NoHPCinTheUK Posted April 19 Share Posted April 19 I suspect more and more of these London’s leasehold flats are becoming unsellable due to the service charges ground rent scams. Quote Link to comment Share on other sites More sharing options...
The Angry Capitalist Posted April 19 Share Posted April 19 (edited) 23 minutes ago, NoHPCinTheUK said: I suspect more and more of these London’s leasehold flats are becoming unsellable due to the service charges ground rent scams. Yep. An unintended consequence of Britain's leasehold racket. The banks will be worried about mortgage holders of leasehold paying back their debt because if service charges/ground rents increase to high levels the tenants will default and be unable to pay back to the banks. And just like that leaseholds become worthless which is their intrinsic value anyway. Two possible scenarios from here: 1) The government back stops leasehold mortgages allowing the banks to lend and if default taxpayers pick up the tab or 2) Watch the government now pass proper leasehold reform quicker than you can say corrupt system. Watching with interest. Pass the popcorn! Edited April 19 by The Angry Capitalist Quote Link to comment Share on other sites More sharing options...
Si1 Posted April 19 Share Posted April 19 The obvious solution is that the leaseholds are worth a fraction of what they previously were. The existing mortgaged leaseholders sadly need to go bankrupt and the banks take a haircut on debt that they can't recover. They should never have lent on it in the first place, poor business by them. Which is probably why banks no longer want to lend on them, as they're liabilities are big enough on this stuff. Heres a major component of the forthcoming crash then. Will this in any way affect leasehold HTB houses? Quote Link to comment Share on other sites More sharing options...
The Angry Capitalist Posted April 19 Share Posted April 19 1 hour ago, Si1 said: The obvious solution is that the leaseholds are worth a fraction of what they previously were. The existing mortgaged leaseholders sadly need to go bankrupt and the banks take a haircut on debt that they can't recover. They should never have lent on it in the first place, poor business by them. Which is probably why banks no longer want to lend on them, as they're liabilities are big enough on this stuff. Heres a major component of the forthcoming crash then. Will this in any way affect leasehold HTB houses? Are they not covered by the government aka taxpayers? If so, then not much apart from the national debt going a bit higher. Don't think there were many of them created anyway. Quote Link to comment Share on other sites More sharing options...
bartelbe Posted April 20 Share Posted April 20 You would have to be mad to touch a leasehold property in this country, unless it was one of the older ones with a long lease and a peppercorn rent which couldn't be increased. One of the biggest scandals here, is all the right to buy buyers trapped in ripoff leasehold properties. Which they can't sell. Quote Link to comment Share on other sites More sharing options...
NoHPCinTheUK Posted April 20 Author Share Posted April 20 3 minutes ago, bartelbe said: You would have to be mad to touch a leasehold property in this country, unless it was one of the older ones with a long lease and a peppercorn rent which couldn't be increased. One of the biggest scandals here, is all the right to buy buyers trapped in ripoff leasehold properties. Which they can't sell. “Leasehold prisoners, the history of leaseholders trapped in a house they cannot sell”. Soon on Channel 4. Quote Link to comment Share on other sites More sharing options...
Si1 Posted April 20 Share Posted April 20 4 hours ago, bartelbe said: You would have to be mad to touch a leasehold property in this country, unless it was one of the older ones with a long lease and a peppercorn rent which couldn't be increased. One of the biggest scandals here, is all the right to buy buyers trapped in ripoff leasehold properties. Which they can't sell. They make no f****** sense now the leasehold costs the same as just renting it normally. why would you tie capital up to have a right to pay the same rent that you can pay anyway without tying any capital up? Quote Link to comment Share on other sites More sharing options...
Huggy Posted April 20 Share Posted April 20 1 hour ago, Si1 said: They make no f****** sense now the leasehold costs the same as just renting it normally. why would you tie capital up to have a right to pay the same rent that you can pay anyway without tying any capital up? Because then they are homeowners and only homeowners can get into heaven. I do believe they think this way Quote Link to comment Share on other sites More sharing options...
Si1 Posted April 20 Share Posted April 20 1 hour ago, Huggy said: Because then they are homeowners and only homeowners can get into heaven. I do believe they think this way Emperor's new clothes Yadda yadda Quote Link to comment Share on other sites More sharing options...
nero120 Posted April 20 Share Posted April 20 5 hours ago, Huggy said: Because then they are homeowners and only homeowners can get into heaven. I do believe they think this way Quote Link to comment Share on other sites More sharing options...
fellow Posted April 21 Share Posted April 21 So, the unintended consequence of the banks refusing to lend on leasehold properties - the value of the the existing leasehold stock on their balance sheets plummets. It's seems they are damned if they do and damned if they don't. Quote Link to comment Share on other sites More sharing options...
70PC Posted April 21 Share Posted April 21 On 4/20/2024 at 11:04 AM, bartelbe said: You would have to be mad to touch a leasehold property in this country, unless it was one of the older ones with a long lease and a peppercorn rent which couldn't be increased. One of the biggest scandals here, is all the right to buy buyers trapped in ripoff leasehold properties. Which they can't sell. I didn't know that right to buy homes were being sold with these leasehold traps. HMG have looked the other way with many ripoff schemes. This one takes the biscuit. Quote Link to comment Share on other sites More sharing options...
Up the spout Posted April 21 Share Posted April 21 20 minutes ago, 70PC said: I didn't know that right to buy homes were being sold with these leasehold traps. HMG have looked the other way with many ripoff schemes. This one takes the biscuit. Scammy scammer Tories have to be admired for their inventiveness - took the entire country hook, line, and sinker. Quote Link to comment Share on other sites More sharing options...
bartelbe Posted April 21 Share Posted April 21 On 4/20/2024 at 3:30 PM, Si1 said: They make no f****** sense now the leasehold costs the same as just renting it normally. why would you tie capital up to have a right to pay the same rent that you can pay anyway without tying any capital up? To be honest I am baffled by your post. I said that you would have to be mad to buy a leasehold. The exception is older leasehold properties that have ground rents of a couple of quid that never go up. Quote Link to comment Share on other sites More sharing options...
Si1 Posted April 21 Share Posted April 21 1 hour ago, Up the spout said: Scammy scammer Tories have to be admired for their inventiveness - took the entire country hook, line, and sinker. I think they've actually totally forgotten any kind of ethical obligation in politics. Quote Link to comment Share on other sites More sharing options...
Trampa501 Posted April 22 Share Posted April 22 Is this actually a thing, or another example of wishful thinking by the usual suspects here? Do we have quantifiable evidence that banks are starting to refuse mortgage loans on leasehold flats in London? I agree it would affect the market and bring about a much needed correction, but until someone shows it's a thing, hard to see things changing. Apart from anything else rents are still sky high in London, so folk will still think buying property, leasehold or not, is a zero-risk gamble. You need to show proof that banks' policy has changed on leasehold mortgages. Quote Link to comment Share on other sites More sharing options...
Frankie Teardrop Posted April 22 Share Posted April 22 Problem for the banks is if someone else has a lien over the property that ranks above them. The freeholder has right to possess if the ground rents are not paid. Now that these ground rents are no longer trivial amounts it starts to factor into the risk of default and how much can be recovered. Quote Link to comment Share on other sites More sharing options...
Locke Posted April 22 Share Posted April 22 20 hours ago, bartelbe said: To be honest I am baffled by your post. I said that you would have to be mad to buy a leasehold. The exception is older leasehold properties that have ground rents of a couple of quid that never go up. I think he was agreeing with you Quote Link to comment Share on other sites More sharing options...
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