonhold for use on new-build apartments and now everything is no in place for other developers to follow our lead. It’s the right thing to do and we have shown that it can be done. I’d really like to see the government legislate so that all new-build flats have to be commonhold.“The Law Commission is behind this and many others are now pushing for it to happen. There is no good reason why it shouldn’t,” says Stewart, who also supports the National Leasehold Campaign’s bid to compensate those who bought new-build houses with onerous leases attached.The Competition and Markets Authority is to investigate the mis-selling of leaseholds.Stewart Moxon says: “It is all set to be the new PPI as many people weren’t told of the implications that these new-style leaseholds bring and the Advertising Standards Authority is also looking at banning estate agents from using the term ‘for sale’ on all leasehold homes and replacing it with ‘for lease’, along with a list of all the associated costs.”In the past, leasehold homeowners were charged a peppercorn ground rent but more recently, some developers have inserted clauses setting it at £200-£400 a year with capacity to double every ten years. Charges for permission to extend or make changes to the property were also included in the small print.It is estimated that around 100,000 homebuyers are trapped in contracts with spiralling ground rents creating a blight on the property. A number of major lenders have decided not to grant mortgages against homes with punitive ground rent clauses and conveyancers now warn would-be buyers against them.*The commonhold apartments at Park View, Liversedge, are for sale with