We were delighted to learn this week that #LeaseholdHour will be returning to Twitter each week, starting again from Tuesday 16th May 2017 at 8pm.
Originally starting in November 2016 as the brainchild of Flat Living’s Rebecca Kelly, #LeaseholdHour provides a means for property managers, suppliers & leaseholders to come together to discuss the industry’s hot topics of the moment and, after a brief hiatus earlier this year, it is now ready to return stronger than before. We were also pleased to note that our own director, Nicholas Warren, will now be a joint host of #LeaseholdHour and we hope that his involvement will assist in making each week’s discussion a success.
Whether you are a veteran of #LeaseholdHour or it is entirely new to you, you are invited to join in the discussion each Tuesday from 8pm and if you have any ideas for topics that you wish to be discussed then contact either @NickWarrenPM or @FlatLivingLoves on Twitter.
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A topic which grabbed our attention recently was the announcement from Nationwide with regard to providing mortgages on leasehold flats & houses; if you have not yet seen this news, Nationwide have said that they will no longer provide mortgages for properties with onerous ground rent provisions (such as doubling rents every 10 years or where the initial ground rent is higher than 0.1% of the property’s value) or where the length of the lease is less than 125 years or 250 years for flats and houses respectively. This is undoubtedly in response to recent criticisms which have been levelled at developers who insert such ground rent provisions into leases when selling the property and the intentions behind this move are admirable, however will it actually force developers into changing their ways?
Nationwide are a big name in terms of offering mortgages in the UK – one of the so called ‘Big Six’ – and this decision clearly has the potential to affect a significant number of new mortgages. However, it also seems for now at least that Nationwide are on their own in terms of adopting this policy of lending against leasehold properties and if this remains the case with none of their competitors deciding to join them then this alone would perhaps be unlikely to instigate change amongst developers.
We have seen it mentioned in recent weeks when reading about these issues that many buyers are ruled by the hearts over the heads when purchasing their new property, and if a buyer finds that Nationwide are not prepared to provide them with a mortgage to purchase their dream home then are they really then going to walk away from the transaction? I can’t imagine that many buyers would value loyalty to a high-street mortgage lender above a property which they have either set their heart on or consider a prudent investment, and what is perhaps more likely is that they will instead take a walk up their local high street and take a mortgage with another lender who, for now at least, is still prepared to lend them the required funds.
Unless any of the other major mortgage providers in the UK adopt the same policy as Nationwide, it is perhaps unlikely that this alone will force the hand of developers to change the ground rent provisions within their leases and, unless they perform a U-turn, Nationwide may find that they will lose access to a portion of the market. However, it is conceivable that the recent negative publicity will already have forced developers into accepting less onerous ground rent provisions (take last month’s announcement from Taylor Wimpey as an example) and that the terms which Nationwide have said they will no longer lend against will shortly be a thing of the past anyway. If this is the case, could it be that Nationwide’s announcement was simply for publicity and to try and show their customers that they are on their side with their best interests at heart? If this is correct then they have undoubtedly beaten their main rivals to the punch in this regard, and they will now be waiting to see if this move has worked and is reflected in their share of the market over the coming months.
If you have any thoughts with regard to Nationwide’s announcement, this is due to be the main topic for the next #LeaseholdHour on 16th May 2017 so why not get involved from 8pm on Twitter.
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