Forsters recognised in Spear’s Property Index 2026
11 March 2026
News
Lawyers in our Real Estate practice have been recognised once again in Spear’s Property Index 2026. This year includes one new addition to the rankings: Senior Associate, Georgina Haddon.
The Index features the industry leaders advising private clients on prime property. The Index is testament to our investment in curating a team of residential property specialists with the ability to advise clients on all of the legal particularities and peculiarities they face on their property journey.
Commonhold may not be a ‘silver bullet’ for leaseholders
12 February 2026
News
Last week, the prime minister announced – via TikTok no less – the publication of its long-awaited draft Commonhold and Leasehold Reform Bill, a major step towards its manifesto promise of ending the “feudal” leasehold system.
The Bill will seek to cap ground rents on existing long residential leases at £250 a year(reducing to a peppercorn after 40 years), ban new leasehold flats and abolish forfeiture – the process through which leaseholders can lose their home by defaulting on a debt as low as £350. It will also explore moving leaseholders to a commonhold model whereby homes will be owned without any term limitation, and homeowners will control how their buildings are managed.
The pros
The leasehold system has long been lambasted and so the reinvigoration of a more flexible tenure, such as commonhold (this time with some muscle), is welcome.
There are a number of benefits to commonhold, not least the flexibility and autonomy offered. Although the commonhold community statement (the document that essentially replaces the leases) is mostly prescribed, it will sit alongside local rules that can be tailored to individual buildings and amended where necessary, offering a degree of efficient adaptability that should be encouraged.
A uniform system where everyone lives by the same rules is also beneficial from a fairness standpoint, especially if based on a well-drafted commonhold community statement and local rules. The removal of third-party landlords and certain procedural elements, such as the section 20 procedure for major works, should also make management easier.
Just like Australia’s strata title and Japan’s unit-ownership system, leaseholders could even see their property values rise under a commonhold system due to their indefinite ownership, leading to higher property appreciation and greater buyer confidence. So the scope for tangible gain is high.
The cons
That said, a forced moved to commonhold may not be the silver bullet leaseholders are hoping for. It is still a form of communal living and a lot of the challenges leaseholders face under the current system could well persist under a new tenure.
First, commonhold does not offer a fixed contractual position in the same way a lease does and, as such, it can be changed. Although any change will require a vote taken by other commonholders, the group may have very different views, agendas and financial backing. The impact this could have on property values remains to be seen.
Second, the widely lauded concept that commonhold will give homeowners complete control is not strictly true. Budgets will be set by the directors of the commonhold association (the company of which all commonholders will be a member), with commonholders having little input and no right to challenge the reasonableness of maintenance and repair costs. The truth is that directors (rather than the commonholders themselves) will have significant power and authority; and worryingly, directors need not own a commonhold unit.
Third, commonhold probably won’t be cheaper than leasehold. Moving to a commonhold system won’t eliminate the underlying costs of building maintenance and management, it will just shift responsibility for those costs directly on to the owners. While leaseholders will escape ground rent, forfeiture risk and lease extension costs, the commonhold association will need to manage and pay for all capital expenditures, without a freeholder to share the risk or cost.
In cases where a reserve fund is not required in the existing leases, introducing one under commonhold could actually make it more expensive for commonholders on a month-by-month basis. And if a commonhold association has liquidity problems or becomes insolvent, there is no freeholder to step in.
Phased delivery
So how should the government introduce this system effectively to achieve its goals and keep its manifesto promises?
Introducing the new commonhold system in phases seems to be the most workable option, starting first and foremost with new developments. This will make sure that all relevant parties and the wider market understand the structure and can stress-test the mechanics of the system before it is rolled out for wider conversion.
Careful consideration must be given in particular to the legal and practical aspects of how commonhold can be implemented in complex developments, especially in schemes with a mix of residential and commercial space.
Upskilling professionals – such as conveyancers and lenders – will be key to the success of the new model. At present, only a limited number of professionals have had any experience of commonhold, so ensuring a new generation understands the necessary nuances will be essential. In the same vein, regulating the role of managing agents will continue to be important, albeit there is no sign that this is on the horizon.
Finally, arming existing leaseholders with appropriate knowledge of commonhold will be key to its successful implementation; ensuring expectations are managed, not only in relation to the rights that commonhold will afford but also with regards to the responsibilities and shortcomings the new system may bring.
This text first appeared in Estates Gazette on 3 February 2026.
Last but not leased? Commonhold to replace leasehold in latest Government plans
2 February 2026
News
HM Government have said in their press release on capping Ground Rents – “New leasehold flats will also be banned and homeownership strengthened thanks to groundbreaking legislation that will give people control over their homes and calls an end to the feudal leasehold system which dates to medieval times”.
This builds on the Leasehold and Freehold Reform Act 2024 which seems to have already removed the ability to create new leases of houses in S.1 of that Act. This means we might be staring down the barrel of a brave new world without leasehold property.
The question is, what does this mean? It seems likely that, if the legislation goes through, we will see flats becoming part of what the Government is calling “a revamped commonhold model”. This is, essentially, where you have the freehold of part of a building with shared ownership of and responsibility for common areas and services. Interestingly though, as of 30 June 2023, there were only 184 registered commonhold properties (despite being around since 2004); this represents less than 0.01% of the total housing stock. The question, therefore, is: if it is so good, why has it not been used more?
It is likely that this is partly because new build developers would favour a leasehold model. It is, however, also true that many leaseholders have preferred to go down the more well-trodden share-of-freehold route (where you form a company to co-purchase your freehold and give yourself a 999-year lease), some leaseholders actually do not want to have to co-own and manage a building and there is probably some general reluctance towards embracing the unknown.
There are definitely opportunities for leasehold to be reformed. There is a discussion to be had regarding ground rents and there are currently unnecessarily complicated tax issues when extending leases that form part of a share-of-freehold which, if not navigated correctly, can create penal Capital Gains Tax consequences on a surrender and re-grant of an existing lease There is a question, however, over whether removing leasehold altogether is the sensible alternative.
We have lots of case law and societal experience with them, meaning that leases are known entities that have worked in some shape or form for hundreds of years. Just because leasehold’s origins are medieval (as are the origins of many of the UK’s institutions and laws), it does not make them inherently flawed.
We may also see the law of unintended consequences play out, based on a strict reading of the legislation and proposals. For example, families will seemingly no longer be able to create leasehold interests as part of tax planning initiatives, for example,by granting a long lease of a property from one trust to another. It is also going to be interesting to see how the owners of leasehold properties find being responsible for coordinating the maintenance and management of their buildings which, especially on larger buildings, may be much more of a headache than simply relying on a landlord and a service charge.
These are bold proposals from the Government. This may, however, turn into a much more complicated change than they think with consequences that were not anticipated. There is a consultation open until 24 April 2026 but, it is difficult to say what will come out of that and the direction of travel generally is certainly away from a leasehold model.
A quick interesting note to end on is that the truly “feudal” form of land tenure, copyhold, was actually abolished just over 100 years ago by the Law of Property Act 1925. If anyone wants to really know about feudal land ownership, that is the one to look into!
