March 25, 2017

Welcome to Spire View, our commonhold retirement paradise

Please follow and like us:

SpireView10– 16 commonhold properties in Pickering, North Yorkshire, originally for over-55s
– Built by New Zealand architect, who did not exploit the monetising possibilities of English leasehold law
– Swimming pool, guest suite, communal gardens, orangerie, underfloor heating, communal boiler
– Three still for sale. £2,000pa service charge

 

Commonhold seems to be working just fine for David and Teleri Robinson. But then it works just fine in the rest of the world outside England, too.

Commonhold seems to be working just fine for David and Teleri Robinson. But then it works just fine in the rest of the world outside England, too.

Spire View in the attractive market town of Pickering, North Yorkshire, is a tidy, very well designed complex of 16 houses and flats set around communal gardens and a swimming pool.

But far more interesting than that is that it is also one of only 15 developments in England and Wales built with commonhold title.

This means no monetising freeholder; no working the angles of leasehold; no high-handed threats of forfeiture from debt-collecting solicitors; no ground rent demands deliberately sent to the wrong address to pitch leasehold owners into breach of lease; no dealing with the property tribunal with its unbalanced cost regime (and its indulgence of freeholder gamesmanship) and all the rest.

Commonhold was introduced by the Commonhold and Leasehold Reform Act 2002, which sought to end the racket of English leasehold law. But as it was not mandatory, it bombed.

Spire View is one of a handful of places where commonhold was introduced, but does it work?

Well, it does according to David Robinson, 66, a retired logistics manager, and his wife Teleri, 60.

Two years ago, he bought a two-bedroom flat at Spire View, originally for over-55s but now open to all, paying £160,000, nearly half the £300,000 price it was advertised at in 2008. He had seen an article about the site in Yorkshire Life magazine.

“We had never heard of commonhold,” Mr Robinson explains. “But once we understood the concept we decided to buy as the property ticked all the boxes.

“The rooms are larger than other retirement sites, built with high end materials and well designed.”

Spire View is a well thought out scheme surrounding communal gardens and a swimming pool. Best of all, there are no angles for leasehold gameplayers

Spire View is a well thought out scheme surrounding communal gardens and a swimming pool. Best of all, there are no angles for leasehold gameplayers

Spire View was the project of New Zealand architect David Ball, and established with commonhold tenure, probably because he was more familiar with it rather than leasehold, which only exists in England and Wales.

The scheme, which had sold out off-plan, inevitably went bust along with so many others during the downturn. Those who paid deposits could not complete, and Spire View ended up on the books of RBS through its property company West Register.

This was ironical, as RBS will not issue mortgages on commonhold title, even the ones it owned.

SpireView6Sitting on the books at RBS as a distressed property asset, very little effort was made to sell off Spire View until about three ago. Now, nine of the properties have been sold, all to cash purchasers.

“We believe there have been people wanting to buy who needed a mortgage, but although there are supposed to be lenders on commonhold title, including the Yorkshire Building Society, they eventually pulled out,” says Mr Robinson.

“And some have been advised against commonhold by their solicitors.”

Sales of three properties are being handled by a branch of Hunters estate agents in nearby Malton. A further three have just been sold.

“Sales have been sluggish, but I do not know why apart from the unfamiliar title. These properties are a bargain and if marketed in London would be sold as second homes,” he says.

Even with all the unfamiliarity of commonhold, the Robinsons reckon Spire View is a far better prospect than an Anchor retirement site in Pickering. Here re-sale prices are £60-70,000 for leasehold flats which originally sold for £120,000 when new, Mr Robinson says.

Service charges are currently £33,000 a year for the entire site, so around £2,000 a year for the Robinsons.

As a commonhold structure Spire View functions without problems. Resident-owners are the directors of the management company, Pad 55 Pickering Commonhold Association Limited.

They make decisions about service charges for the communal boiler, swimming pool and gardens. There is an orangerie which is also used for communal meetings, and a guest suite that charges £15 a night for visitors who cannot be accommodated in the properties.

There are contributions of 0.75 per cent of sale price into the contingency fund.

The only hiccough was that RBS’s West Register decided to play games familiar to leaseholders by wrongly taking control of the management company.

SpireView2It altered the articles of association of Pad 55 Pickering Commonhold Association Limited, which contrasted with sales documents saying that commonhold homeowners would be in charge.

The involvement of the local trading standards authority ended this.

Shortly after, West Register sold the remaining flats to Tele Real Trillium, which is now trying to offload them.

“We are delighted with Spire View,” says Mr Robinson. “It was very difficult to get any information about commonhold title. But here it has proved to work fine.”

The only danger that LKP can see is that the unsold properties do need to be sold off and to individual owner-occupiers. If a majority were controlled by a property company, the games might start …

More details here

SpireView8

SpireView5

Comments

  1. Michael Epstein says:

    I believe West Register was set up by RBS to handle “distressed” property assets.
    It was the subject of very heavy criticism in the Tomlinson report that refered to apparent conflicts of interest, in that it appeared that RBS wouls seize distressed property assets having valued them at around 50% of book price and sell them on at a substantial profit , Following the report West Register was demerged from RBS.
    RBS, of course were the bank that were heavily involved in the complicated rescue of Peverel/fFrstport and hold debentures on all Peverel/Firstport assets.

  2. Dear Scourge,

    Not even the half of it. RBS (or Lloyds) … but anyway as it happens, us … issued loans on thousands of flakey property assets – courtyards, balconies, flowerpots in the Tchenguiz empire.

    Putting up a loan for Peverel was one of the more rational decisions.

    The oddity here is that West Register did nothing. Nor is Tele Real Trillium really break out in a sweat.

    They probably think Spire View is a bit stale … compared with a glittering site with fluttering flags, and uniformed marketeers selling … er … tiny flats with £450 ground rents and leasehold tenure at £280,000.

    It is astonishing.

  3. Michael Epstein says:

    Lending on flowerpots in the Tchenguiz empire?
    Perhaps RBS thought they were investing in the Fuchsias Market?

  4. Michael Epstein says:

    For the record, I believe those that have bought properties at Spire View, have made a sensible purchase at a realistic price, and will come to prove that if done properly retirement development living can be very positive.
    Maybe, because a retirement development flat is sold not just as a property but as a lifestyle, a notional value is put on it that adds to the purchase cost.
    I would strongly recommend that before anyone purchases a new build retirement development flat,to look at the selling price of an equivalent non retirement development flat ? It could well be 80-100,000 pounds cheaper. Largely that reflects the notional value for the “retirement” element of the property. That part of the valuation is the most vulnerable to a fall in value.
    Potential purchasers should look at the property values of other retirement developments. Has their value fallen?
    Then find out about the level of service charges. How much have they increased over the years? Have developments retained their live in house managers? Are residents happy?
    Once satisfied, a purchaser should rent a property for a year, before committing themselves to buying, if only to see if they like the lifestyle.

  5. I notice this Carlex report states :

    The scheme, which had sold out off-plan, inevitably went bust along with so many others during the downturn. Those who paid deposits could not complete, and Spire View ended up on the books of RBS through its property company West Register.

    This was ironical, as RBS will not issue mortgages on commonhold title, even the ones it owned

    Is this because the RBS or Council of Mortgage Lenders refuse to offer mortgages to the buyers who paid deposits on Commonhold ?

  6. Are there any other lenders refusing to offer mortgages for financing Commonhold title property ?

    RBS ( Royal Bank of Scotland ) is one of those banks which exists on government support and financed by taxes levied on UK tax payers.

    Nicola is set for another attempt to break away from EW & NI . Will she take RBS with her or just dump the debt ?