Latest news with #leasehold
Daily Mail
9 hours ago
- Business
- Daily Mail
I'm an auction expert - here's four type of property savvy buyers are snapping up right now
Savvy home buyers and investors have long headed to auction as a way to pick up keenly-priced properties. But as with the mainstream property market, new trends are always emerging as buyers sniff out opportunities for a real bargain. Andrew Binstock, co-founder and auctioneer at Auction House London, tells us what kind of properties are popular in the auction room right now – and why buyers are so keen to snap them up. 1. Flats with a short lease Binstock says some auction buyers are making a bet on on the Government's leasehold reforms, which would make it much cheaper and easier to extend a lease, coming to fruition. As it stands, extending a lease will set someone back an average of about £10,000 including legal costs. But a bigger problem comes if the lease has less than 80 years left when it is renewed. In these cases, the leaseholder may have to pay some of the 'marriage value' to the freeholder. The marriage value is the uplift in the property's value as a result of the lease being extended, and leaseholders usually pay 50 per cent of this to the freeholder. There's effectively no upper limit on this and it can be extremely costly in some cases - which is why flats with leases below 80 years can fall in value rapidly. Marriage value is set to be abolished under the Leasehold and Freehold Reform Act 2024. The law is a long way from being implemented, but if and when it is, those who've bought cheap leasehold flats today could potentially sell them for a tidy profit. 'Short leasehold flats are attracting strong demand - we have offered over 150 so far this year,' says Binstock. 'They have on average sold for 25 per cent above guide price, as buyers grow more confident around upcoming leasehold reform.' A one-bed flat on offer at Auction House London's next sale, on 2 and 3 July, has a remaining lease of just eight years. Located on Beaufort Street in London's Chelsea, its guide price is £120,000. The property could make a good home for a single professional or a couple, or a pied a terre. According to Foxtons, one-beds in the area fetch between £300,000 and £1.25million – creating a potentially huge windfall if the buyer pulls it off. However, they are also taking on a significant risk. Also on offer is a two-bed, third-floor leasehold flat on the harbourside in Poole, Dorset. Located on Banks Road, it is a stone's throw from the Sandbanks neighbourhood, which is home to some of the priciest properties in the country. It also offers beautiful views of the coast. It has 46 years left on the lease and will go up for sale with a guide price of £225,000. Flats in the same postcode sold for an average of £461,430 last year, according to Rightmove. 2. Bargain homes in beauty spots Another reason buyers are heading to auction right now is to find affordable properties in sought-after areas. Someone who has been yearning for a home by the coast or in the Cotswolds may not be able to afford one that has been lovingly restored and decked out with all the mod cons. However, if they are willing to get their hands dirty with an auction doer-upper, pricier locations can be within their reach. In its April auction, Auction House London sold this period property in Cheddar, Somerset for £170,000, which was £20,000 more than its £150,000 guide price. It is nestled in the Mendip Hills and close to Cheddar Gorge. The building is currently used as a medical clinic and offices, but has permission to be converted into two two-bedroom flats. According to Zoopla, flats in Cheddar sold for an average of £147,800 in the last year. Permission could also be sought for a large, single-family home. Semi-detached homes sold for an average of £266,680 in the last year. Similarly, Auction House London sold a two-bedroom, semi-detached house in the village of Cottenham, which sits on the edge of the Fens near Cambridge, for £152,000 at its April auction. The average price of a semi-detached home in Cottenham last year was £381,136, according to Rightmove. What's the average price at auction? The average auction property sold for £262,789 in April 2025, according to Auction House London. According to the latest house price data from Halifax, the average home costs £296,648, meaning a typical auction property was £34,000 or 11.5 per cent cheaper on average. However, Andrew Binstock of Auction House London says that, when comparing two properties of a similar size and in a similar location, the actual discount is commonly about 20 per cent. Buying at auction can be a way to get more for your money - but there is sometimes a trade-off to be made, for example that the property needs serious renovation. This is why it is vital for buyers to do as much research as possible before bidding, including reading the legal pack supplied by the auctioneer, viewing the property and getting a survey if appropriate. It can also be more challenging to get a mortgage on an auction property. 