Celebrating a century of the Law of Property Act 1925: A foundation of modern property law
30 January 2026
News
The Law of Property Act 1925 (LPA) a foundation of modern property law, marked its centenary in 2025 and came into force in January 1926. It is essential to reflect on its transformative impact on property law in England and Wales. Enacted to simplify and modernise the complexities of property ownership, the LPA laid the groundwork for a more coherent and accessible legal framework. It replaced archaic practices, streamlined conveyancing processes, and established clearer rules governing ownership, rights, and interests in land.
The LPA introduced crucial concepts such as the doctrine of notice, the distinction between legal and equitable interests, and the principle of registered title, which has evolved into the modern land registry system. By promoting the registration of land, the LPA enhanced security and transparency for property transactions, with the aim of reducing the risks of disputes and fraud.
Before the Law of Property Act 1925, property law relied heavily on common law and equity, leading to inconsistencies and overlapping principles. Different forms of ownership, such as freehold and leasehold added further complexities, and the lack of a centralised registry led to uncertainties regarding title and ownership. The case of Leigh v. Jack (1879), was one such example, in which the primary issue centred around a dispute regarding trespass and property rights. The court had to consider the principles of property law, including the doctrine of “exclusive possession” and how it affects claims of ownership. The case highlighted the complexities of property disputes, especially in the absence of clearly defined boundaries and rights, illustrating the inadequacies in pre-1925 property law.
Today, the principles enshrined in the LPA remain highly relevant. As urbanisation and property development continue to accelerate, the need for clear legal frameworks that protect property rights and facilitate transactions is more critical than ever. The LPA’s emphasis on clarity and efficiency has paved the way for innovations in property law, such as electronic conveyancing. While the LPA introduced essential reforms to streamline property transactions and clarify ownership rights; its effectiveness is inherently tied to the efficiency of the broader legal and administrative systems within which it operates. Delays in the Land Registry can significantly hinder the LPA’s intended benefits, leading to prolonged uncertainty in property ownership, disputes, and a lack of confidence in the integrity of property transactions.
It is vital to recognise the Law of Property Act 1925 not just as a historical milestone but as a living framework that continues to shape the landscape of property law in the 21st century.
Forsters acts for Caudwell in prestigious branded residences agreement at 1 Mayfair with Dorchester Collection
16 December 2025
News
Leading London law firm, Forsters, acted on behalf of super-prime property developer Caudwell on the appointment of Dorchester Collection to provide luxury services to residents at 1 Mayfair. The prestigious scheme on South Audley Street, with a GDV of over £2bn, will bring 29 new residences to market in the latter part of 2026.
Forsters brought together a collaborative cross-firm team including lawyers from its commercial and residential real estate teams, property litigation, and its hotels team to handle the negotiation of the bespoke agreements from both a legal and commercial perspective. The ability to draw on expertise from across Forsters enabled the firm to forward think risk and embed the agreed outcomes in the suite of documents. The Forsters’ hotels team expertise was integral to the negotiations with Dorchester Collection. Dorchester Collection was represented by Dentons; led by partners Chris Bennett and Rick Ross, the Global Chair of the practice.
Dorchester Collection, the mark of distinction reserved for the world’s most extraordinary hotels, including The Dorchester, as well as branded residences will provide bespoke luxury services including, concierge and other hotel-style services for residents.
The bespoke property management agreements will also see the provision of ‘housekeeping services’ from at-home dining and event management to pet care and personalised flower arrangement.
Helen Marsh, Partner, Forsters, said, “Forsters was delighted to work with the Caudwell team on bespoke property management arrangements with Dorchester Collection for 1 Mayfair. The breadth of legal expertise required to manage and finalise this deal is testament to the strength of our real estate practice. The management agreement is the cumulation of years of work with Caudwell, which included advice on the legal structures of the residences and the services provided by Dorchester Collection.”
Richard Bosson, Director of Caudwell, said, “The expertise and service brought to this agreement by the Forsters team was exemplary. The cross-practice team was able to bring a wealth of experience to the table and negotiate an agreement with Dorchester Collection that will ensure that the exceptional amenities and service provided at 1 Mayfair will be to the highest standards.”
1 Mayfair has 24 principal residences including lateral apartments, penthouses and townhouses, five further pied-à-terre and stately home inspired entertaining halls and lounges designed around a central garden. It will be complete with luxury amenities including a health spa featuring a 20-metre (65 ft) swimming pool, gym and treatment rooms, basement parking and 24-hour security, concierge and valet parking managed by Dorchester Collection.
The negotiation of the agreement was led by Helen Streeton, a Partner in the Commercial Real Estate team at Forsters.
Landlords challenged four core provisions of LAFRA as incompatible with their A1P1 rights:
Ground Rent Cap: Limits rent input in term calculation in valuation to 0.1% of Freehold Vacant Possession (FHVP)
Marriage Value Reform: The removal of marriage and hope value from the valuation
Cost Recovery Reform: Removes landlord’s right to recover statutory non-litigation costs
Exceptions: Whether certain categories of landlord/tenant should have been excluded from LAFRA
The impact of these reforms were considered individually and collectively, alongside broader reforms widening enfranchisement eligibility (e.g. removal of two-year ownership rule, 50% non-commercial threshold, requirement for landlords to take leasebacks of non-participating flats in a collective).
Who were the landlord claimants?
The claim was brought by six landlords: (1) the ARC group companies; (2) the Cadogan and Grosvenor Estate; (3) Abacus; (4) the Wallace Partnership Group; (5) John Lyon’s Charity; and (6) Portal Trust.
Legal Framework
A1P1 refers to Article 1 of the First Protocol of the European Convention on Human Rights (ECHR), which is incorporated into UK law by the Human Rights Act 1998. It protects the peaceful enjoyment of property by both natural and legal persons.
Under A1P1, property rights are protected but qualified. Interference is lawful if:
Objective: The objective of the measure is sufficiently important to justify the interference
Rationality: The measure is rationally connected to the interference
Less intrusive measure: Whether a less intrusive measure could have been used without unacceptably compromising the objective
Fair balance: Whether the impact of the rights infringement is disproportionate to the likely benefit of the impugned measure
Courts afford Parliament a wide margin of appreciation, especially in socio-economic policy such as housing.
Legitimate objective and rationally connected
LAFRA’s objective is to address “the inherent unfairness and imbalance in the nature of leasehold ownership”, and particularly the “wasting lease” problem that applies to all leaseholders. Leaseholders pay near-FHVP premiums to buy their lease, but are compelled to enfranchise as the term expires to preserve value and mortgageability.
While the existing enfranchisement legislation provided leaseholders with a legal route to address these issues, the payments that leaseholders are required to make to the landlord included elements which the Government concluded were unjustified (marriage value and the obligation to pay statutory costs) and others which were unfair (ground rent above 0.1% of FHVP).
The High Court found that this was a legitimate objective for the purposes of A1P1 and that the Ground Rent Cap, Marriage Value Reform and Cost Recovery Reform were all rationally connected with that objective.
