Leashold reform bill. Passed into Law on the 24th of May

[Bald-Eagle22]

For any exiting leaseholders out there . Yet another manifesto promise broken.

Nothing to benefit exixting leasholders with onerous or extortionate ground rents . Your all going to become mortgage prisoners when you ground rents go up .

Yet to see what Labour are promising.

Leasehold reforms become law

The Leasehold and Freehold Reform Act has become law today.

www.gov.uk

 

[Shoza]

For any exiting leaseholders out there . Yet another manifesto promise broken.

Nothing to benefit exixting leasholders with onerous or extortionate ground rents . Your all going to become mortgage prisoners when you ground rents go up .

Yet to see what Labour are promising.

Leasehold reforms become law

The Leasehold and Freehold Reform Act has become law today.

www.gov.uk

That’s not quite right. The Act makes it much easier and cheaper to complete a lease extension. A lease extension cancels any ground rent, so whilst not perfect, it’s a step in the right direction.

 

[Bald-Eagle22]

That’s not quite right. The Act makes it much easier and cheaper to complete a lease extension. A lease extension cancels any ground rent, so whilst not perfect, it’s a step in the right direction.

Well see , as the bill has not passed in its entirety I'm about to endeavour on a Statutory lease extension.

I have s 950 year lease but the only way I can get the ground rent to peppercorn is to force a Statutory Lease Extension. I'm one of the many that have been caught out by lenders change in criteria on ground rents ,

 

[JonRGV250]

That’s not quite right. The Act makes it much easier and cheaper to complete a lease extension. A lease extension cancels any ground rent, so whilst not perfect, it’s a step in the right direction.

That was my understanding.
I spoke to my solicitor who is arranging the extension on my rental so I can sell it before Labour annihilate the rental market, and he's already said the premium will be very little and the ground rent zero.
I'll find out when the freeholder gets back in the UK next month.
He also mentioned that a LOT of landlords are selling double quick, and from speaking to landlords I know that they're doing the same.
Good luck to people out there if you rent

 

[Bald-Eagle22]

That was my understanding.
I spoke to my solicitor who is arranging the extension on my rental so I can sell it before Labour annihilate the rental market, and he's already said the premium will be very little and the ground rent zero.
I'll find out when the freeholder gets back in the UK next month.
He also mentioned that a LOT of landlords are selling double quick, and from speaking to landlords I know that they're doing the same.
Good luck to people out there if you rent

Hope to see the finer details to confirm this .

And yes this is one of my BTL I was trying to sell before labour get in but it failed to sell on ground rent issues. To get honest I dont see what Labour will and can do to landlords anymore than Section 24 has already done

I was told last month to do a Statutory Lease Extension was going to cost me around £12000 and that was an estimate, hardly cheap . I decided to wait to see if the bill has changed anything.

 

[JonRGV250]

I had a look a few months ago at online guesstimates to see what the extension may cost and it was coming back at between £23-26K
Hence why I’ve been waiting to see what pans out.
As soon as I get actual costs I’ll post them here.
As for what Labour will do when they get in is anyone’s guess, but there’s got to be a reason why so many landlords are selling up before they get in (myself included).
God only knows what harebrained schemes they’ll introduce, but one way or another I’d put money on rents getting even further out of reach due to lack of properties available.

 

[Bald-Eagle22]

I had a look a few months ago at online guesstimates to see what the extension may cost and it was coming back at between £23-26K
Hence why I’ve been waiting to see what pans out.
As soon as I get actual costs I’ll post them here.
As for what Labour will do when they get in is anyone’s guess, but there’s got to be a reason why so many landlords are selling up before they get in (myself included).
God only knows what harebrained schemes they’ll introduce, but one way or another I’d put money on rents getting even further out of reach due to lack of properties available.

That will be tbe introduction of Section 24 and higher mortgage rates.

Imagine as landlord you have a Buy To Let mortgage of say £500 that was 100% tax deductible but then that £500 becomes an allowance against a 20% reduction on your tax return .

Example -Under Section 24 you’ll need to pay tax on the full rental income. This is £3,000 for basic rate taxpayers (20%) and £6,000 for higher rate taxpayers (40%).

-You can then claim back 20% of your mortgage interest payments which is £1,000(20% of £5,000)

In addition with higher interest rates its just become unprofitable and investors money is best spent elsewhere, however if your moratge free it's a massive profit each month.

And pole wonder why rents have gone up ! If Labour meddle even more you will see an even bigger increase in rents. I would also expect most landlords to be increasing rents as we speak , no landlord likes a Labour government.

 

[The Angry Welshman]

Take the politics elsewhere…….this is home and garden

 

[JonRGV250]

Take the politics elsewhere…….this is home and garden

No, if whats being said upsets you, then put me and others on your ignore list.
The thread title includes the word "home" for gods sake.