'Usually, auction properties go for about 20 per cent lower than market rate and this discount is apparent across the country,' says Binstock. 'The biggest saving most likely is a detached house but it's predominantly due to the condition of the property, rather than the type of property. 'So for instance, probate properties, repossessed properties, houses of multiple occupancy, shops with uppers and land with planning permission might all be offered at keen prices.' 3. Shops with flats Another popular purchase at auction is lots that combine a shop with flats in the building above. This type of investment is attractive to landlords because it means that if one part becomes empty, they can still draw an income from the other. 'The appetite for opportunity is clear in the mixed-use sector, where buyers are drawn to versatility and the scope to add value over time,' says Binstock. This building on the high street in Kington, Herefordshire is being offered for sale with a guide price of £120,000 at the July auction. It comprises a shop on the ground and lower ground floors, and a split-level, four-bedroom flat above. It also has a rear garden. 4. Plots of land to build on Plots of land are another type of property which commonly comes up for auction - and Binstock says buyer appetite is strong because of the Labour's push for more homes to be built. He said that 80 per cent of land offered up at Auction House London went on to be sold. 'The Labour government's more proactive stance on planning is helping to restore confidence in sites with development potential,' he added. Land highlights in the upcoming July auction include a 3,897 sq ft parcel of land in Glastonbury, Somerset, on which permission has been granted to build five homes. It has a guide price of £65,000. An 1,851 sq ft plot of land in St Albans, Hertfordshire, is also being sold with a guide price of £5,000 to £15,000. Best mortgage rates and how to find them Mortgage rates have risen substantially over recent years, meaning that those remortgaging or buying a home face higher costs. That makes it even more important to search out the best possible rate for you and get good mortgage advice, whether you are a first-time buyer, home owner or buy-to-let landlord. Quick mortgage finder links with This is Money's partner L&C > Mortgage rates calculator > Find the right mortgage for you To help our readers find the best mortgage, This is Money has partnered with the UK's leading fee-free broker L&C. This is Money and L&C's mortgage calculator can let you compare deals to see which ones suit your home's value and level of deposit. You can compare fixed rate lengths, from two-year fixes, to five-year fixes and ten-year fixes. If you're ready to find your next mortgage, why not use This is Money and L&C's online Mortgage Finder. It will search 1,000's of deals from more than 90 different lenders to discover the best deal for you.
Telegraph
12 hours ago
- Business
- Telegraph
Rayner handing ‘gift' to rich foreigners, complains Chelsea landlord
Angela Rayner's plans to overhaul Britain's 'feudal' leasehold system will hand wealthy foreigners a windfall at the expense of British taxpayers, one of London's biggest landowners has said. Hugh Seaborn, the chief executive of Cadogan Estates, the Earl Cadogan's property company, said plans to make it cheaper and easier for leaseholders to buy their properties outright amount to taxpayer-funded 'gift' to affluent residents in parts of central London. The reforms were proposed by the previous Conservative government but are being pursued by the current Labour administration. Matthew Pennycook, the housing minister, said in March that the Government would abolish the 'feudal-era' leasehold system by the end of this parliament. Cadogan Estates owns £5.7bn worth of land, including more than 90 acres of Chelsea, and Mr Seaborn said that extending the new rules to cover all of the country would amount to a giveaway for wealthy non-doms with properties in plush parts of inner London. He said: 'Why should this gift be given by the Government from existing British businesses, that pay tax and are based in the UK, to wealthy leaseholders that have been represented and understood what they were buying? These aren't vulnerable people.' A 'large proportion' of leaseholders in the London boroughs of Kensington and Chelsea, Westminster and Camden 'are non-UK residents', he claimed. 