Ground Rent Cap
The Ground Rent Cap was held to be proportionate. Parliament had evidence that ground rents above 0.1% FHVP impaired saleability and mortgageability. The cap removed only onerous rents and remained linked to FHVP, ensuring that price paid to landlords remained fair compensation.
Marriage Value Reform
The Marriage Value Reform was held to be proportionate. Marriage value was found to arise because leaseholders were compelled to become special purchasers as they needed to enfranchise due to the wasting nature of leases. Marriage value could not be realised in a third-party sale or if the lease ran its full course. Removing it was logical and proportionate. The landlord still receives market-related value (term and reversion), excluding marriage and hope value. Less intrusive alternatives (e.g. limiting the reform to leases already below 80 years) were considered inadequate to deal with the problem.
Cost Recovery Reform
The High Court held that the Cost Recovery Reform was proportionate. The Court found that enfranchisement differs from typical compulsory purchase (where it is common for the purchaser to pay the sellers costs). Enfranchisement is in a meaningful sense involuntary for both parties; landlords must sell under the legislation, and tenants must enfranchise due to the wasting asset problem. Requiring each party to bear their own costs mirrors open market transactions and does not deprive landlords of market-related compensation.
Cumulative Effect
The Court rejected the argument that the combined effect of reforms rendered LAFRA incompatible. The measures were A1P1 compliant individually and collectively, and removing barriers to enfranchisement did not undermine compatibility.
Exceptions
Challenges by John Lyon’s Charity (seeking a charity exemption) and Portal Trust (seeking exclusion of investment leases) were dismissed. The Court found that the inherent unfairness in the leasehold system which LAFRA was seeking to address applied to all leaseholders, and the Parliament was not required to differentiate between landlord types.
Next steps
The Government may now proceed with secondary legislation to “switch on” LAFRA. A consultation on deferment and capitalisation rates is expected. This will be controversial, as landlords have long argued for a lower deferment rate, and even a small change will significantly impact the savings to leaseholders. Landlords are likely to seek appeal, but the judgment is comprehensive and well-reasoned, so permission is not guaranteed.
Leaseholders will welcome the decision, as perhaps will some landlords, who will hope that it will give the certainty required to reinvigorate the enfranchisement market.
Forsters secures exceptional results in Chambers High Net Worth 2025
24 July 2025
News
Strong recognition across the board, including top-tier listing in new Landed Estates category
The 2025 edition of Chambers and Partners’ High Net Worth guide was published today, and the breadth and depth of Forsters’ expertise continues to be reflected throughout the rankings.
The guide, which ranks the leading professional advisors to the Private Wealth market based on extensive market research, recognises Forsters’ combination of established expertise, exceptional client care and up-and-coming talent, with clients saying: “Forsters has very high-calibre partners and excellent associates, with no weak links. They are resolute in pursuing their clients’ best interests while still being pleasant to deal with.” and “The team at Forsters have the ability to distil issues for clients. They are technically excellent, but it is their delivery and distilling of messages to clients which makes them a cut above.”
Forsters was ranked in six practices areas, with Band 1 listings for:
Continued recognition for Forsters in Spear’s Property Index 2025
20 March 2025
News
Lawyers in our Real Estate practice have been recognised once again in Spear’s Property Index 2025. This year includes two new additions to the rankings: Senior Partner, Natasha Rees, for her extensive expertise in ‘handling contentious leasehold enfranchisement cases and high-stakes property matters’ and Senior Associate, Poornima Andrews, for her ability to deliver ‘successful outcomes even in the most challenging circumstances’.
The Index features the industry leaders advising private clients on prime property. With more lawyers listed than any other firm, the Index is testament to our investment in curating a team of residential property specialists with the ability to advise clients on all of the legal particularities and peculiarities they face on their property journey.
Anyone who practices property law will recall 1925 as the year in which a comprehensive redrafting of English property law statutes was undertaken. The raft of legislation in that year included the first Land Registration Act which is therefore now coming up for its centenary. The purpose of that act was to consolidate earlier legislation relating to land registration and to facilitate the comprehensive registration of all property in England and Wales. Its centenary therefore provides a good opportunity to review the current state of registration.
Land registration had first been introduced for some London boroughs as early as 1899. Initially it was not compulsory to register transfers of land but this was bought in according to local authority areas over the following century so that by 1990 all transactions for value triggered first registration of the title. Take up of registration was therefore initially relatively slow and by 2004 only some 40% of land (by land area) had been registered. However, a broadening of the requirement for registration (for example to cover gifts as well as transfers for value) led to an acceleration of the process and by 2018 the Land Registry was estimating that 85% of all land in England and Wales had been registered. The latest estimate is that some 89% of land is now registered with around 26.5m Land Registry titles in existence.
In its 2016 five-year business plan the Land Registry included a section entitled “a comprehensive register” and set out an aspiration for all publicly held land to be registered by 2025 with all remaining private land to be registered by 2030. Almost certainly this plan was derailed by the Covid pandemic and it is interesting to note that the three year business plan published in 2022 makes no reference to completing the registration process. By that stage the Land Registry was presumably distracted by the need to improve its service following the disastrous collapse in its efficiency caused during Covid.
So, a century after the 1925 Act there is clearly still some way to go with at least 10% of land still unregistered. If you look at the registration map it is clear that in the countryside there are quite large swathes of agricultural land still unregistered, presumably because this land has not changed hands in the last 35 years. In due course this will therefore be registered. In urban areas there are small pockets of unregistered land and examination shows that these often relate to churches, schools and other communal facilities where there has been no change of ownership for a long period. This land might never be registered unless some form of compulsion is brought in. An interesting conclusion to draw from this is that it takes a very long time to change anything in UK property law. The government should therefore remain cautious when making promises to “bring the feudal system of leasehold to an end” within a few years – let’s watch this space.
Lucy Barber shares her views with The Times on Land Registry delays
20 December 2024
News
Across England and Wales, countless homeowners are facing stress and uncertainty when submitting applications with the Land Registry. Due to longstanding delays, and lack of staffing or funds, property owners are seeing transfers and registrations of ownerships taking at least a year or two to be registered, having to turn to their solicitors to help prove ownership to complete simple tasks like setting up utilities. For other concerns, like removing restrictive covenants, even after waiting years there can be no end in sight.
The backlog is partially due to stamp duty holidays during the pandemic leading to an increase in the numbers of registrations, but can also be attributed to a need for technical experts. When plans are assessed by a caseworker, years after the fact, any irregularities on plans or plots that need addressing become ultimately more difficult – the sellers won’t be around to help.
Speaking to The Times, I explained how we frequently see delays affecting our clients.
“One of my team checked to see how long it would take to register a simple freehold transfer [of ownership] and they were getting return dates of 2025 or even 2026. If you’ve got a freehold transfer, it’s a 50/50 chance it’ll come back quicky. If you’ve got a new lease for a home on a development you bought off-plan [before it was built], that’s almost certainly going to be a two-year wait before you’re registered as the owner.
Lots of people still feel very uneasy about the fact they are not yet the registered owner of their property. They also can’t send evidence to local authorities or utility companies that they own the property unless they’ve got a letter from their solicitor. We are writing lots of letters saying ‘we acted for this person and can confirm they purchased this property on that date’.”
