Sunday, November 3, 2019

The leasehold and ground rents scandal of Royal Tunbridge Wells

Freehold or Leasehold .. which is best? Well, when buying a property in the UK there are two main types of ownership – freehold and leasehold and, when boiled down, they mean the following...

Freehold: The person who owns the freehold of a property owns the property and the land it stands on.

Leasehold: As a leaseholder you do not own the land the property is built on. A leaseholder essentially rents the property from the freeholder for a number of years, decades or in some Victorian terraced houses, for centuries. 

All apartments have to be sold as leasehold properties because of the very nature that you have a neighbour above or below you (so both of you can’t own the land) with the length of the lease being over 100 years (even more sometimes). 

However, with some apartments – particularly Victorian and Edwardian houses converted into numerous apartments – which are sold on the basis that the leasehold apartment owner also owns part of the freehold (with other leaseholders in the same building), having what is known as 'share of freehold'.  Similarly, the Government also brought in legislation a number of years ago for more modern apartment blocks built in the 20th century where it allowed leaseholders to club together and have the right to purchase the freehold together.
Now we must stress, there is nothing wrong with leasehold – it’s been a useful type of homeownership since Norman times, it’s just that with a leasehold comes a potential extra responsibility. If there are four apartments in a block, who pays for the leaking roof when all benefit from a watertight roof? Who pays for the bad foundations, when all benefit from good foundations? Who pays for building insurances? .. the list goes on – so clauses are added to the leasehold agreement to ensure everyone is protected and pays their fair share of the joint costs of the building with service charges and a nominal ground rent (ground rent isa nominal rent, commonly quite low, often in the region of £50 per year to the freeholder of the property).

Whilst houses tend to be sold as freehold as it's a more unambiguous set-up, given there is only one property on the land. Contentiously however, in the last 20 to 25 years this has not always been the case with new-builds as some new homes’ builders have sold the leasehold to the buyer and retained the freehold. There is nothing wrong with that, it’s just in some cases (not all) they also added some oppressiveclauses to the lease of the property they were selling, which could be the next PPI scandal - albeit for property.

Government reports have emerged recently that suggest 12,000 leaseholders in the UK are facing ground rents – which they pay to the freeholder – that double in cost, usually every 10 years, but occasionally more frequently. 

Builders started to add clauses into leasehold property sales with ground rent being set at £300 and £400 a year, yet it doubled every ten years. Though unwary first-time buyers were habitually told that their 500 and 999-year leases were practically freehold, the clauses inescapably meant that the ground rent would spiral to ridiculous levels meaning the average ground rent would be £23,750 a year by 2070 and £379,900 a year by 2130, making the properties practically unsellable today, with owners often left unable to re-mortgage too.

So, how many people are affected by this in our local area?

Well, using Government data, our research suggests that in Royal Tunbridge Wells 49 householders have bought a detached house, semi-detached house or town house (which would normally be freehold) as  leasehold. Not all these have onerous lease clauses, yet some do. I know it doesn’t sound a lot, yet that is potentially 49 lives ruined with houses they can’t sell - making them prisoners in their own property.



The good news is the Government is on the case and serious about sorting this issue out as theyhave proposed a ban on the future sale of houses as leasehold, as well as cutting ground rents to zero. Yet stern questions remain about the future of homeowners in existing leaseholds. Westminster wants the builders to set up compensation plans, and we will say many (not all) have stepped up to the mark and started to sort this, although some campaigners have said the schemes are not fit for purpose, let’s hope they are wrong.
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Wednesday, October 23, 2019

How long is an average Royal Tunbridge Wells property on the market for?

If you are either selling or buying a property in Royal Tunbridge Wells, there are a few reasons why it may be taking some time to sell your Royal Tunbridge Wells home or find that perfect place to call your new home. It may be taking longer than you thought to find a buyer for your home because of the current state of the property market or finding that perfect Royal Tunbridge Wells home may be taking too long because of a lack of properties to buy.

So, taking everything into consideration, all of these factorsinvite an obvious question; how long is too long to persist in the Royal Tunbridge Wells property market?

If you are looking to sell your Royal Tunbridge Wells property, it may have become infuriating when your home has been on the market for longer than you anticipated. Perhaps the property market is purely in a position where it's challenging to get a property sold quickly, or sold at the price you want to achieve for it. If you do live in a Royal Tunbridge Wells home that is towards the upper reaches of the price band, you have to be open to the idea that because it's worth so much more than the average property in Royal Tunbridge Wells and so more than most individuals can afford, you will have to wait longer to get it sold.

Your Royal Tunbridge Wells home might be taking longer to sell because your asking price is simply too high. Even if you are prepared to take a realistic offer, if you have an unrealistic asking price your overpriced Royal Tunbridge Wells property will undoubtedly turn off potential buyers from even being inclined to book a viewing.

