Leasehold vs Freehold
Now that the General Election is a distant memory and the Queen’s speech is almost forgotten perhaps the Chancellor of the Exchequer will reveal in his forthcoming Budget:
1. How enfranchised Housing Association properties are going to be replaced once Right to Buy options are exercised. Housing Associations, currently provide a very important option for ‘many’ to start on the ‘housing ladder’ by ‘staircasing’ value. This means that the owner/occupier buys a % of the house/flat only and rents the balance of ownership from the Housing Association.
2. What is the Government going to do to facilitate the building of 1.5m new homes in this parliament?
If you are on the housing ladder, you can be confident that your property should keep climbing upwards and your home should increase in value. Shared ownership via Housing Associations is vital to this process.
However, if your home is leasehold [flat or a house], you own a ‘wasting asset’ .
Is your lease long enough? In 1975, 99 years was sufficient; forty years on (2015), 125 years is now barely sufficient. At Scrivener Tibbatts we really can help……………… call us today for up to 30 minutes’ of free advice.
On a technical note, “RELATIVITY” [the relationship in percentage terms of freehold or share of freehold value to reach existing or short lease value] is in the news yet again. Valuers need to calculate existing/short lease value to calculate ‘marriage value’.
Hedonic regression (HR) is being promoted again in a series of conjoined appeals to be heard in the Upper Tribunal. This follows the failure of HR to be accepted in the appeal: Latifa Kosta vs The Trustees of the Phillimore Estate  UKUT 0313 (LC).
At Scrivener Tibbatts we welcome these progressive challenges, which are necessary to keep the art and science of valuation at the highest possible standard. However, a suggestion that valuers, who do not subscribe to HR indices and calculations, might not be serving the best duty of care to their clients is unnecessary.
While HR has its supporters, it has its detractors among those of our profession, who specialise in this work in equal measure. An excellent resume of the ‘Kosta’ case is to be found at http://bit.ly/1dNsyaV