Applicants can ask for prioritisation in some instances, but this doesn’t solve the overall backlog and delays. The industry is doing all it can to help the Land Registry and property owners, but more support is needed.
Still a long way to go for leasehold reform – Lucy Barber writes for EG
9 December 2024
News
Lucy Barber, Head of Residential Property, writes for EG on the latest update on the Leasehold and Freehold Reform Act 2024, and comments on how complex the task of reforming the enfranchisement industry will be.
The 2024 Act was sped through legislation in the wake of Rishi Sunak calling for General Election in July, but now “serious flaws” are being highlighted, requiring additional primary legislation before they can be implemented. The Government has prioritised elements of the Act that relate to building safety measures, leaving leaseholders waiting a little (or a lot) longer for the reforms they have been anticipating. The two year rule is set to be scrapped in January 2025, although this has not been considered much of a hindrance, however all else is subject to further consultation. This includes the Act’s ban on building insurance renumeration, and the Act’s provisions on service charges and legal costs, and the valuation rates used for calculating enfranchisement premiums.
The enfranchisement industry, a sector largely on pause for years, would benefit from a prompt decision on the valuation issues within the Act, including changes to deferment rates and capitalisation rates. However, these issues will not be looked at until the “serious flaws” in the Act are fixed. Unless they simply resolve to scrap the proposals to change the valuation basis of lease extensions, the industry will continue to wait in limbo and in addition challenges to the Act have now been initiated using the Human Rights Act 1988 which may delay things further.
As well as the discourse the current Act, the Government has recommitted to publishing a new draft Leasehold and Commonhold Reform Bill in the second half of 2025. The Bill is to be focussed on reinvigoration of commonhold through a comprehensive new legal framework. This would, however, bring changes to mortgages, insurance, conveyancing, and property management. Furthermore, flat owners will be compelled under these commonhold proposals to be the owners of the building and, as such, take on the responsibilities associated under the Building Safety Act 2022, amongst other ownership duties.
“For now, the position is still uncertain, the timing is uncertain and the eventual drafting of the legislation is uncertain. Leaseholders and freeholders are in the same position they have been in for many years. There are no quick and easy answers to any of the issues that have slowed up the legislation to date; if there were we would no doubt be a lot further forward.”
Following the biodiversity net gain (“BNG”) requirements of the Environment Act 2021 coming into effect on 12 February 2024 and 2 April 2024 for major and small sites respectively, this note summarises some key points we have seen arise to date.
Please also refer to our previous notes of October 2023 and February 2024 for further detail on these obligations.
How are councils approaching BNG at application stage?
Broadly we have seen councils proactively engage with the BNG requirements but as expected, there are a number of issues arising due to local authority resourcing and the capacity to deal with the more onerous obligations associated with complying with the BNG requirements. Please refer to our note from February 2024 for details of what needs to be submitted at application stage.
We have seen some local authorities take an approach to the application requirements which does not accord with the legislative provisions. For example, we are aware of local authorities requiring the offsite gain units (where applicable) to have already been located and identified at application stage. There is no regulatory requirement for this and from a practical perspective, it is often unlikely that applicants and developers will be able to demonstrate this at application stage, particularly given the number of registered gain sites (see further comments below).
Does the bng regime apply where the council does not expressly impose the relevant condition on the face of the permission?
Yes, the pre-commencement condition requiring a biodiversity gain plan to be submitted is deemed to be imposed regardless as to whether it is included within the decision notice itself. It is important to bear this in mind when reviewing decision notices possibly with the intention of acquiring sites to develop or for investment purposes, as we are aware that some councils have not expressly included the condition even where the permission is subject to the BNG regime.
Are planning applications for alterations to building subject to the bng regime?
Alteration applications are not specifically excluded but some of the exemptions could apply. In particular, the BNG regime does not apply to the works carried out pursuant to a development right. Equally, the de minimis exemption is likely to apply in the context of alterations; in broad terms if the works will impact less than 25sqm of onsite habitat the statutory BNG regime will not apply.
It may therefore become important to consider the extent of the application boundary when applying for planning permission, to ensure this does not include any habitat at the property which is not in reality the subject of the application.
Is the biodiversity register working effectively?
The register itself is publicly available and (at the date of this note) shows 11 registered gain sites. The register of course only shows the sites once they have been registered and where applicable the allocation and as a result, it is not representative of the number of sites which are in the pipeline to come forward. We are aware there are various sites where preparation work is underway for the gain sites to be dedicated but where this has not yet completed. Commercially, this may be because landowners are reluctant to tie up their land for this purpose until buyers for the units have been found.
How is the market for offsite gain units emerging?
Given the number of developments which will not be able to deliver the entire required 10% gain on site, the market for offsite units will continue to grow in importance. The hierarchy of mitigation options means the BNG system is to an extent reliant on offsite units continuing to become available, otherwise the default position will be the purchase of the statutory credits which have been priced to disincentivise this option. This balance between the supply of the gain sites and the demand for the units is still emerging in these initial months since the regime became mandatory. As more applications which are submitted requiring offsite units it will become clear whether demand outgrows supply and at that point, whether the resort to the statutory credits becomes more prevalent than it has been to date.
Can applications to allocate units to a development be made at the same time as the registration of the gain site?
Yes, applications to register an offsite gain area and allocate the associated units can be submitted at the same time. This is achieved via the online registration platform. Operating via this approach would be taken where the dedication and allocation has effectively happened simultaneously, perhaps where a landowner has dedicated land specifically for the purposes of providing the relevant units to offset a particular development.
How long does it take to register a gain site and allocate units to a development?
The Government website currently indicates a 6 week period from receipt of the application to registration (provided the application is successful). The time period for this registration gap should be factored into transactional timetables which may be conditional on successful registration of the gain site.
Will it be less onerous to comply with the bng requirements when trying to develop brownfield land?
The level of difficulty in complying with the BNG obligations will often be dependent on the baseline number of units on the site, as this dictates the target level of the 10% uplift. The rules apply equally to brownfield and greenfield land and regardless of the level of the baseline.
The assumption is that often, brownfield sites will have a lower baseline ecological value than their greenfield counterparts. Whilst in some cases this will be the position, it is not necessarily the case. As a particular example, open mosaic habitats are often found on brownfield land and are classified as a ‘high distinctiveness’ habitat in the statutory metric. An open mosaic habitat is identified by hard surfaces interspersed with vegetated areas; an example would be broken or fragmented paving in which habitats have naturally grown and often developing over a long period of time.
It therefore remains important to do robust initial assessments of the onsite habitat as early as possible and not assume that a brownfield site will have a low ecological baseline value.
Is there an industry standard s106 agreement for the purposes of securing bng?
Each local authority will have its own preferred form of s106 agreement for addressing BNG, similar to any other type of planning obligation. In terms of dedicating land as an offsite BNG area, again this will often depend on the dedicating party and whether a local authority or habitat provider are party to the agreement who may have preferred form documents in place.
In terms of the BNG plan to be submitted to discharge the planning conditions, the government has prepared an example plan which can be used to apply to discharge the pre-commencement condition. It is expected that most local authorities’ preference will be that the BNG plans follow this template.