'So you could surmise ... that this may not be subject to UK tax, whereas property businesses that are based here, that are family-owned, are subject to UK tax.' Cadogan Estates made a £72.3m UK tax contribution in 2024, up from £50.7m in the previous year. Mr Seaborn said: 'It undermines businesses like ours, who are investing in the area, in community, in charity, in the public realm – it undermines our ability to do so.' Under the existing leasehold system, marriage value – the term for the rise in a property's value after a leasehold of below 80 years is extended – is split 50-50 between leaseholder and freeholder. However, this is poised to be replaced by a system that awards the full value increase to the tenant. The effect will be to make it cheaper for leaseholders to buy the lease from freeholders, or make it more attractive to sell on. The new rules will also make it easier for leaseholders of a multi-dwelling property to club together to buy its freehold. Cadogan Estates is among a group of landowners and charities behind a legal challenge against the Leasehold and Freehold Reform Act, which is taking forward the changes. The case will be heard in the High Court this July. Mr Seaborn said there was 'an awful lot of the Act that we support, because it needs simplifying', underlining an 'abuse of service charge' in parts of the market that is 'understandably' frustrating leaseholders. However, he said the current bill was 'a bit of a sledgehammer'. He said: 'It's beating the leasehold system rather than focusing on where the issues are. This legislation was in a very early stage of drafting, it was rushed through, and this Government has inherited it. So it's quite challenging.' Mr Seaborn said the estate was engaging with ministers but said the Government had 'made it clear that they're following through on it'. In its latest financial results, the estate said it had 'engaged extensively with ministers and civil servants fruitlessly, so have taken legal steps to protect our interests'. Cadogan Estates has said the reforms will lead to a 'material financial loss' and hamper its ability to invest in the area. The value of its residential properties slipped by 1.2pc to £1.44bn during 2024. None the less, the overall estate booked a 16.6pc yearly rise in operating profit to £140.2m last year, as well as a 1.3pc increase in the value of its overall estate. It invested £211m in property purchases and development, including spending £46m doing up Sloane Street. A Ministry of Housing, Communities and Local Government spokesperson said: 'We cannot comment on ongoing litigation. 'We will act to provide homeowners with greater rights, powers and protections over their homes by effectively implementing the Leasehold and Freehold Reform Act 2024 as quickly as possible.'
The Sun
4 days ago
- Business
- The Sun
The sneaky service charges adding thousands to YOUR bill and how to fight back
MILLIONS of people living in leasehold properties are being hit with spiralling service charge fees - but there is a way to fight back. Almost five million homeowners pay service fees, which have risen 11% in the last year to an average of £2,300 per month, according to Hamptons. 3 Some leaseholders have seen charges sky rocket, making it unaffordable and tricky to sell their home. While others have been hit by unfair charges. The government has planned to reform the system - but there are delays. This week JAMES FLANDERS explains how to challenge unfair charges. SOARING FEES Service charges are a fee paid by a leaseholder or resident set by a landlord. The amount varies each year depending on costs to the landlord. They can include charges for maintenance, repairs and insurance. The details are usually set out in your lease. The fee is usually set on what the landlord thinks they will spend. At the end of year the landlord should provide a statement. Detail of world's tallest apartment block revealed - including price of penthouses Some leases allow landlords to ask for contributions towards a "sinking fund" to build up reserves for future larger scale works. David Fell, lead analyst at Hamptons, said: "Both buyers and mortgage lenders have become increasingly cautious about committing to high service charge costs, particularly where they perceive charges to be disproportionate to the amenities they get in return. "As a result, would-be sellers paying high charges have often seen the value of their homes rise more slowly or even fall. "In some cases, sellers are offering potential buyers a cash contribution towards future service charge payments." 3 UNFAIR CHARGES Some leaseholders have found that they are being charged unfair fees. Tribunal judges have made some landlords pay back up to £100,000. In one example, they ruled that a £135 fee to change two light bulbs was excessive. In February 2023, it was revealed that landlords and insurance brokers were secretly taking up to 60% of the £1.6billion leaseholders paid for building insurance as hidden commissions. New rules now stop insurance companies from choosing policies just to earn the highest commission, helping leaseholders get better value. But brokers and managing agents are still allowed to take commissions. The government has promised to ban excessive building insurance commissions through the Leasehold and Freehold Reform Act 2024. Instead, landlords will only be able to charge a straightforward and fair "permitted insurance fee" for the work they actually do, making costs clearer and protecting leaseholders from hidden charges. However, these proposed laws still need further legislation to come into effect, and the government hasn't yet