Lionel Levine

“I am a Chartered Surveyor and led a wide-ranging practice based in Leeds. We did a fair amount of management, mainly of commercial properties. About 15 years ago a couple of opportunities came up for purchase of small portfolios of residential blocks, flats, primarily in the north, which I thought would be a useful addition to our management portfolio and, moreover, would give me a reasonably attractive yield for my pension fund of absolutely secure income.

Those purchases worked out well and I bought more. Some of the portfolio was/is fixed rents of up to 999 years, some fixed rents, and some with either fixed or RPI based review patterns. Some are short, with under 80 years remaining, where leaseholders are interested in extending. I have sold some of these blocks over the years, to investors with various views as to their investment criteria.

My criteria was simple - fixed or possibly increasing income, some potential capital returns from extensions, and clarity of contracts with leaseholders - they all know when they buy their flat exactly (give or take a view on inflation) what their situation is going to be going forwards. Leaseholders know, their solicitors know, that they would have ongoing liability for rent and outgoings from the very nature of their title.

A flat with a £100 ground rent subject to 10-year RPI review is an easily identifiable commodity with a range of ground rents going forwards within reasonable ranges. 

Over the years I gradually reduced my management income and now rely principally on ground rents and other property holdings.  The problem is that value of ground rents are impossible to calculate and the very rental base is under threat. My retirement strategy is severely threatened.”