Landlords are hoping commonhold will deliver lower service charges, according to new research from Landbay.
Almost half of the landlords polled (46%) said they were hoping for lower service charges under the new system. Just over a fifth (21 per cent) said they were looking forward to better-maintained buildings and the opportunity to charge higher rents as a result. One in 9 landlords (11%) said commonhold would help them retain occupants longer. One in 8 landlords (12%) had various other reasons for embracing commonhold.
While 91% of the landlords polled by Landbay said they hoped for improvements under a new commonhold system, 9% said they couldn’t see any benefit.
Rob Stanton, sales and distribution director at Landbay, said: “It’s clear where landlord preferences lie: nine in ten landlords believe commonhold could slash service charges and deliver blocks that actually stay in top shape. Nearly half are banking on lower bills, while one in five sees better-maintained buildings unlocking higher rents and happier tenants. The Government has lit the fuse; now landlords want them to deliver.”
Previous polling from Landbay has found that nearly two-thirds of landlords (64%) do not believe the Government could deliver leasehold reform by the end of this parliament.
A white paper published in March stated the sale of new leasehold flats would be banned and commonhold “reinvigorated” with a new legal framework.
In March, the government said it would ban the sale of new leasehold homes by the end of this parliament in what ministers described as the end for a centuries-old “feudal system”. The government says it wants to move to a system of home ownership that is more in line with the rest of the world, known as commonhold, where homeowners own a share of and have control over the buildings in which they live.
Under the current leasehold system, third-party landlords known as freeholders own the building and a leaseholder buys the right to occupy a flat within it for a fixed time period.
Landbay asked landlords if there were practical reasons that would prevent them from embracing commonhold. Almost half mentioned the threat of mismanagement by commonholders (49%), while a similar number worried about the need to secure 100% agreement among leaseholders (49%). More than a quarter (26%) were worried about their lack of liquidity and said they wouldn’t have the cash reserves. Just over a fifth (22%) said their current freeholder ran their property well.
Landbay’s research polled the views of landlords owning approximately 3,000 properties throughout England and Wales.