Please get in touch with our Planning Team for any specific advice or guidance on any individual sites.
Information correct as at September 2024. This note is a summary, please refer to the legislation and guidance for full details.
Chambers High Net Worth Awards 2024: Forsters shortlisted for Residential Property Team of the Year
3 May 2024
News
Forsters have been shortlisted for ‘Residential Property Team of the Year’ at the Chambers High Net Worth Awards 2024.
The awards reflect the team’s achievements over the past 12 months including their outstanding work and excellence in client service. The awards honour law firms across the world and we are delighted to be recognised.
Forsters’ Residential Property team shortlisted in the RESI Awards 2024
11 March 2024
News
Once again our Residential Property team at Forsters has been shortlisted for ‘Legal/Professional Team of the Year’ in the RESI Awards 2024.
The RESI Awards, organised by Property Week, celebrate the fantastic achievements of the residential property sector.
This shortlisting recognises the high-quality work we deliver for our clients. We are delighted to be named amongst other industry leaders.
Our Residential Property team acts for clients on all aspects of their property requirements, supporting clients to navigate the legal practicalities of buying, selling, financing, and managing your asset. We provide a client-focused service, giving technical advice whilst also taking a commercial approach to ensure we achieve our clients objectives.
Paper trials – Conveyancing and the Building Safety Act: Charles Miéville quoted in the Law Society Gazette
23 February 2024
Views
Residential Property Partner, Charles Miéville, has been quoted in the Law Society Gazette in an article on conveyancing and the Building Safety Act.
The article draws on opinions from industry experts and touches on the issues surrounding the Building Safety Act 2022 and the subsequent slowing of leasehold transactions. The article elaborates on recent guidance published to try to provide conveyancers with some clarity.
Charles highlights issues when selling a property and the difficulties of navigating the legislation when dealing with property transactions. He comments: ‘There’s a bit of a learning curve, and some of the legislation hasn’t been tested in the courts.’
As a solution to these issues Charles suggests that there is a ‘need to advise landlord clients where they sit in terms of remediation costs. If one deadline is missed, costs cannot be recouped from the tenant.’
Residential SDLT – I am a private rental tenant, do I have to pay stamp duty land tax?
17 July 2023
News
Most people are aware of the need to pay stamp duty land tax (SDLT) when buying a house for a high enough purchase price.
With its myriad of rules (additional property surcharge, non-resident surcharge, flat rates for companies), SDLT has become increasingly complicated, however one group who rarely have to consider the Byzantine depths of the Finance Act 2003 are private renters. But is this something they should be thinking about?
What is SDLT?
SDLT is a transfer tax on the acquisition of property interests in England and Northern Ireland. Wales and Scotland have similar but slightly different regimes (Land Transfer Tax and Land and Building Transfer Tax respectively). SDLT is due whenever a relevant land interest is transferred, be that by sale or by grant of a lease, and chargeable consideration above the nil rate threshold is paid for this transfer. SDLT is taxed in a progressive banded system, much like income tax, such that the value of the chargeable consideration that falls into each band is taxed at the relevant rate for that band, for example the first £250,000 of a purchase price (assuming neither the additional property surcharge or non-resident surcharge applies) will always be taxed at 0%, regardless of whether the total purchase price is £300,000 or £2 million.
There is no difference for SDLT purposes between a “tenant” and a “leaseholder”. SDLT applies to any freehold or leasehold transfer (it does not apply to licences) subject to certain transactions that are exempt from the tax (primarily for being low in value). SDLT as a tax looks at the substance of a transaction, not the way it is described. One cannot define oneself out of an SDLT charge, for example by labelling a lease as a licence.
Chargeable consideration is the price paid for the transfer. For a purchase this is simply the price you pay. For rent it is the net present value (NPV) of all the rent across the term of the lease. This uses a discount value (3.5%) so future rent is not valued as highly as rent due immediately. For leases longer than five years it is only rent in the first five years that is used for the SDLT calculation, with the highest year’s rent in that five-year period being taken as the rent for every year above five; thus rental increases after the first five years are ignored. As such, the NPV will be less than just simply adding up all the rent over the term of the lease.
Does this apply to private rental tenants?
The short answer is “it can do”. The slightly longer answer is “it’s very unlikely that the average tenant will need to pay SDLT or file an SDLT return”.
For a lease of under seven years an SDLT return only needs to be filed if the chargeable consideration is above the nil rate threshold. This is currently set at £250,000, raised from £125,000 in 2022 by Liz Truss, although due to be cut back to £125,000 in March 2025.
It is highly unlikely that most residential rental leaseholders will be taking leases with a rental NPV above £250,000.
What if I renew my lease?
Some tenants may fear that by renewing their lease several times they may reach a stage where SDLT is due. This will, however, only be the case if the renewals are “linked” for SDLT purposes.
Linking is a grey area for SDLT, primarily designed to stop transactions being split to minimise tax, e.g rather than buying a house for £500,000, you buy the house for £250,000 and the garden for £250,000, and pay no tax as you have two transactions each under the nil rate threshold.
Renewing a lease is not traditional transaction splitting, however if it is done with an option to renew within the lease itself then this will be linked, i.e. if the lease includes a provision allowing the tenant to renew the lease at the end of the current term, and the tenant does so, the renewal will be deemed to be linked.
On the other hand, if, around the time of expiry of the term of the lease, the tenant and landlord agree they both want the tenancy to continue for a further term, with no requirement that both or either must agree to this, (probably with some degree of negotiation over any rental increase), then it is likely that the leases will not be linked.
Even if leases are linked, at the current nil rate threshold, a lease with a rental value of £2,000 a month will need to be renewed for an occupation of 14 years before SDLT is due on the rent. On that basis, even London renters are unlikely to be triggering SDLT obligations.
If a lease is renewed such that it lasts for over seven years, and each renewal is linked, then an SDLT return is likely to be required even if no SDLT is due.
What if I am non-resident?
For SDLT purposes you are generally non-resident at the time of a transaction if you have not spent 183 days in the UK in the 364 days before the transaction.
Unlike the “additional property” 3% surcharge, which only applies to the premium, the 2% non-resident surcharge can apply to rent in some circumstances, namely:
If there is also a premium value worth more than £40,000. This will trigger the non-resident surcharge, making the nil rate threshold for rent a 2% band, such that any level of rent will result in tax
Where the lease is for more than seven years and the annual rent is more than £1,000
If you are UK non-resident, then you may pay SDLT on your rent if you take a lease for seven years or your lease renews to be, in total, over seven years in length (and the renewal(s) are linked as above) or you pay a premium over £40,000 alongside your rent.
What if I am doing something unusual?
The risk of an average private rental tenant having to file an SDLT return or pay SDLT is low. The tax is most likely to be paid by someone doing something unexpected such as:
Paying a very high level of rent – the exact level will depend on the length of the lease but for a one-year lease, rent of over £21,000 a month would be needed to go over the current nil rate threshold
Renting where there was always an agreement that the leases would renew, especially to take the total term to over seven years
Renting from family on a non-arm’s length basis – this would make it more likely that renewal leases are linked (however the most obvious non-arm’s length basis is for under market rent which would mean the nil rate threshold would be less likely to be triggered!)
