Duke Westminster, one of the richest men in the UK, may see a plunge in the value of his property this week if the success of a landmark legal challenge. Two million families in England and Wales can also benefit.
If the ruling benefits Mundy, it will send a shock wave through the real estate industry to cut the cost of deferring leases or buying freehold property by as much as half.
England and Wales have an estimated 2.1 million residential units with less than 80 years of lease time, and 490,000 units in London alone. If the legal challenge is successful, the cost of deferring the lease to 99 or 125 years may be reduced by an average of 31%.
The case involved a small unit in Chelsea, the lease had dropped below 23 years, and the free guarantor sought 420,000 pounds agreed to the extension.
Behind the case is the surveyor James Wyatt, who is challenging a rental valuation system commissioned by Duke Westminster more than 20 years ago.
The Duke of Grosvenor in central London has the permanent title to the world’s most expensive property, making Hugh Grosvenor, 26, one of the richest men in the UK, wealth Estimated to reach 9.5 billion pounds.
The problem is the so-called “relativity graph”, which is used by property experts to determine the value of short-term rent compared to permanent property. Wyatt said: “In 1996, Gerald Yves and John D. Wood, commissioned by Grosvenor Estate (a survey company), plotted relative prices to set the lease deferral and purchase of freehold. From then on, there was no People have the time, energy, or money to challenge them. It’s a bigger scandal than the rent issue and the real battle between David and Goliath. ”
Wyatt used to be the head of valuation at John D Wood, but he also set up his own consulting firm, Parthenia Valuation. In his view, the mathematical models currently in use incorrectly gave too many rewards for free holders.
“London’s big real estate will be particularly hard hit, but it’s not just the London market, I hear a lot of people, many of whom are pensioners, stuck in declining leases and unable to afford them, for example, I The extension of a lease should be 30,000, but a free insurance company needs 50,000, and the pensioner can not afford it. ”
Wyatt estimates that charterers currently earn up to 480 million pounds a year, but the “gravy train,” which claims investigators and lawyers, is charging huge sums to keep existing systems.
Wyatt’s legal challenge to the strongest property interests in the UK. Wealthier shareholders may be affected by changes in the value of their property, often derived from aristocratic land titles, including Cardorgan (near Slovenia Square), Ilchester (Holland Park), Howard de Walden (Marylebone 92 acres) St John’s Wood and Maida Vale, and Sloane Stanley Estate named after the court case, which owns the land near King’s Road Chelsea and Fulham Road.
Some of the largest freelancers are also major charities, such as the Wellcome Trust, a large landowner around South Kensington and the use of surpluses to invest in cancer research.
Joe Dabie, a nationwide leasing campaigner, said: “The Mondi case is a milestone in the leasing reform and if the appeal is successful, all lessees will be able to pay lesser lease extensions and permanent retention of purchase rights.
“In the past 12 months, the national leasing movement has been pushing leasing law reforms and ending the lease scandal. Now is the time to see if the business is prepared to listen to sound, balanced arguments and provide competition for leaseholders surroundings.”
If the Mundy case favors the lessee, it is expected to appeal in the Supreme Court.
However, even if the case was unsuccessful, the valuation of the lease is expected to decline as the government censors the industry.
Last December, community and local government agencies said they would “work with the Law Commission to make it easier, faster and cheaper to buy permanent property or extend leases.”