provided a timetable for this. New rules planned by the government also plan to introduce commonhold agreements to replace leasehold ones. Commonhold allows flat owners to jointly own and manage their buildings, cutting out landlords and property management companies. But the proposed rules only apply to new homes. A spokesperson for the Ministry of Housing said they know "far too many leaseholders" are being hit with "unreasonable and extortionate charges". A draft of the bill is expected later this year but leaseholders may have to wait months before it becomes law. 3 HOW TO CHALLENGE FEES Leaseholders have a legal right within six months of receiving a summary of costs to request extra information from their landlord. You can challenge a cost if you think it's unreasonable, the standard of work is poor or you don't think you should be paying it. For example, you might question a fee for lift maintenance if you live in a ground-floor flat and it's not included in your lease. Or you could challenge charges for communal services, like a gym that's always closed or a concierge service that doesn't have staff. You will need to apply to a tribunal which has the power to rule on whether the service charge is reasonable or payable. In England this is the first-tier tribunal (property chamber). In Wales it's the leasehold valuation tribunal. Applying to the tribunal usually costs a fixed fee of £110, though this may be waived if you're on certain benefits. If your case is transferred from court to the tribunal, you'll only pay the difference between the court fees and the tribunal fee - or nothing if you've already paid more than £110 in court fees. If a hearing is scheduled, you'll need to pay an additional £220 hearing fee. Speak to the Leasehold Advisory Service online at or call them on 020 7832 2500 to find out more and get free advice on service charge issues. You could also apply to the Housing Ombudsman if you have a complaint about how your service charge fees have been managed. It says cases have jumped by 25 per cent in the last four years. If you're finding it hard to pay your service charges, there's support available. If you're on Universal Credit and have been receiving it for at least nine months, you could get help with your service charges if you own a leasehold property. People over the state pension age can also get support through pension credit. £5.3k charge but I waited months for vital repairs LAWYER Liam Spender, 41, thought he'd bought his dream home when he purchased his £591,000 two-bed flat six years ago. But within months it had turned into a nightmare. "I regret buying it to this day," said Liam, who lives in the Isle of Dogs, east London. Initially he paid a £4,200 a year service charge but it has rocketed to £5,300 in just four years - a 26% increase. A huge chunk of his bill - over £1,200 a year - was for buildings insurance, according to Liam. Yet, despite paying so much, Liam had to wait months for repairs after part of his flat's floor collapsed. To make matters worse, he discovered £300 of the insurance fee was being taken as commission by his landlord and their broker. In 2021, Liam teamed up with 103 homeowners in his building block and applied to the property tribunal. A few days before the case their landlord conceded and awarded the homeowners £100,000 in backdated commission payments. It meant that Liam got £300 back, while his neighbours in larger properties received significantly more. "There are millions of people like me in the same boat and they are owed money they don't even know about", said Liam, who has since founded Leaseholder Action to help other people being hit with secret commission fees. RIGHT TO MANAGE If you don't get anywhere by approaching your management company, you could take over managing the charges yourself via Right to Manage. It is a legal process where leasehold residents in flats can take over managing the maintenance and services. To do this, enough long-leaseholders (those with leases originally over 21 years) need to get together and form an RTM company. It costs £50 to set up a company and takes 24 hours to register. You then need to serve notice to the freeholder of the development - the person who owns the land - letting them know you are taking over the right to manage. They then have one month to dispute this. The government is also planning to remove the requirement for leaseholders to cover the landlords expenses during the process, which will save homeowners around £3,000. It's also not allowed if there are four or fewer flats and a landlord lives in the building. It could help you cut out management fee costs and charges for unnecessary work - but you will be responsible for the company and annual reporting. Unless one of you is trained in these areas you may need to take on an accountant or managing agent. Applications to set up RTM companies rose by 20% last year, according to Direct Line.
Daily Mail
31-05-2025
- Health
- Daily Mail
My neighbour smokes and the fumes come into to our flat: Can we stop him?
