BBC2 Newsnight devoted an entire programme last night to the building safety crisis – and how England’s leasehold tenure has made it worse – without a single appearance from a government minister or spokesman.
Conservative MP, Father of the House – and patron of LKP – Sir Peter Bottomley was interviewed on the programme, but he was critical of the four-year unfolding shambles that has blighted the lives of hundreds of thousands of flat owners.
The programme highlighted the personal miseries of the leaseholders caught up in the debacle, but linked it, too, to the wider issue of exploitative leasehold tenure and the uniquely disempowered status of leaseholders – long tenants – in England.
Regulatory failures and the chase to the bottom culture of house builders and their suppliers were also covered, to explain why the UK has ended up with such badly built blocks of flats.
(In truth, these have been built elsewhere, such as in Australia, where former premier of Victoria Ted Baillieu who headed the task force to resolve the crisis pithily told the leasehold APPG in July that “we have been building crap”.)
Perhaps the weakest section concerned the impact of the building safety issue on the wider property market and exposure of mortgage lenders.
LKP trustee, and former Bank of England economist, Dean Buckner has issued repeated warnings that the building safety debacle has the potential to develop into a serious banking crisis.
The residential property market has largely ignored the faltering performance of flat re-sales, as Covid savings, low interest rates and the stamp duty holiday created a surge in price inflation for houses. Newsnight did point out that flat sales on the other hand were markedly down.
LKP suggested that Newsnight interview Rob Perrins, the CEO of the Berkeley Group, or David Thomas, CEO of Barratt, to discuss the current market in new flats in the UK – their abysmal reputation – for safety, for unexpected build safety bills – is now widely known in the investor markets of the Far and Middle East.
The programme interviewed LKP trustee Liam Spender, a City solicitor, who quoted Robert Jenrick’s words that the building safety crisis was overdone and that many, especially low rise, blocks should not have been dragged into it.
He also deprecated – as have many on social media – the complete absence of a government spokesman.
“If the government is so confident of its case, then why isn’t it here to defend it?” he asked.
Martin Boyd, LKP chair, discussed the issue of leasehold tenure with Mick Platt, the managing director of ground rent investor Wallace Estates.
Mr Platt suggested that commonhold was OK for blocks of five flats, perhaps unaware that Mr Boyd is also chair of Charter Quay in Kingston, Surrey, a fully enfranchised 240-flat, Thames riverside site with complex commercial below including a theatre.
It ejected its freeholder management, retrieved £400,000 in excessive service charges and purchased the site’s freehold off proprietor Vincent Tchenguiz: so it is as close to commonhold as leasehold laws allow.
It was a shame to hear from Mr Platt, rather than from his boss hedge-funder Italian Count Luca Rinaldo Contardo Padulli – apparently based in Suffolk – who put together Wallace Estates ensuring that anonymous investors hitch a ride on the income streams from ordinary families’ homes.
Newsnight viewers were informed that leasehold is the peculiarity of England and Wales, whereas versions of commonhold are the norm in the rest of the world.
Among other participants was Lucy Powell MP, Labour’s shadow communities secretary.
She is the only senior politician to have held a forum of leaseholders, freeholders, developers, lenders, insurers, build safety experts and lawyers to discuss how the building safety disaster should be resolved.
It is a matter of urgency that government adopts a similar approach, rather than officials – eager to cover up past regulatory failings – guess at possible solutions which subsequently backfire (eg the much stalled forced loan scheme).
While Australia has largely sorted its cladding / building safety crisis, the UK has still not thought through what it should do – more than four years after Grenfell.
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‘Worst building safety scandal in modern history’
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Richard Davidoff, of ABC Estates, ‘breached his fiduciary duties’ after disastrous performance as a court-appointed manager, rules property tribunal
It’s a pity there are so many uninterested leaseholders out there…Not one bloody comment., That folks is a large part of the problem.
I agree with you to an extent Kim, many Leaseholders are far too Apathetic.
However there is many leaseholders who are not. Hope you will be attending the Leaseholders Together Rally in Parliament Square on the 16th September.
Grenfell caused a knee-jerk reaction to the whole issue of cladding. The impression you might have formed initially was that cladding was rather like having petrol tanks strapped to the side of the building.
With the outbreak of some more measured debate there is a growing realization that some initial risk assessment made about cladding after Grenfell were made without proper foundations plunging hundreds of thousands of lessees into un mortgageable homes and worry about remedial costs. Those who made those initial recommendations will be embarrassed about the decisions they have made and to try and save face will continue to hold on to those views notwithstanding the carnage they have created
About 1800 people a year are killed on the roads, and this could be lowered to probably nil if we re-introduced a person with a red flag walking in front. But of course, we cannot, as there be no economy left to fund our aspirations and lifestyle. It’s brutal that we do have to consider costs when evaluating savings in lives.
We see the same knee-jerk reaction to the issue of 10 year doubling ground rents where a knee-jerk reaction from mortgage underwriters refusing to lend where the ground rent is linked every 5 years to the RPI or is above 0.1% of the value of the flat – again measured debate would show how this could be addressed.
Kim….
I am sure a lot of leaseholders would want to comment on the ‘leasehold disease’ as Liam Spender put it.
However I think the problem with commenting is the same reason that people took out a leasehold tenure in the first place, the fact is that leasehold regulations and rulings seem to have been made to make the subject as difficult as possible for those with limited legal knowledge, consequently people who would normally comment but who have found the whole situation an inhuman, soul destroying system causing mental anguish have decided not to say anything rather than provoking borderline decency which no doubt some who view these comments are ready to pounce on at any hint of defamation or discrepancy.