Looking at the market in Royal Tunbridge Wells compared to a year ago makes very interesting reading…





When it comes to the average length of time on the market, it’s the terraced homes and apartments in Royal Tunbridge Wells that appear to be taking longer to sell, yet the length of time Royal Tunbridge Wells detached and semi-detached homes seem to be on the market has dropped.

The overall average length of time a Royal Tunbridge Wells property remains on the market has risen by 7.2%, from 76 days a year to 82 days today

The question that remains is, if you are having no luck selling should you leave your Royal Tunbridge Wells property on the market or not? This is basically down to your personal circumstances - a big decider has to be if you are moving up market or downsizing. 

Buyers will compare your Royal Tunbridge Wells property to all the other homes on the market using the portals such as Rightmove, On the Market and Zoopla and even if your asking price is realistic, if your marketing (brochures, pictures, even video walk through) isn’t top dollar, they will dismiss your property. 

Remember, the average buyer only views 4.5 properties before they buy and on average, each buyer will only spend just over 25 minutes viewing each home  …

The more properties that are on the market, the greater the choice for buyers (yet more competition for house sellers), so we wanted to look at how many homes were for sale in Royal Tunbridge Wells now, compared to 12 months ago.

As you can see, there are some differences between the property types in Royal Tunbridge Wells.





As for buying a Royal Tunbridge Wells property, searching for that dream house can take time as you have to consider the needs of your spouse, children, schooling, etc., what you can realistically afford and whether your current location can accommodate you until you find that perfect Royal Tunbridge Wells home.

Don’t forget that upwards of 10% of homes do not make it to the portals (the portals are Rightmove, Zoopla and On the Market), so don’t just rely on the portals to let you know what is coming on the market. The number of times I speak to disappointed buyers who missed out because other buyers registered directly with the agent for property, whilst they relied on the portals.


When it comes to buying a Royal Tunbridge Wells home, and so you do not make any decisions you will regret later on, taking your time is always the more practical option. The amount of money that is involved in buying a home and all the costs connected with it means that you should not rush into buying or selling without due consideration.

Friday, October 4, 2019

What’s the biggest street in Royal Tunbridge Wells (TN1)?

Most weeks, my articles on the Royal Tunbridge Wells property market tackle some of the big issues about the local property market, such as the lack of new homes being built in Royal Tunbridge Wells, the trials and tribulations of being a Royal Tunbridge Wells buy-to-let landlord and the future of the Royal Tunbridge Wells property market .. yet in this article, I wanted to give you some fun facts about the Royal Tunbridge Wells property market – which is the largest street in TN1 by the number of properties on it?

The biggest street in TN1, when it comes to the number of houses on it is Upper Grosvenor Road, with 758 homes. In second place is St James Road with 239 homes and in third is London Road with 220 homes.





Not surprisingly, the most valuable street of the top 20 biggest streets is Upper Grosvenor Road at £214.2m with an average value of £283,000 per property.

The street with the greatest number of movers in the last 3 years is also Upper Grosvenor Road, yet its saleability rate was only 9.1%, with London Road having the highest saleability rate of 20.9%.

The full breakdown can be found in this chart below.



Yet, did you really think I wouldn’t get at all serious .. 

The basic rudiments of the Royal Tunbridge Wells property market remain principally healthy in many parts of Royal Tunbridge Wells, yet the existing political environment means that the vital element of confidence has been diminished slightly in certain parts, and that is triggering a minority of potential property purchasers and house-sellers to vacillate, yet with unemployment at an all-time low, a record number of people with a job, ultra-low interest rates and decent mortgage availability (with the Banks and Building Societies tending to drop mortgage rates instead of increasing them), those Royal Tunbridge Wells first time buyers (and especially Royal Tunbridge Wells buy-to-let landlords) who have adjourned their next house purchase because of perceived political uncertainty should be reminded that talking to many of my fellow Royal Tunbridge Wells agents they have more homes on their books than at any time for the last three or four years, so there is a greater choice of Royal Tunbridge Wells properties to call your next home/BTL investment with a potential of securing a great property deal in the next month or so.

Irrespective of what happens with Brexit, Royal Tunbridge Wells people will still need a roof over their heads and as I have mentioned on a number of occasions, I have proved beyond doubt we aren’t building enough homes both locally in Royal Tunbridge Wells and nationally. If supply is limited and demand increases (as the population grows and we get older), prices in the medium to long term can only go in one direction. Upwards!

So, whatever happens with BoJo and Brexit – why wait, because once we get over that hurdle, there will just be another hurdle and another hurdle and by which time – we will be in 2029 and you would have missed the boat. We survived the Global Financial Crash, 3-day week in 1970s’, hyperinflation etc etc …  yet the choice is yours.