Newspaper article The Journal (Newcastle, England)

Houseowners Trapped in 'Unsellable' Homes Due to Row with Charity

Newspaper article The Journal (Newcastle, England)

Houseowners Trapped in 'Unsellable' Homes Due to Row with Charity

Article excerpt

Byline: Jonathan Walker Political Editor

HOUSEHOLDERS facing a nightmare battle with a Newcastle charity over the future of their homes have been thrown a lifeline by the Government.

The time remaining on the leaseholds for the properties has dropped below the 70 to 80 year limit at which a bank will grant a mortgage.

The freehold, and power to extend leaseholds, lies with the St Mary Magdalene and Holy Jesus Trust which owns the land in Newcastle city centre.

And the homes are unsellable due to a legal complication that prevents residents from extending the leaseholds on their properties or buying the freeholds.

Homeowners in a number of houses in the St Thomas' area and elsewhere in Newcastle cannot sell their properties, because the charity owns the freehold and is refusing to extend it.

Now, the Department for Communities and Local Government is to intervene in the dispute between the Mary Magdalene and Holy Jesus Trust and residents, after their case was raised by city MP Chi Onwurah.

Many homeowners have paid off an expensive mortgage, or are still making payments for a property which is effectively valueless.

Residents had claimed that they were effectively prisoners in their own homes as the freehold situation had made their properties virtually unsellable.

Howard Philips, one of the residents affected, said: "We bought this house as a family home but our children have moved on, me and my wife are in our 70s and we would like to move into a smaller house with fewer stairs.

"This whole affair has devastated us, we really don't know what to do next."

Phyll Buchanan, 60, is in the same situation.

She said: "We had an offer put in on the house in 2014 but as soon as the leasehold situation came to light it was over.

"Buying this house was meant to provide security for our daughters but now it's just a wasted asset and, rather than leaving them something, we'll be burdening them with a house they must maintain but can't sell."

Ms Onwurah has taken up their case and, leading a House of Commons debate on the matter, she said: "My constituents, who have worked their whole lives and invested in property, as they have been encouraged to do, are now facing their greatest asset becoming their greatest liability."

A property with less than 80 years on its lease steadily loses value, and lenders will generally refuse to provide a mortgage until the lease is renewed.

This is not a problem for most leaseholders because they have a legal right to renew the lease, typically adding an extra 90 years to it, although this can cost thousands of pounds. However, the 1985 Housing Act states that there is an exception for charities which own freeholds, which are not obliged to extend a lease or sell the freehold for houses on their land. …

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