I see Stephen is giving the impression that doubling ground rents are perfectly ok and one wonders where the interests of this person lies, the fact is that leasehold tenure has been the stalking ground for the unscrupulous for many years, the whole scheme being set up in order that 3rd parties, who have no interest in affordable housing other than using the leasehold system for monetary gain with no responsibility or little service have managed over the years to make house purchase one of the most costly and difficult that anyone will encounter, and as seen by the example of the cladding scandal will bring many people to financial if not mental ruin whilst those who offer these tenures have nothing to fear, and can have a good nights sleep knowing that the next day will be full of opportunities for making more money from someone elses empty home.
I wish I could express myself in expletives for these scoundrels but perhaps the comment box does not run to that many pages.
George.
George
You have misread my post – 10 year doublers are a problem, but the manner in which the mortgage industry has responded has blighted sale prospects of those whose ground rent is over 0.1% or linked to the RPI more regularly than every 21 years, it would seem.
Mortgage lenders took action. It is the inaction of the government (as always) in a timely manner to sort any of these MANY issues out.
Not one piece of legislation has been passed to protect leaseholders, not one.
Is there no-one in the Tory Party, or any official way to ask “who will explain why there was no representative from the MHLG at the Newsnight tv program” .. or as to why there was no comment from MHLG? .. or is it a case of what seems to be the normal ‘no response whatsoever’ when MHLG are asked something?
It is an absolute disgrace, democracy has broken down in this country.
George.
I am always thinking these sort of problems do not happen in my country, people do have a voice but with empty non meaningful answers etc..nothing gets corrected and people are suffering because of government leaders and their lobbyists followers. Why has Common-hold not been ignited after the Law Commission Report was produced, yes I can understand why people Leaseholders are not commenting.
Thank you Hubert,
I don’t know the country you are from but you are very lucky not to be a victim of Britains leasehold rules and laws, however as I understand it, the European court of Human Rights (ECHR), has a difficulty in seeing that the legal owner of a property who may have obtained the freehold rights, and could in fact be an investment company has rights over and above those of someone who, as a single entity, has purchased or is paying for his home to be lived in by him/herself, and consequently ECHR are aiding an unjust system.
To be clear, if a Freeholding company legaly owns a property which an ordinary working person is paying for with a leasehold tenure, then ECHR rules that the ‘legal owner’ of the property has ‘Human rights’ which empower the Freeholding company as if it were a single ‘Human’…! this is obviously not the case and in my opinion the ECHR legislation is wrong and going against the human rights of an individual.
I read in a recent article that some city in the Netherlands is trying to ban investment companies from buying up properties wholesale, no doubt they are seeing the problems that face many in the uk but unlike the uk are actualy doing something for their citizens en mass, unlike Britain where it is ‘Rule by the few for the few’. I can assure you it won’t happen in Britain, those that rule have their snouts firmly stuck in the trough, and I read recently that the Banks in uk are purchasing residential properties, what will happen when they are the landlords God help us.
Some months ago there was a little video clip of one lady MP who dared to suggest in Parliament that the Tory party donations were influencing policy decisions, this MP was derided and given a good verbal thrashing by a Tory party official who as I remember presided over donation accounts. That was some months ago, and if there is anyone who does not believe the lady MP’s opinion was correct then they have not been paying attention.
It seems quite extraordinary that Hubert, obviously an educated gentleman from another country, should also have the opinion that ‘nothing gets corrected and people are suffering because of government leaders and their lobbyist followers’ . Ah well, at least in Britain it is something we have come to expect so no surprises there.
Over the past 30 years I have been waiting for some sort of real leasehold reform, I have seen the scandal of the Governments lease advice service where Freeholding management companies infiltrated it and had made it a forum of how to extract even more money out the leaseholders, I have seen the introduction of commonhold only to be discarded by the people who would miss out on the leasehold scam.
There have been innumerable instances of how the leasehold system has made people lives a misery, and how the legal profession has favoured freeholding managing companies, developers, building companies in order that they shoulder no responsibilty, and some years ago at least one Conservative MP, Sir Peter Bottomley said what he thought of the whole rotten system, in contradiction to one Minister who a couple of years earlier had said that there was no problem with leasehold and that the sector itself could sort out any problems! she consequently changed her mind some months later.
Good for him, at least one honourable man in Parliament, however there has been delay after delay with leasehold reform, this wasn’t the case with the new rules for developers to put extra stories on top of their buildings, that went straight through ..no problems.
The delay to leasehold reform as I see it is that apart from those who are lobbying MP’s so as not to take away their un-earned income stream, I should think a good deal of tax will dissapear from the governments income, so the longer the delay the better for them, and now that there are moves afoot to remove some onerous parts of the leasehold system..lo and behold! another snake raises its head…’Shared ownership’ …. don’t make me laugh!
Well thank you Hubert for your post, I could mention many other disgracefull facets of the British leasehold system but as an elderly person I might not see the end of it in my lifetime and in fact I have said my peice and will not be putting any more comments forward on this forum.
I just hope that the upcoming Leaseholder Rally in Parliament Square will show just how much ordinary people are opposed to this ridiculous state of affairs with leasehold.
George.
Perhaps Newsnight or someone @ the BBC I would like to ask Barratts CEO David Thomas of his blatant unfair and unjustified treatment of the residents in the Ridgeway Way Views Development in Mill Hill NW7 despite him saying on record that Barratt will be standardising it’s lease terms across all it’s developments to ensure there are no Ground Rent paying leaseholders living next to their neigbours who are not paying Ground Rent and all having the same lease terms.