Ending leasehold’s ‘industrial-scale racket’

Originally posted on July 12 on my blog for Inside Housing.

As far back as I can remember, every government has promised to tackle abuses of our outdated system of leasehold.

Between 1979 and 1997, the Conservative governments of Margaret Thatcher and John Major legislated four times on leasehold reform.

The Labour government of Tony Blair promised ‘a comprehensive package of leasehold reforms’ in 2000 and introduced the alternative system of commonhold in 2002.

Piecemeal reforms improved things a bit for leaseholders but commonhold has still only been used on 50 developments at an optimistic estimate – in contrast to the expansion of similar tenures like strata title and condominiums across the rest of the world.

Little wonder when leasehold offers so many advantages to be profitably exploited by landowners, housebuilders and freeholders.

Now, in the wake of the twin scandals of cladding and leasehold, all that could – finally – be about to change.

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Sidelining of tenants is part of a wider pattern

Whether you put it down to carelessness or couldn’t care less-ness, the inaction inside government inaction that has sparked open letter from A Voice for Tenants (AV4T) is symptomatic of a wider political paralysis.

As the group themselves point out, they are not representative of the eight million people living in social housing in England but they are the best we have until the government keeps the prime minister’s promise to bring tenants into the political process.

The letter is all the more effective for the contrast between its moderate language and its stark message that working behind the scenes has not produced results.

The only option left seems to be to embarrass the politicians into living up to what they have said over the last two years – accepting Inside Housing’s open invitation to a meeting seems the bare minimum they should do.

And there is a strikingly similar message in the Times this morning from Grenfell United, as it attacks ‘indifferent and incompetent’ ministers who took their ‘kindness as weakness’.

Two years of meetings have produced too little action, they say, with no progress on their call for a new model of housing regulator and thousands of people still living in ‘death traps’ with combustible cladding.

Grenfell and tenants were top of the agenda for the ministers in post at the time of the fire – the work of Alok Sharma and his civil servants is praised in the AVT letter – but have slipped down it as the months and now years have passed.

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The implications of the leasehold scandal

Originally published on March 19 as a blog for Inside Housing.

The leasehold scandal will have far-reaching implications for housing that will be felt well beyond the major housebuilders with whom it began.

A report published by the all-party Housing, Communities and Local Government Committee on Tuesday takes as its starting point the doubling ground rents and onerous contract terms faced by buyers of new homes who it says were treated ‘not as homeowners or customers but as a source of steady profit’.

And it also highlights the issue of leaseholders facing huge bills to remove and replace combustible cladding raised in its work on fire safety.

But this report goes well beyond those recent high-profile problems with leasehold and poses some fundamental questions about a tenure that only exists in England and Wales – and they are ones that will require answers by social landlords as well as private sector housebuilders and freeholders.

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More housing questions than answers

Originally posted on my blog for Inside Housing on December 11. 

As Westminster grinds to a halt over Brexit at least some progress is still being made on housing – or is it?

In the year of the social housing green paper and the end of the borrowing cap, some things have undoubtedly moved but the signs at Housing Communities and Local Government questions on Monday were that others are grinding to a halt.

First up was the land question and specifically the way that MHCLG dashed hopes of radical reform of land value capture in its response to a Housing Communities and Local Government Committee report recommending big changes to a system that sees planning permission for housing increase the value of agricultural land by 100 times.

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To ballot or not to ballot

Originally posted at Inside Housing on February 7.

Tenants get a vote if their landlord wants to transfer the ownership of their homes, so why not when their homes are going to be knocked down around them?

I’ve long believed that tenant ballots should be compulsory under major regeneration proposals even though the idea is not as simple as some people make out and is not going to fix current problems on its own.

Why? London mayor Sadiq Khan says he will require ballots on proposals where demolition is involved and which have Greater London Authority funding.

He has changed his mind since draft guidance last year argued that surveys and meetings should be held as proposals evolve ‘so that a “real time” assessment of the acceptability of what is being proposed is enabled’.

The draft said ballots and votes ‘can risk turning a complex set of issues that affects different people at different ways over many years into a simple “yes/no” decision at a single point in time’.

After a unanimous vote in favour of ballots by the London Assembly, the final version says that: ‘I want the good practice and principles in this guide to be applied on all estate regeneration schemes across London. Where demolition is involved, I intend to use my planning powers, and a new requirement for resident ballots where my funding is involved, to help ensure this is the case.’

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The problem(s) with leasehold

Originally published on April 13 on  my blog for Inside Housing.

Question: When is a home owner not really a home owner? Answer: When they are a leaseholder.

Leaseholders have the responsibilities of being an owner without having all of the rights. They own the bricks and mortar* of the homes they are living in – but only for the length of their lease – and they do not own the land it is built on.

They pay a mortgage but they also pay ground rent to the freeholder and a service charge for maintenance carried out by companies over whom they may have no control. They may see themselves as owners but in the eyes of the law they are tenants.

The issue has come to a head recently with the scandal of developers selling leasehold new houses and then selling on the freehold for a profit. Unwitting buyers have found themselves facing bills for ground rent that double every 10 years and an escalating bill for buying the freehold.

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