And people wonder why rents have gone up ! If Labour meddle even more you will see an even bigger increase in rents. I would also expect most landlords to be increasing rents as we speak , no landlord likes a Labour government.

I fear they will just for the sake of being seen to do something, and that something won't end well initially, but I'm guessing they'll be a massive u-turn at some point when reality hits home, and by then how many people will have gone through hell?
Personally I'll be glad to be out of the market as I don't particularly like the rent I charge, and that in itself is way under market value.
It, as you said makes far more sense to invest elsewhere, which I and many many landlords will be doing.
This will not end well for people who's circumstances dictate that they need to rent.

 

[JonRGV250]

Hope to see the finer details to confirm this .

And yes this is one of my BTL I was trying to sell before labour get in but it failed to sell on ground rent issues. To get honest I dont see what Labour will and can do to landlords anymore than Section 24 has already done

I was told last month to do a Statutory Lease Extension was going to cost me around £12000 and that was an estimate, hardly cheap . I decided to wait to see if the bill has changed anything.

My solicitors are now in the process of getting mine extended to a virtual freehold (990 years) with peppercorn rent and zero premium to pay, which is a massive relief.
Only slight downside is the £2K I have to pay to the solicitors and also my tenant has handed her notice during the process, but on the flip side I can put the rent up to market value (+£250 pm) until I sell it.

 

[BUDFORCE]

My solicitors are now in the process of getting mine extended to a virtual freehold (990 years) with peppercorn rent and zero premium to pay, which is a massive relief.
Only slight downside is the £2K I have to pay to the solicitors and also my tenant has handed her notice during the process, but on the flip side I can put the rent up to market value (+£250 pm) until I sell it.

Aside from the solicitors costs how much is it costing to amend/extend the lease?

 

[JonRGV250]

Aside from the solicitors costs how much is it costing to amend/extend the lease?

Nothing at all.

This may be unique to my situation as opposed to being a general rule?

 

[SeatIbiza]

My solicitors are now in the process of getting mine extended to a virtual freehold (990 years) with peppercorn rent and zero premium to pay, which is a massive relief.
Only slight downside is the £2K I have to pay to the solicitors and also my tenant has handed her notice during the process, but on the flip side I can put the rent up to market value (+£250 pm) until I sell it.

How have you blagged zero premium!?

 

[BUDFORCE]

Nothing at all.

This may be unique to my situation as opposed to being a general rule?

Yup thats certainly not common.

Winner though, as you say thats virtually Freehold so well worth doing.

 

[radderfire]

I was told last month to do a Statutory Lease Extension was going to cost me around £12000 and that was an estimate, hardly cheap . I decided to wait to see if the bill has changed anything.

Is that your solicitor's fee? Do they give you any breakdown of the work involved?

 

[radderfire]

In addition with higher interest rates its just become unprofitable and investors money is best spent elsewhere

This is not surprising because Buy To Let was fuelled by artificially cheap Buy To Let mortgages. A lot of these BTL mortgages should not have been made in the first place, it is just the financial sector over-extending itself and getting greedy. The fact that property will be seen as a less attractive investment for the wealthy is a good thing, because a landlord's profit is a tenant's cost.

 

[BUDFORCE]

This is not surprising because Buy To Let was fuelled by artificially cheap Buy To Let mortgages. A lot of these BTL mortgages should not have been made in the first place, it is just the financial sector over-extending itself and getting greedy. The fact that property will be seen as a less attractive investment for the wealthy is a good thing, because a landlord's profit is a tenant's cost.

Yup might mean I'm out of a job but overall you are right.

I suspect nothing much will change though the rich will just find another way of ******* the poor over.

 

[radderfire]

I'm OK with hard-working people that have saved money by doing real work, e.g. property renovation, becoming landlords. However, I am less keen on it when it was people leveraging themselves by taking on a BTL mortgage that really they could not afford and should not have been given.

 

[JonRGV250]

I'm OK with hard-working people that have saved money by doing real work, e.g. property renovation, becoming landlords. However, I am less keen on it when it was people leveraging themselves by taking on a BTL mortgage that really they could not afford and should not have been given.

Fair comment, however there's plenty on here that tar us all with the same brush.

How have you blagged zero premium!?

A few years ago all the leaseholders were offered a virtual freehold free of charge bar solicitors costs (I somehow missed the email), hence the zero cost now.

 

[radderfire]

Fair comment, however there's plenty on here that tar us all with the same brush.

Essentially what I am against is debt being made use of to profit by people that do very little of real value for, or are even antagonistic to, a fair society. "Easy money" has been very damaging to the country and society, does not represent the rewards of true enterprise, and has caused the major problems in the property market we see today. The problem was/is that it is difficult for "easy money" to be kept in check, there isn't really any good oversight or way for the general population to push back against it or call it into question.