I live in a leasehold flat and there is a leak in the shared water pipe running from my bathroom into the bathroom below. My neighbour wants me to pay towards fixing this as the pipe originates in my bathroom, even though he is the one with the leak. I think the property management company should pay as these pipes are communal. At the same time, my neighbour smokes and the fumes come through from his flat to mine through vents in the bathroom, kitchen and hallway. The smell is so strong that anyone coming in would assume I was also a smoker. My sister who I live with is asthmatic and this is making her extremely upset. Other neighbours have also complained. The property management company spoke to my neighbour about it, but he just said he has sealed all the air vents and that there's nothing more he can do. Is there anything I can do to resolve this? Why should I spend money fixing the water leak issues that he is complaining about, when he isn't addressing the issue of the toxic smoke fumes coming into my property? I'm considering selling the flat as this is such a nuisance. When I purchased the flat, the lease was missing. Does that affect anything? Jane Denton, of This is Money, replies: Your situation is distressing and there are multiple components to it. Getting a copy of the lease or a new one made is crucial. I'm perplexed as to how you were able to complete on the flat without this. This document will help you determine who is responsible for getting the shared water pipe fixed. It should be the managing agent or freeholders, I imagine. A key concern for you is the smoke fumes coming from your neighbour's property into yours. It is possible this could constitute a statutory nuisance, giving you a better chance of getting the problem resolved. At this stage, you may need to put your plan to sell on hold. The issues you have outlined would need to be disclosed during the selling process. I have asked two legal experts for their thoughts on your case. Given the complexity of your case, it would be sensible for you to find a solicitor and see how they can help you. Manjinder Kaur Atwal, director of housing law at Duncan Lewis Solicitors, says: You have described a deeply distressing situation involving two key legal issues for leaseholders: repair responsibility and nuisance. In respect of the leak and leasehold flats, anything serving more than one property — such as shared water pipes — is usually the responsibility of the freeholder or managing agent. If the leaking pipe is part of the communal plumbing system, the management company should investigate and arrange for repairs, which should be covered by the service charge. If you do not have a copy of the lease, ask your managing agent for one, along with the building's insurance policy. The lease sets out the obligations for everybody in respect of repairs. If the lease fails to mention shared pipework or is ambiguous, you may still have a case under broader property law principles. Generally, landlords are responsible for maintaining structural and communal parts of a building especially where issues affect multiple flats. If the lease confirms the landlord is responsible for the repair but they do not act, there are several options available. Begin by raising a formal complaint in writing, referring to the relevant lease provisions and clearly requesting remedial action. If the issue remains unresolved, you may consider applying to the First-tier Tribunal to carry out the repair or, if the associated costs are recoverable, through the service charge. However, if you want to compel the landlord to undertake the works or to claim compensation for losses suffered due to the disrepair, you need to issue a County Court claim, which can grant specific performance, award damages or issue injunctive relief. You can also report the matter to your local authority under the Housing Health and Safety Rating System. Officials can assess the health risk and issue enforcement notices if the property is deemed hazardous. Second, the heavy smoke entering your flat could amount to a nuisance and breach your neighbour's lease, especially if it affects your health. Most leases ban behaviour that annoys or disrupts others' enjoyment of their home. The managing agent has a duty to enforce this. If they don't, you can again take legal action and possibly seek an injunction. Given your sister's asthma, you could be protected under the Equality Act 2010. Landlords must avoid discrimination and take reasonable steps to reduce harm to disabled residents. Documenting the problem, including dates, witness statements from neighbours, and any health impacts is vital if legal action becomes necessary. As for selling the flat: unresolved leaks and nuisance problems can affect its value or saleability, so resolving the issues first is best. Legal advice is highly recommended before taking drastic action. Kathryn Cooling, an associate in RWK Goodman's property disputes team, says: There are a lot of issues here, but let's start with the missing lease, because that's fundamental. When you buy a leasehold property, your legal rights, responsibilities, and even what you actually own are defined by the lease. Without it, a solicitor can't confirm what your obligations or entitlements are. If the seller didn't have a copy of the lease, you'll need to track it down - either from the landlord, the management company or the Land Registry. If that fails, you may need to negotiate a replacement lease with the freeholder. Frankly, I'm surprised your conveyancer let the sale go through without the lease. That could