For the average renter, who has taken a lease from a third party landlord, even London rental rates will not trigger SDLT liabilities for a short term AST (assured shorthold tenancy) unless the lease contains an option to renew and this is triggered several times.
Summary
SDLT can apply to private rental tenancies, but typically only applies where rent values are very high or if something unusual is taking place. For the vast majority of renters, SDLT is not a tax that they will need to consider.
That said, renters should be careful if:
Their lease is granted for a term of seven years or more
Their lease contains an option to renew, and they take up this option (and the renewed lease has a further option to renew, etc.) such that the total length they occupy the property exceeds seven years (in which case an SDLT return will be due in the seventh year although depending on levels of rent there may still be no tax)
Their lease does not contain an option to renew but it was always intended that the lease would last more than seven years (in which case an SDLT return will be due in the seventh year although depending on levels of rent there may still be no tax)
They are non-resident for SDLT purposes and either pay a premium worth £40,000 or occupy for over seven years (with any renewals treated as linked)
Their lease has a very high level of rent
Disclaimer
This note reflects the law as at 11 July 2023. The circumstances of each case vary and this note should not be relied upon in place of specific legal advice.
Avoiding Unwanted Tax Liabilities When Buying a Home in the UK – Xavier Nicholas writes for Abode2
14 April 2023
Views
Alongside identifying quality support on conveyancing, it is essential that international buyers seek legal advice on the tax implications of acquiring a home in the UK.
Unexpected tax liabilities can surprise the unprepared, while well-advised buyers will have the best chance of limiting their exposure.
The main concern will be inheritance tax (IHT). Non-UK domiciled individuals are subject to IHT at a rate of 40% to the extent that the value of their UK estates exceeds the tax-free ‘nil rate band’ allowance (NRB). At a modest £325,000 (or in some cases, £500,000), the limited scope of the NRB can come as a shock to those relocating from (say) the US, where the amount that can pass free of federal estate tax is currently $12.92m.
Owing to significant changes in legislation over recent years, the options for mitigating IHT are limited. Good advice is needed to navigate the rules successfully and ensure that ownership arrangements are tax efficient. Planning might include securing the exemption that applies to transfers on death between spouses and civil partners, using debt to reduce tax exposure, specialist life insurance, and (in some circumstances) co-ownership of a property with children.
In all cases, buyers should take advice before completing a purchase, as some forms of planning may not be effective if put in place later on.
Special attention is needed for those who will continue to be subject to tax in another jurisdiction. Double taxation agreements and cross-border reporting may add to the need for a pre-purchase check-up. For those with a US connection, acquiring a property in the UK makes specialist advice on US-UK estate planning a must-have.
UK tax legislation, with all its complexity and intricacies, has a habit of leading the way in making the case for fact-specific legal counsel. Pre-purchase tax advice should be at the top of the to-do list for those thinking of acquiring a home in the UK.
This article was first published for the Abode2 luxury property publication, which can be accessed here.
For more information on our services for individuals and families relocating to the UK, see here.
Moving to the UK – Everything you need to know
Moving to the UK is an exciting life event whether it be a short-term move for work to explore business prospects or a more permanent relocation with the whole family; the UK offers an eclectic range of options to live, work and learn, from the cityscapes of London to vineyards in the English countryside and historic university towns in-between. Setting up life in a new country can feel daunting too and it can be difficult to know where to start.
Moving to the UK
Wherever you are on your journey to the UK, our Private Wealth team are here to guide you through the process and advise you on how to make your move as seamless as possible.
International Buyers Continue To Seek UK Homes Despite UK Economy Concerns – Charles Miéville writes for Abode2
11 April 2023
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Despite the UK economy and house prices in many sectors currently falling, prime residential property is a sector of the market which continues to flourish as a popular choice for international HNW and UHNW clients looking to relocate or invest.
Whilst these properties have predominantly been in prime Central London, there’s also a keen interest in trophy assets located outside of the capital, although, through a lack of supply, particularly in the countryside, these transactions are undoubtedly fewer in number.
Why is the UK such an attractive place for international buyers?
There are several reasons for this stable trend. One explanation for those moving from overseas is the UK offers an advantageous time zone, being roughly equidistant between North America and Asia.
For all international buyers, English Law is viewed as a safe, stable and secure system under which to buy and own assets, both from a financial and family perspective. The schooling system is also favoured by many international families who then require a bolt-hole in the UK whilst their children are based here.
One huge attraction for US citizens, in particular, is the property tax benefits. State property taxes in the US, particularly in New York and California, are very high. Compare this to the UK, where acquisition taxes are far higher (in the form of stamp duty land tax), but the holding costs are far lower (being limited to council tax and service charge for flats), meaning if US buyers are holding their UK assets for any length of time, it may prove a cheaper alternative to US real estate.
Will the housing market prices dip for high-value houses?
Having spoken to several agents over the last few days, they are still seeing that there is a healthy appetite from individuals in the Middle East, the States and Asia. It is likely that throughout 2023 we will continue to see premium sales continue apace and valuations continue to hold, particularly while stock remains low.
This article was first published for the Abode2 luxury property publication, which can be accessed here.
For more information on our services for individuals and families relocating to the UK, see here.
Moving to the UK – Everything you need to know
Moving to the UK is an exciting life event whether it be a short-term move for work to explore business prospects or a more permanent relocation with the whole family; the UK offers an eclectic range of options to live, work and learn, from the cityscapes of London to vineyards in the English countryside and historic university towns in-between. Setting up life in a new country can feel daunting too and it can be difficult to know where to start.
Moving to the UK
Wherever you are on your journey to the UK, our Private Wealth team are here to guide you through the process and advise you on how to make your move as seamless as possible.
As the largest specialist team dedicated to Residential Property in London, our lawyers can provide an unrivalled level of service to clients. To learn more about our lawyers, and the services they can provide for you, please visit our luxury property hub.
Historic England’s General Counsel, Andrew Wiseman and Commercial Real Estate partner Victoria Towers join host Miri Stickland to unpick what a historic building is and how can they be developed and adapted for future generations, with a particular eye on the challenges around introducing energy efficiency measures into historic buildings.
Having private outdoor space is now seen as a necessity by many more people living in an urban environment, where once it was only within reach of those city dwellers fortunate enough to afford spacious surroundings.
This has resulted in many cases to the much-publicised move to the countryside. It may well mean for many that they are now, for the first time, the custodians of a property of special architectural or historical interest: a listed building.
Owning a listed building is not for the faint hearted, but it can also be a source of much joy and fulfilment. Here are five crucial things to know for those thinking of purchasing, or already owning, a listed building:
1. Special attention needs to be paid when considering any repairs, maintenance or alterations.
It is an offence to extend, demolish or carry out internal or external alterations which would affect the character of the property without Listed Building Consent, whether or not the owner is aware of that being the case. Replacing windows, fitting a new kitchen and even painting the exterior of the property could all require Listed Building Consent.
