12/12/2018
I was asked by the Law Commission for my top 3 that need addressing to promote commonhold. Other than the law which is their remit I said:-
1) Uneven playing field. Lack of being able to play an even playing field. NOT being able to offer "Help to Buy" which has to be recognised as a leading sales motivator is a serious handicap.
Simply reversing the "Help to Buy" in favour of commonhold will see Commonhold being taken up widely and give it a major boost and immediately help more vulnerable buyers falling into this Leasehold trap.
2) Miss-selling. Misunderstanding of the different types of ownership reaches through all levels of the property market including professionals.
Changing the requirements for builders and estate agents to apply a correct description, For Sale, For Lease, Lease with Freehold, Freehold with Commonhold areas. etc - I am sure someone who is a better marketeer will find some innovative descriptions however these products are vastly different animals and need to be differentiated. Only then would buyers query and start to understand the nuances of ownership. I believe that would enhance immediately market awareness and its already capable of being applied there with the support of the Advertising Standards Agency. I understand they have confirmed they are reviewing, as of todate they haven't applied any guidance whatsoever.
If at point of sale there was also a "Key Features", a bit like obtaining a bank loan, where the type of ownership, costs, overheads, annual fees were given at first interest that would save a lot of buyers incurring significant expenses, legal, survey, mortgage application etc only to find at the last minute there are onerous terms or clauses.
3) Understanding the products. Again an element of market awareness but both Leasehold and commonhold are confusing to many and I have described it so many times and have resorted to a quote:- " What annoys me is that I fell for it.
If I leased a car I wouldn’t expect to own it yet I had no clue that I didn’t own my Leasehold house. "
Georgia Harry commenting on Leasehold
This analogy is understood by many people and a good base point to develop the conversation and understanding further. Your lists of advantages of commonhold etc will also be an invulnerable tool.
Other:- The lack of availability from Mortgage lenders can be resolved with a promotion with the Mortgage Lending Council who provide the guidelines for most of their members. If they advised that Commonhold was a good product about to happen then most would prepare their documentation, expectation and acceptance. I believe it's not generally available only because it's not generally asked for! I know that's outside your remit however maybe the All Party Parliamentary Group, or LKP or National Leasehold Campaign could be funded to assist instead of funding the impotent Lease.