be a case of professional negligence, depending on the advice you were given at the time. You might want to look into that separately. Onto the leaking water pipe—you describe it as a shared pipe. Typically, any water pipes that serve more than one flat are considered communal services, and maintaining those is usually the responsibility of the freeholder or property management company. It's worth reporting this formally to them if you haven't already. If it is their responsibility, you may still need to co-operate with them on repairs by giving access to the pipe, but at least it takes one thing off your plate. As for the toxic fumes, if your neighbour is creating a persistent smell that affects multiple properties, your local council can step in. Under the Environmental Protection Act 1990, this could be considered a statutory nuisance. Most councils allow you to report these issues online, and if an investigation supports your complaint, they can take formal action to stop it. If you are looking to sell the flat, these issues are all likely disclosable - meaning you'd need to inform potential buyers about the leak, the fumes, and especially the missing lease. Unfortunately, this could make your flat very hard to sell. Given all these complications, I strongly recommend that you get independent legal advice regarding your lease and the previous conveyancer, escalate the leak and fumes to the management company and local council respectively, and consider resolving these matters before attempting to sell. How to find a new mortgage Borrowers who need a mortgage because their current fixed rate deal is ending, or they are buying a home, should explore their options as soon as possible. Buy-to-let landlords should also act as soon as they can. Quick mortgage finder links with This is Money's partner L&C > Mortgage rates calculator > Find the right mortgage for you What if I need to remortgage? Borrowers should compare rates, speak to a mortgage broker and be prepared to act. Homeowners can lock in to a new deal six to nine months in advance, often with no obligation to take it. Most mortgage deals allow fees to be added to the loan and only be charged when it is taken out. This means borrowers can secure a rate without paying expensive arrangement fees. Keep in mind that by doing this and not clearing the fee on completion, interest will be paid on the fee amount over the entire term of the loan, so this may not be the best option for everyone. What if I am buying a home? Those with home purchases agreed should also aim to secure rates as soon as possible, so they know exactly what their monthly payments will be. Buyers should avoid overstretching and be aware that house prices may fall, as higher mortgage rates limit people's borrowing ability and buying power. What about buy-to-let landlords Buy-to-let landlords with interest-only mortgages will see a greater jump in monthly costs than homeowners on residential mortgages. This makes remortgaging in plenty of time essential and our partner L&C can help with buy-to-let mortgages too. How to compare mortgage costs The best way to compare mortgage costs and find the right deal for you is to speak to a broker. This is Money has a long-standing partnership with fee-free broker L&C, to provide you with fee-free expert mortgage advice. Interested in seeing today's best mortgage rates? Use This is Money and L&Cs best mortgage rates calculator to show deals matching your home value, mortgage size, term and fixed rate needs. If you're ready to find your next mortgage, why not use L&C's online Mortgage Finder. It will search 1,000's of deals from more than 90 different lenders to discover the best deal for you. > Find your best mortgage deal with This is Money and L&C Be aware that rates can change quickly, however, and so if you need a mortgage or want to compare rates, speak to L&C as soon as possible, so they can help you find the right mortgage for you. lll
Yahoo
18-05-2025
- Business
- Yahoo
‘No one will buy my mum's retirement flat despite a £100k price cut'
For three years, Jeff Clarke has paid £900 a month in service charges for a retirement flat he does not occupy. The property belonged to his 95-year-old mother, Dora, who left it vacant when she moved into a care home. Finding a buyer is proving difficult, but keeping on top of the service charges is nigh-on impossible. Now, he is being forced to sell his own home to keep up with the charges and his mother's care fees. Mr Clarke, 71, from Windsor, is one of dozens of readers who have complained of sky-high fees on their retirement homes – leasehold properties designed for the over-55s. Labour is facing fresh criticism for failing to 'get a grip on this scandal' and delaying reform of the sector. The Leasehold Reform Act 2024, introduced by the Tories but pioneered by the current Government, has promised an overhaul to service charges and banned developers from selling new houses as leasehold properties. But it notably exempted retirement homes from the proposed ban – a loophole Labour has failed to close. Campaigners said it amounted to yet another betrayal of pensioners after 10 million retirees were stripped of winter fuel payments. And families like Mr Clarke's have been feeling as though they have a 'millstone around [their] neck.' Dora first moved into Lynwood retirement village in Ascot in 2017 when the service charges were just £518 a month. Five years later, her health seriously deteriorated and she was forced into a care home. In that time, her service charges also rocketed by 73pc. It means her son is paying for both her