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Councils Are Buying Flats With Low Leases

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It has come to light that Councils across London (elsewhere too perhaps) are buying flats with low leases at ludicrously overvalued prices. As to why they cannot wait a year or two god only knows. As it stands, they are not requesting current owners to extend the leases before purchase and the yearly ground rents on some of these flats is very high not to mention annual leasehold service charges.

I'm wondering whether this sort of information would be released via a freedom of information act request - taxpayers cetainly have a right to know about this.

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It has come to light that Councils across London (elsewhere too perhaps) are buying flats with low leases at ludicrously overvalued prices. As to why they cannot wait a year or two god only knows. As it stands, they are not requesting current owners to extend the leases before purchase and the yearly ground rents on some of these flats is very high not to mention annual leasehold service charges.

I'm wondering whether this sort of information would be released via a freedom of information act request - taxpayers cetainly have a right to know about this.

IS THERE NOTHING THAT COUNCILS DON'T PAY OVER THE ODDS FOR? :angry:

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IS THERE NOTHING THAT COUNCILS DON'T PAY OVER THE ODDS FOR? :angry:

Ain't that the truth. Been watching the farce that is the replacement of a street light recently. One firm comes out chops the street light in half, leaves the stump. 4 months later another firm comes out and installs a new street light next to the stump, stump left where it was. A month after that another firm comes out to remove old street lamp stump. A week after that a different firm comes out to fill the hole.

The whole job should have taken 2 or 3 guys a couple of hours at most.

Edited by MrFlibble

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Ain't that the truth. Been watching the farce that is the replacement of a street light recently. One firm comes out chops the street light in half, leaves the stump. 4 months later another firm comes out and installs a new street light next to the stump, stump left where it was. A month after that another firm comes out to remove old street lamp stump. A week after that a different firm comes out to fill the hole.

The whole job should have taken 2 or 3 guys a couple of hours at most.

I believe it's called job creation. And that job creation ultimately means wealth creation, for the likes of you and me, when the whole debt ridden edifice of government tumbles and sterling with it. :D

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I believe it's called job creation. And that job creation ultimately means wealth creation, for the likes of you and me, when the whole debt ridden edifice of government tumbles and sterling with it. :D

Just walked passed another couple of newly erected lights awaiting their old stump being removed, the holes were already freshly tarmacked over, probably due to health and safety, which means the new tarmac will have to be dug up again to remove the old stump then another batch of fresh tarmac laid.

Still it matters not in the land of plenty, we have money growing on trees, I picked £300 just this morning. 20 people involved in a task that 3 could do quite easily is no big deal.

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It has come to light that Councils across London (elsewhere too perhaps) are buying flats with low leases at ludicrously overvalued prices. As to why they cannot wait a year or two god only knows. As it stands, they are not requesting current owners to extend the leases before purchase and the yearly ground rents on some of these flats is very high not to mention annual leasehold service charges.

I'm wondering whether this sort of information would be released via a freedom of information act request - taxpayers cetainly have a right to know about this.

Which councils?

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It has come to light that Councils across London (elsewhere too perhaps) are buying flats with low leases at ludicrously overvalued prices. As to why they cannot wait a year or two god only knows. As it stands, they are not requesting current owners to extend the leases before purchase and the yearly ground rents on some of these flats is very high not to mention annual leasehold service charges.

I'm wondering whether this sort of information would be released via a freedom of information act request - taxpayers cetainly have a right to know about this.

1) I doubt very much that councils are buying at ludicrously overvalued prices (as measured by an official valuer, not by an HPC critic) as that would be a misuse of public money for which they could be censured and possibly even surcharged.

2) What would be the point of insisting that the current owner buy a lease extension as:

a) It would double or triple the price to be paid.

B) There must be a reason why the current owner has decided to take the lower value of the "un-mortgagable" short lease property instead of making extra money for themselves by extending it. Forcing them to extend it before you buy will just see it being sold to someone else for more money than you can afford.

3) Ground rents on short lease properties are usually very low (it kind of comes with them having been originally set in 1940 something) so do you have some examples.

4) Flats always come with service charges. What's the problem?

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It has come to light that Councils across London (elsewhere too perhaps) are buying flats with low leases at ludicrously overvalued prices. As to why they cannot wait a year or two god only knows. As it stands, they are not requesting current owners to extend the leases before purchase and the yearly ground rents on some of these flats is very high not to mention annual leasehold service charges.

I'm wondering whether this sort of information would be released via a freedom of information act request - taxpayers cetainly have a right to know about this.

Probably cheaper than B&Bs or rentals in the SHORT term.

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Bah. Not a patch on up here in Jockland. Edinburgh council are buying flats from developers that ARE NOT EVEN BUILT YET.

:angry:

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1) I doubt very much that councils are buying at ludicrously overvalued prices (as measured by an official valuer, not by an HPC critic) as that would be a misuse of public money for which they could be censured and possibly even surcharged.

2) What would be the point of insisting that the current owner buy a lease extension as:

a) It would double or triple the price to be paid.