2. The listing does not just include the building itself.
It includes any item or structure fixed to it and any item or structure within the curtilage, provided the latter has formed part of the land since before July 1948. This might include anything from an outbuilding to a boundary wall, a fountain or, in some cases, statues.
3. Failure to obtain Listed Building Consent has consequences.
If consent has not been correctly obtained for works which require it the person carrying out the works will face a possible maximum penalty of two years’ imprisonment and an unlimited fine.
4. A new owner may inherit works carried out without Listed Building Consent.
It is not uncommon for works to have been carried out by a previous owner which required Listed Building Consent, but for which no Consent was obtained, or that the works were not carried out in strict adherence to the approved plans or the conditions of the Consent.
In these situations, the current owner has not committed an offence by simply owning the property. However, the local planning authority may issue an enforcement notice requiring the building to be restored to its former state or for further works to be undertaken to alleviate the effect of the works carried out without Listed Building Consent. Should the owner of the building fail to comply with the enforcement notice they will then commit an offence, for which the maximum penalty is an unlimited fine that will take into account any financial gain.
5. Seek professional advice.
It is crucial when considering purchasing a listed building, and throughout one’s ownership of it, that professional advice is sought from solicitors, architects, agents, surveyors and builders who specialise in listed buildings to ensure that potentially costly mistakes are avoided and the heritage asset of which you are a custodian can continue to be appreciated in the future.
Victoria Salter-Galbraith is Counsel in our Landed Estates team and has a passion for listed and historic buildings. She has been instructed in relation to Grade I, Grade II* and Grade II listed buildings, some with secret rooms, follies and one with a carving dating from around the time of Christ.
The London Prime Property Market: Helen Marsh features on Bellecapital podcast
17 November 2022
News
Residential Property Partner, Helen Marsh, joined Rudy Vandaele-Kennedy of Bellecapital and Claire Reynolds of Savills to discuss the London Prime Property Market.
Prime London, although not representative of the whole market, is a key segment. UK property market coverage remains negative but how do the recent increases impact different sectors and locations?
Helen, Claire and Rudy address the below discussion points:
Rates/inflation outlook
Prime property prices
The difference between a ‘turn-key’ property and those that require work
The feature explores systemic problems for residential conveyancers stating that the sustained property boom which arose from the SDLT ‘holiday’, for various reasons, has not been a rewarding time.
Robert comments “The general trend of conveyancers requiring every small point to be answered continues with ever more detail being required,” he says. “Sometimes this applies even where the answers are not helpful or even particularly relevant and would have no impact on a buyer’s decision to proceed. Increasingly solicitors are not willing to “take a view” nor to permit their clients to, even if they want to, particularly where there is a mortgage.”
One reason for this, Barham contends, is that “a lot of conveyancing is now done by paralegals with solicitors in a supervisory role. It is more difficult for paralegals to decide what is important and what is not, hence the concentration on small details referred to above which may not be that important either legally or to the client”.
He goes on to comment “Conveyancers have come to recognise that conveyancing is not easy and simply cannot be done at knock-down prices, particularly leasehold property. Therefore, charges have risen over the last few years and are now more realistic”.
This article was first published in the Law Gazette and can be read here in full.
Following the Mini Budget delivered on 23 September 2022, residential Stamp Duty Land Tax rates have changed (again). Unlike Sunak’s “SDLT holiday of 2020-2021”, Kwarteng has confirmed that these cuts are permanent – a relief for the real estate sector at the prospect of no looming SDLT deadlines.
Unless you are a first time buyer, the cuts are far from ground-breaking but are no doubt intended to be the Mini Budget’s mini boost for the residential property market and will be gratefully received by many.
FAQs
Do the changes apply to me?
Yes, if you are:
purchasing property in England or Northern Ireland;
have not yet exchanged contracts; or
have exchanged contracts but have not yet completed your purchase
When are the SDLT changes effective?
Immediately (i.e. from 23 September 2022)
Is there a cut-off date by which I need to exchange/complete?
No, the government has confirmed these cuts are permanent.
How much will I save?
This will depend on your purchase price and the rate of SDLT which applies. For a freehold property on a purchase price of £500,000:
a first time buyer would save £6,250
a UK buyer replacing their main residence would save £2,500
a UK buyer purchasing an additional property would save £2,500
a non-UK resident buyer purchasing their first property worldwide would save £2,500
a non-UK resident buyer purchasing an additional property would save £2,500
What if I have already completed?
Unfortunately the cuts will not apply if you completed on your property purchase on or before 22 September 2022.
For further information on SDLT rates please contact the Residential Property team.
Should I buy a home on my own before we get married? Helen Marsh answers the Financial Times reader’s question
21 September 2022
Views
Residential Property Partner, Helen Marsh, answers a reader’s question in the Financial Times’ article entitled “Should I buy a home on my own before we get married?”
Helen identifies two issues in her response, one relating to tax and the other to joint ownership, and discusses the benefits of entering into a declaration of trust which clarifies respective shares in a property. She also addresses issues around stamp duty and other tax implications if gifted money is shared between a couple in order to purchase a property in which one of the individuals is not a first time buyer.
With rising energy costs and challenging net zero targets, could Stamp Duty Land Tax (SDLT) be a useful tool to help Britain take the next steps towards more energy efficient homes?
We believe that SDLT, as well as Welsh Land Transaction Tax and Scottish Land and Buildings Tax, could be used to assist taxpayers to achieve a greener, more energy efficient future.
Between 2007 and 2012, full relief from SDLT was available on the purchase (for £500,000 or less) of newly constructed properties which met specified standards of energy efficiency, whilst purchasers buying dwellings for more than £500,000 obtained a £15,000 relief from their SDLT liability. To obtain this relief, the seller had to provide a certificate that had been issued by an assessor to demonstrate that the home qualified.
A decade later and SDLT has only increased in complexity and cost, with added surcharges around second home ownership and non-resident purchasers, as well as reliefs targeted at first time buyers and others. Indeed, nowadays the tax on residential properties can be as high as 17%.
Although adding a further relief to an already complicated set of rules may seem counterproductive (especially for busy conveyancers who are not supported by a wealth of tax lawyers), successive governments have been willing to use SDLT to nudge behaviour in certain directions and the changes made have had significant impact on purchasers’ actions. For evidence of this, we only have to cast our minds back a couple of years when SDLT reliefs put in place during the COVID-19 pandemic resulted in an overall increase in transactions, with properties in the price bands that benefitted the most from the increase in the nil rate threshold (such as properties above £500,000) receiving a significant proportion of the upturn. It is not difficult to envisage purchasers turning their focus to a property’s energy efficiency if there is a significant tax saving (for example, on their SDLT bill) to be made.
With ambitious targets for Britain’s reduction in carbon emissions, the Government could look to the reinstatement and beefing up of this “green” SDLT relief. One option would be to tie the level of relief to the Energy Performance Certificate (EPC) ratings which are required to be produced before a property can be marketed for sale, with more energy efficient properties benefitting from a greater relief. Expanding such a relief to all dwellings (not just new builds), would incentivise property owners to invest in improving their property’s energy efficiency; sellers would then be able to market their low carbon properties as more affordable or share in the SDLT savings with the purchaser.