service charge and an extra £1,000 towards the care fees. The Lynwood flat was put on the market for £350,000, the price it was originally bought for, but the price has since been cut to £250,000. Even so, it has had just seven viewings in three years. Mr Clarke cannot turn the electricity off at the property in case it is needed for a viewing. As a result, he claimed he has to pay an extra £20 a month for the standing charge. To make matters worse, last week, he was invoiced £96 for a new energy performance certificate, which he said 'rubs salt in the wound'. He now plans to downsize from his current home. The decision was in part due to the service charges, but also a serious accident which reduced his mobility. The situation is even more catastrophic for Dora, whose investment in the flat has evaporated. He said: 'My mother now has nothing. She doesn't have a penny to her name.' Lynwood Village is run by automotive charity, Ben. Small print in the contract means that once Mr Clarke does manage to sell the property, he will have to pay the provider 1pc of the sale price for every year the flat was owned. Rachel Clift, chief executive of Ben, said property prices at Lynwood Village are 'stable and sales are steady', but acknowledged it can take a while for properties to sell in this 'niche sector and difficult market'. She added: 'We are sorry to hear about the challenges that this individual has experienced. We are fully committed to providing a supportive community, and we would be happy to speak with this individual directly to explore what else we can do to help.' Retirement homes are leasehold properties, usually with leases of between 125 and 999 years, and are specifically designed for over-55s. They boomed in popularity during the 1980s and remained attractive well into the early 2000s. As of 2019, there were 730,000 retirement housing units in the UK, according to the Elderly Accommodation Counsel. However, in recent years, their appeal has dramatically waned as complaints mounted among those early buyers. This is due to their hefty service charges, which are payable whether or not the property is lived in. Owners must also pay ground rent, generally between £400 and £500 per year. Ground rent has since been banned on the sale of new retirement homes but this does not apply to re-sales. The issue has been compounded by the double council tax raid on second home owners which has swept up the families inheriting these properties. The Leasehold Reform Act 2024 was brought in by the previous Conservative government to strengthen leaseholder rights. It aimed to improve the 'transparency of service charges and give leaseholders a new right to request information about service charges and the management of their building'. But it contained loopholes which allowed developers to sell new houses as leasehold properties, for instance if they are part of a retirement village. Helen Whately, shadow pensions secretary, said: 'This is yet another example of Labour not keeping their word. It's just like when they said they wouldn't remove the winter fuel payment, only to then betray 10 million pensioners the first chance they got. 'With each day it becomes clearer their pre-election promises aren't worth the paper they were written on.' Dennis Reed, of charity Silver Voices, said: 'In some cases, the service charges amount to daylight robbery of vulnerable older people. It is essential that legislation provides a fair framework for such charges. 'Older people are already struggling to cope with rising energy and food prices, cuts to winter fuel payments, poor social care support and large council tax bills, so we need extortionate service charges in retirement flats like a hole in the head. In April 2024, Labour U-turned on its own promise to scrap leaseholds in its first 100 days of power. Instead, it pledged to 'bring the feudal leasehold system to an end' without committing to a timeframe. In March, the Government published the Commonhold White Paper, which will be followed by a draft Leasehold and Commonhold Reform Bill in the second half of this year. Again, retirement homes will not benefit from exemptions and were excluded from the recommendation to ban exit fees. It means owners like Ann Townson will have no protection from soaring costs. The 78-year-old moved into a retirement village in Harrogate. At the time, it seemed like the 'ideal solution' as she struggled with health and mobility issues. However, now she cannot keep up with the service charges and ground rent which cost her £1,047 a month, which has rocketed from £731 when she first moved in four years ago. She said: 'It will use up all my savings as the cost per month takes up more than half of my pension. You have absolutely no control over the costs. 'I would never have moved here if I had known what I know now.' Paula Higgins, of the Homeowners Alliance, said: 'Retirement homes should not be exempt from plans to ban leasehold houses. 'Buyers of these properties often face huge hidden costs. In many cases, it's the children who are left to shoulder these financial burdens after their parents pass away.' A spokesman for the Ministry for Housing, Communities and Local Government said: 'Far too many leaseholders across the country are being asked to pay unreasonable and extortionate charges, including people living in retirement homes. 'We are determined to fix this, which is why we will consult this year on detailed plans to drive up transparency of service charges and hold landlords to account for the money they spend.' Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
