An unusual story of hard-to-sell homes has emerged from Northumberland where a kind of new town, established in the 1960s, is causing headaches for estate agents.
The Daily Mail reports that Cramlington as it currently exists was developed in the 1960s, 1970s and 1980s as an overspill town for Newcastle, nine miles away. After some of its most recent housing estates were completed in the 1980s, its population reached about 30,000.
Mail contributor Ruth Lythe says that because it did not qualify for formal new town status it both missed out on public funding and also any requirement to include social housing; instead some of the housing estate builders - including local firms now owned by Bellway Homes and Persimmon - continue to serve as landlords for many of the town’s residents.
The Mail says some 75 per cent of homes were sold leasehold, with residents paying annual ground rent to their landlords.
However, many of the original 99 year leases are now down to between 70 and 80 years and proving worrying to individual buyers and some mortgage lenders unfamiliar with the principle of leasehold houses in that part of the country.
The newspaper claims that some of the existing owners, wishing to sell or remortgage, are finding it surprisingly hard to progress their transactions.
It quotes Paul Reynolds, who owns Cramlington estate agency Renown, as saying: “It’s a ticking timebomb. Many people are oblivious to the fact that their homes are leasehold — but the landlords and management companies aren’t. And those landlords who demand high prices won’t negotiate.”
The landlords are reported to be asking for up to £13,500 for a lease extension - small change by the standards of lease extension costs on some central London estates, but more than many of Cramlington’s current owners expected.
The problems were presumably highlighted by the current residents’ legal advisers when they purchased, but it’s an interesting story - you can see it in full here.