FLAT BROKE

Two escape routes if high charges and problems with a leasehold property leave you fed up or...

MORE than half of leasehold owners have admitted they regret buying their property, in the first ever independent national survey of leaseholders. The National Leasehold Survey, organised by lease and property law firm Brady Solicitors, found that more than two-thirds of leaseholders have little or no confidence in the ability of their managing agent to deal with a problem.

Experts say it should send a clear message to the Government that changes to the rapidly growing leasehold sector are necessary.

According to the Land Registry, leasehold properties made up 43 per cent of all new-build registrations last year, compared with just 22 per cent in 1996.

Both first-time buyers seeking a cheaper property and retirees looking to downsize are big purchasers of leasehold property. But many buy without realising that leasehold tenure is heavily weighted in favour of the freeholder who owns the building.

Extra costs are leaseholders’ biggest bugbear. Flat owners pay an annual ground rent to the freeholder; monthly or annual service charges for the upkeep of the building; and additional bills for ‘major works’.

With freeholders having little interest in keeping costs down, bills can be both high and unexpected. Four in ten leaseholders who responded to the survey ‘strongly disagreed’ with the statement that service charges represent value for money.

Flat owners fed up with large bills and poor service have two possible routes of escape. They can either choose to go down the ‘right to manage’ route or buy the freehold, also known as collective enfranchisement.