24 January 2018
Leasehold enfranchisement specialists, Leasehold Solutions, says today’s landmark ruling by the court of appeal in the case of Mundy v. the Sloan Stanley Estate, is a “devastating outcome” for leaseholders, as they will be forced to pay even more for lease extensions and freehold acquisitions.
The decision to rule in favour of the Sloan Stanley Estate, a wealthy landowner with numerous freeholds in Chelsea, upholds a previous verdict by the Upper Tribunal (Lands Chamber) in May 2016.
The outcome means that an alternative relativity graph developed by James Wyatt of Parthenia Valuations, which would have lowered the costs for lease extensions where the remaining lease length has dropped below 80 years, cannot be used to calculate the value of a lease extension. An estimated 2.1m homes in England and Wales have leases of less than 80 years.
Louie Burns, Managing Director of Leasehold Solutions, said: “This verdict is an absolutely devastating outcome for leaseholders up and down the country, not just those living in Prime Central London. It is so disappointing to see that yet again the courts have backed the interests of wealthy freeholders.
“The court’s decision to uphold a lower relativity in leasehold valuations means that freeholders will receive even more money from leaseholders, as leaseholders will now be forced to pay more for their lease extensions – to the tune of many millions of pounds.
“The Parthenia Valuations model estimates that leaseholders are currently being overcharged by £480 million a year. Over the past two decades that’s a staggering £9.6 billion that has been taken from householders due to flawed valuation methods that have favoured freeholders at the expense of leaseholders.
“Leasehold Solutions has been campaigning for reforms to the leasehold system for the past 15 years, and addressing the inherent failures of existing methods of valuation – which have always favoured the interests of freeholders – has been one of our key arguments. Unfortunately the financial power wielded by freeholders presents a significant barrier to meaningful reform.
“The Government has recently said that it is willing to tackle unfair practices in the leasehold market, so it is extremely disappointing that the courts have yet again ruled in favour of wealthy freeholders and their lackeys, all of whom have a vested interest in maintaining the unjust status quo.”
“This verdict is an absolutely devastating outcome for leaseholders up and down the country”
MD Leasehold Solutions