Proposed Leasehold Reform: Opportunities for negotiation

Friday, 19th February 2021
Leasehold Valuations

It is over a month since the Housing Secretary’s announcement on Leasehold Reform. We wrote are response shortly after and have been advising numerous clients, new and existing on what this means for them.

Our pithy answer is “there is great opportunity but it all depend on your personal circumstances”. The vast majority of clients already entered into negotiations have chosen to continue, but with a renewed and bolder attitude that reflects two things:

  1. that the quantum of the future savings are still very much an unknown but
  2. there are is now an opportunity to push for greater savings now

Whereas before, if a client withdrew their claim, they were bared from reapplying for a further 12 months and they were certain to pay a higher premium on account of a shorter lease, higher property values and a system that only ever leant more favourably towards freeholders.

New Attitudes

What the January announcement has changed is that some clients are viewing the consequences of withdrawing as an option that could now have positive consequences and bring opportunity to save money.

Each case is weighed on its own merits, the client’s attitude to risk and urgency to extend but we are now pursuing a number of negotiations with clients that have set  lower target for their premium, above which they will walk.

New Instructions

We also have engaged new clients who are engaging with their freeholders without serving notice (often called the informal route) with the simple understanding that there are risks for both sides:

There is a risk for the leaseholder to extend now under the current methodology given that in the next 4 years, they are likely to work under a model that sees them pay less.

There is a risk to the freeholder to have the leaseholder wait until the reforms come in and likely pay a lower premium.

We will see in the coming months how negotiations unfold, but it is certainly a very interesting time in the world of extension and enfranchisement and good to see all be it the potential balance of power shift in favour of leaseholders.

If you are considering extending or enfranchising please call or email our expert team who will be very happy to advise.

I had a really positive experience with Shaun Blake at Peter Barry. The survey was very thorough and Shaun was on hand to answer several follow-up questions I hand. I would recommend them to anyone.
Requested a level 2 survey with Peter Barry and was very happy with the service, the survey goes above and beyond what I have experienced before and gave a very thorough breakdown of the risks and what next steps both I and the solicitor should take. I highly recommend going with them!
Response from the owner:Thank you for sharing your experience working with Peter Barry Surveyors.
I’m using them to help with lease extension and provide valuation, survey and advise on same. Still in the process, but they have very quick, efficient, professional and also helpful to date.
Lease extension is a tricky process so having them deal with this efficiently and provide clarity has been so welcome.
Response from the owner:We are pleased to hear how useful you have found our service.
Peter Barry offers an efficient and effective service. Helpful advice on various levels of homebuyers reports. It was so helpful to be able to talk things through with David Breeze. Recommended.
Response from the owner:Thank you for your recommendation Mr Greenwood.
Administrator Joanne was super quick to get me into their system and assigned Surveyor, David Breeze. David is delightful, wonderful, knowledgable, even helpful after surveying the property to assist me with outstanding tasks to make sure I was comfortable and understood the reports.
Response from the owner:We are pleased to hear that you were so satisfied with the service you received from David.
Excellent customer service.
Jaynell was extremely helpful and David Breeze provided us with a very comprehensive and detailed report.
We welcomed the opportunity to speak with him before and after the survey. He answered all our questions and addressed our concerns by recommending possible solutions. I have already recommended him and all at Peter Barry.
Thank you for a very positive customer experience.
Response from the owner:We appreciate your recommendation & positive feedback, thank you.
js_loader
Call Now Button