We are not alone in thinking that this could be an effective way forward. The UKGBC made a similar suggestion in their 2021 report with a plan to make the change revenue neutral by also adding SDLT increases to homes with low energy efficiency.
Coupled with other targeted assistance the Government provides for improving energy efficiency, this could be an effective way of encouraging homeowners to take the often-expensive steps to improve the energy efficiency of their homes; surely an appealing prospect on both an environmental and cost of living level?
Disclaimer
This note reflects the law as at 23 August 2022. The circumstances of each case vary and this note should not be relied upon in place of specific legal advice.
The Awards are a staple in the legal calendar, recognising a law firm’s pre-eminence in their field. They reflect achievements including outstanding work on high net worth matters, strategic growth and excellence in client service.
On the win, Head of Residential Property, Lucy Barber, commented: “We are so proud to have won Residential Property Team of the Year. Our aim is always to ensure that our clients receive expert advice, whilst feeling supported and assured that their matters are being dealt with efficiently – the team’s technical expertise and collegiate, friendly culture makes this possible. Congratulations to my wonderful colleagues.”
Over the past 12 months, Forsters’ Residential Property team have achieved a Tier 1 ranking in the Legal 500 UK Guide, Band 1 ranking in the Chambers HNW Guide, listings in the Spear’s Property Advisors Index as Top Flight and Recommended lawyers, ‘Highly Commended’ at the RESI Awards and a win at the Enfranchisement & Right to Manage Awards for ‘Solicitors Firm of the Year’.
The full list of Chambers High Net Worth Award winners can be found here.
For further information on how Forsters can assist you with high net worth residential property matters, please visit our hub or contact a member of the team.
Robert Barham writes for Property Week on ground rents
21 June 2022
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Residential Property Partner, Robert Barham, has authored an article for Property Week on the abolition of new ground rents.
From 30 June 2022, it will no longer be possible for landlords to reserve ground rents in long residential leases.
Robert explains that while the abolition of ground rents should result in higher prices for properties, in reality this will likely not be the case given that the market never priced ground rents in when assessing the value of new-build properties.
However, he does pose the question on what the change will mean for developments where some units are sold with ground rents reserved and others, yet to be sold, will have no ground rents.
The nomination reflects their achievements over the past 12 months from their outstanding work and strategic growth to their excellence in client service, and confirms the team’s position as market-leading advisors.
Forsters’ Residential Property team have enjoyed a successful year, which has included a Tier 1 ranking in the Legal 500 UK Guide, listings in the Spear’s Property Advisors Index as Top Flight and Recommended lawyers, ‘Highly Commended’ at the RESI Awards and a win at the Enfranchisement & Right to Manage Awards for ‘Solicitors Firm of the Year’.
Auctions have seen a surge in popularity over the last few years, with an increasing number of prime properties going under the hammer.
In her article, ‘How to buy property at auction’, Lucy explains what prospective bidders should be aware of, and the all-important due diligence required beforehand…
It is commonly thought that buying a property at an auction is an opportunity to pick up a bargain as there is often less competition than when buying a property on the open market. The lure of a bargain should not mean that any short cuts are taken when carrying out the necessary property due diligence, otherwise it can turn into a very expensive bargain.
When buying a property at an auction, there are several important things to consider which differ from buying on the open market.
“It is quite common at auction to find properties that are being sold by a lender where the borrower has defaulted on their mortgage, so there may be limited information available.”
Before the action, you would be well advised to ensure that a solicitor has reviewed any legal pack that is available for the property. In addition, they should carry out any additional searches or investigations that may be appropriate. It is quite common at auction to find properties that are being sold by a lender where the borrower has defaulted on their mortgage, so there may be limited information available. It may also mean that the owner had not been able to maintain the property, so renovations may be required. This is why seeking advice from solicitors and surveyors is very important. If works are required to be carried out, or you just wish to refurbish the property, you should ensure that there are no restrictions preventing you from doing so.
For example, a leasehold property may have restrictions in the lease which prevent you from doing the alterations you want. There can also be restrictive covenants which apply to a freehold property, which could prevent you from using the property in a manner in which you require. Therefore, it is important to get the title checked by a legal advisor.
Where there is not an opportunity to inspect the inside of the property before purchasing, you should inspect the outside of the property as that can be a good quality indication of the inside. For example, if its dilapidated and uncared for on the outside, the same should be assumed for the inside.
If you are looking to buy a block of residential flats as a ground rent investment, you should check whether or notthe provisions of the Landlord and Tenant Act 1987 (“the Act”) apply and that it has been complied with. If the landlord of a residential building (or some mixed use buildings as well) wishes to sell their building and the building is one which meets all the criteria under the Act, the landlord has to serve statutory notices to the residential tenants offering them the opportunity to buy the property at the price obtained at the auction. The notices have to be served at a specific time period before the auction. You should obtain legal advice to ensure that the statutory provisions have been followed correctly and ascertain whether the tenants have elected to take up the opportunity to purchase the property themselves. If this is the case, they are entitled to purchase the property at the price agreed at the auction. In the event the provisions of the Act are not followed, the tenants may have the right to later buy the property at the price obtained at the auction; therefore you may find yourself successfully bidding for the property, but not actually being able to complete your purchase or having to sell it to the tenants at the price you bought it for.
“The reserve price is not usually disclosed, therefore there is no guarantee that the seller will sell the property if the reserve price is not met.”
You should also be aware of the meaning of reserve price. The reserve price will be the value below which the seller has indicated they would not be willing to sell the property. The reserve price is not usually disclosed, therefore there is no guarantee that the seller will sell the property if the reserve price is not met.
If you are successful in bidding for a property at an auction, you will be asked to sign the contract immediately and the completion date will be fixed. The completion timetable after exchange can vary, but it is usually a few weeks after the exchange. If you are relying on mortgage finance, you need to ensure that you have it readily available. Mortgage offers can take several weeks to come through and may not come through in time for completion. There are specialist auction finance companies which can also assist with providing quick finance but it means you won’t have available to you the wide ranging offers on the wider mortgage market.
It is therefore important to seek advice from experts if you are considering buying a property at an auction. It is paramount to do this in good time as you may struggle to find a legal advisor or surveyor if you leave it to the day before the auction. It is crucial that you seek advice to ensure your title to the property is marketable and permits you to do what you wish.
The article was first published in Prime Resi on 5 May 2022.
Helen Marsh quoted in The Telegraph on the cooling of the property market outside the commuter belt
29 April 2022
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Residential Property Partner, Helen Marsh, has been quoted in The Telegraph article, ‘How a property seller overpaid in the pandemic frenzy – then made a £300,000 loss.’
As the post-lockdown rush to leave the capital reverses and buyers look to return to London or more traditional commuter locations, some property owners that are looking to sell their pandemic purchases are finding their rural homes are worth less than they paid for them.
The fall in demand has resulted in the cooling of the property market in more rural locations, further fuelled by rising interest rates and the increased cost of living.
Helen Marsh comments “I’ve definitely seen people who rushed to move out of London and then realised they don’t like it, or that they have to do the commute to the office that they never thought they would need to do.”
The full article can be read here, behind the paywall.
