Icelyn Goddard, 86, has lived in a maisonette in Wembley, north London, for more than 40 years. Although she paid off her mortgage 20 years ago, she still doesn’t own her own home and was recently told she needs more than £200,000 to ensure she can live there for the rest of her life.
Mr. Goddard is a leaseholder and has 11 years left on his lease. In July, her building’s freeholder’s solicitors told her she would need to pay £212,000 plus valuers’ fees to extend the building for 125 years. She was told that if the deal was not completed within three months, the terms offered would be amended.
She said recent valuations of her home showed it would be worth £350,000 on a long-term lease. It would be very difficult for her to pay about two-thirds of that to extend the existing lease. However, if she does not do so, the title will eventually expire and her home will become the property of the freeholder.
It’s causing me anxiety, sleepless nights, loss of appetite, and sadness overload Aicilyn Goddard
“I don’t think I’m the only senior who is facing these financial hardships even though they paid off their mortgage years ago,” Goddard said. “My situation is dire and unjust. The choice I face is to be evicted from my home or to be subject to unreasonable financial demands due to the terms of my tenancy agreement.”
She feels the situation is a “legal fraud”. she says: “It makes me anxious, I can’t sleep at night, I have no appetite, and I feel too sad.”
Goddard is right that there are others who have had similar experiences. Levi Thomas and his wife bought a house in north-west London in 1974. He believed that once the mortgage was paid off, the house belonged to him and his family. But instead he has been paying £1,040 a month to live in the same house since 2008, putting a huge strain on the 86-year-old’s family finances and leaving nothing for his children.
At the time of the purchase, the couple had just arrived in the UK from Jamaica and were not familiar with how the leasehold system worked. They were unaware that they had a lease on their home that needed to be extended before it expired. They had 34 years left at that point, and with the clock ticking, they didn’t realize until they received a letter warning that their lease was about to expire.
Thomas was shocked to discover that the mortgage he had paid off meant nothing. In 2008, the family sent a letter to the freeholder pleading with Thomas to extend the lease. Instead, however, the term expired, the property reverted to the freeholder, and Thomas was given a secure lease on the land. Surprising to many, the freeholder says the rent is below market value for a property of its size in the area.
The plight of people who buy leasehold homes, whether from private developers or former council estates, and face crippling service charges has been widely reported. But we don’t often hear from people whose leases have expired or are about to expire.
In response to concerns about the many problems that leasehold arrangements can cause, the previous government passed the Leasehold and Freehold Reform Act 2024, which expands the rights of leaseholders.
There are growing calls for the passage of secondary legislation necessary to implement this law. The bill would prohibit developers from selling new homes as leasehold properties, make lease extensions cheaper and extend the standard lease term to 990 years.
The new government also plans further reforms with the introduction of the Leasehold and Co-ownership Reform Bill.
If you currently have only a few years left on your property’s lease, renewing or extending it can be very expensive. If the lease term is less than 80 years, an additional cost called marriage value is factored in. This is based on the increase in property value if the lease extension is granted. The money is paid to the freeholder.
The previous government passed the Leasehold and Freehold Reform Act 2024, expanding the rights of leaseholders. Photo: Christopher Thomond/Guardian
Giles Pekar, of Anthony Gold solicitors specializing in leasehold agreements, said: to a percentage of the freehold or to the common interest of existing leaseholders. ”
Lawyers for the freeholder who owns the freehold of Mr Goddard’s property did not respond to requests for comment.
Tony Beaumont, managing director of Hamways, which manages Thomas’s property, said: “Thomas has been a guaranteed tenant for over 16 years and is always available to assist with any repairs or rental concerns.” said.
Thomas’ daughter, Janice Lamont, said: “He is now 86 years old and it is very difficult for him to pay this amount every month. I understand that the freeholder is legally entitled to do so, but at his age, he had to pay a mortgage a long time ago. My father is really struggling and cannot afford to leave home for his children.
“The freeholders were not prepared to take into account the fact that my parents did not understand at the time of their purchase what it meant that there were only 34 years left on the lease on the property. They should never have bought. But I didn’t know that at the time.”
Mr Arelo Omiyore, a senior advisor at the Independent Leasehold Advisory Service, said: “Some leaseholders are not aware of the fact that their property leases are granted for a finite number of years. There is a possibility that it will be discovered if the extension is not extended.” their lease. It doesn’t matter that you don’t know your right to do so.
“Unfortunately, the fact that their mortgage is paid off is irrelevant. If the lease is not extended and the original term ends, the asset reverts to the landlord with all equity.”
The new legislation prohibits freeholders from applying matrimonial values, so the cost of lease extensions should be significantly reduced once introduced. The law also gives leaseholders of apartments and maisonettes the right to extend their leases for a further 990 years for just a peppercorn or without ground rent.
Pekar said banning marriage values could change the situation for Goddard and others. “Hopefully this will significantly reduce the amount the leaseholder in your case has to pay, but it still won’t be cheap as you only have 10 or 11 years left,” he says.
Floyd Forbes, who along with his sister Judith Forbes supports their mother Icelyn Goddard, said: This should not happen to older people who have worked hard all their lives. My father worked for British Railways all his life and my mother was a senior care worker. They always lived righteously and contributed to society. It’s the vulnerable people like my mother who are caught up in this problem. ”