B) There must be a reason why the current owner has decided to take the lower value of the "un-mortgagable" short lease property instead of making extra money for themselves by extending it. Forcing them to extend it before you buy will just see it being sold to someone else for more money than you can afford.

3) Ground rents on short lease properties are usually very low (it kind of comes with them having been originally set in 1940 something) so do you have some examples.

4) Flats always come with service charges. What's the problem?

1. The flat I'm talking about is on the market for £210K. Offers have come in around £135-150K. Council are buying for £205,000.

2. A lease under 80 years is difficult to get a mortgage on so you're talking cash purchasers/council etc without a lease extension

3. Ground Rents on recently developed properties are not low. Nor are ground rents that have been negotiated informally. This particular one goes up to £2K per year.

4. Some freeholders/managing agents are unscrupulous and charge vast sums for doing nothing.

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I didn't know that councils did this. I assumed that they would buy a block of flats from a freeholder and then let htam out to council tenants.

Being a leaseholder can be quite time consuming if living in a large block. It seems crazy that the council would pay into a service charge fund, get involved in the dicussions when the roof needs fixing etc, just for one flat in a block.

Perhaps the labour time involved is more of a waste than anything else!

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I didn't know that councils did this. I assumed that they would buy a block of flats from a freeholder and then let htam out to council tenants.

Being a leaseholder can be quite time consuming if living in a large block. It seems crazy that the council would pay into a service charge fund, get involved in the dicussions when the roof needs fixing etc, just for one flat in a block.

Perhaps the labour time involved is more of a waste than anything else!

They've already bought several flats in the same block already. Great for the leaseholders who paid to live there only to find out it's slowly turning into a council estate!

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1. The flat I'm talking about is on the market for £210K. Offers have come in around £135-150K. Council are buying for £205,000.

(...)

I can see a few possibilities:

1) The council "officer" is a moron, and thinks he/she is "bargaining", by offering £5k under asking price;

2) The council "officer" can't be arsed, as it is not his/her money;

3) There is some dodgy dealings going on, and the "officer" is in it for some kickback;

Any other?

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I can see a few possibilities:

1) The council "officer" is a moron, and thinks he/she is "bargaining", by offering £5k under asking price;

2) The council "officer" can't be arsed, as it is not his/her money;

3) There is some dodgy dealings going on, and the "officer" is in it for some kickback;

Any other?

Can't think if any.

Apparently, they can't go beyond a cap so they can negotiate anything up to this point and not more.

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1. The flat I'm talking about is on the market for £210K. Offers have come in around £135-150K. Council are buying for £205,000.

2. A lease under 80 years is difficult to get a mortgage on so you're talking cash purchasers/council etc without a lease extension

3. Ground Rents on recently developed properties are not low. Nor are ground rents that have been negotiated informally. This particular one goes up to £2K per year.

4. Some freeholders/managing agents are unscrupulous and charge vast sums for doing nothing.

1/2) 80 years is not a short lease, nor is it unmorgagable. Short leases are those under 50-60 years. At 80 years the discount for the shorter lease is minimal

3) 2K per year for ground rent IS abnormally high. On a 200K property 200 pounds is normal for a new lease.

4) Yes but unnecessary charges can be challenged and one assumes that the council will be better placed than most to do so

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1/2) 80 years is not a short lease, nor is it unmorgagable. Short leases are those under 50-60 years. At 80 years the discount for the shorter lease is minimal

3) 2K per year for ground rent IS abnormally high. On a 200K property 200 pounds is normal for a new lease.

4) Yes but unnecessary charges can be challenged and one assumes that the council will be better placed than most to do so

Under 80 years and you WILL have trouble selling, believe me. Marriage value also kicks in, making the lease extension more expensive.

Service charge disputes are complicated, mostly messy and expensive. Right to Manage would be the most sensible approach should there be a management issue.

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Under 80 years and you WILL have trouble selling, believe me. Marriage value also kicks in, making the lease extension more expensive.

Service charge disputes are complicated, mostly messy and expensive. Right to Manage would be the most sensible approach should there be a management issue.

There might be difficulty selling under 80 years, but it is most definately not because the property is un-mortgagable. And I very much doubt that in London it creates a problem at all.

Marriage value for an 75-80 year lease is 3% of value (so you have to pay half of that to extend the lease).

tim

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I'm more interested in knowing who they are hoping to house in these properties.

If its to fill them with more Somalia's families, then I think its time to start torching town halls across London quite frankly.

For a laugh I have recently put myself on a number of council waiting lists. I won't get anything unless I am basically "homeless" as I'm in the lowest category "D" but I'm now allowed to make bids.

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What councils ought to be doing is buying back some of it's stock sold off under RTB.

For a laugh I have recently put myself on a number of council waiting lists. I won't get anything unless I am basically "homeless" as I'm in the lowest category "D" but I'm now allowed to make bids.

I did the same thing back in January. I'm also in the lowest category "Low Need". It is interesting bidding on some of the places. Last week, I was 62nd and 63rd in the queue on the two 1 bedroomed flats I bid on.

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  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
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      • Even
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      • up 5%



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