LKP’s patron MPs Jim Fitzpatrick and Sir Peter Bottomley have secured a three-hour Commons debate next Tuesday (December 20) to discuss reforming leasehold tenure.
It is the first full-on debate over leasehold issues since the debates that led to the 2002 Commonhold and Leasehold Reform Act.
The MPs made the announcement to the All Party Parliamentary Group on leasehold and commonhold reform last night, which was attended by 70 stakeholders in the sector, as well as by MPs of all political parties and members of the House of Lords.
Sir Peter Bottomley bluntly told the APPG:
“I plan on Tuesday if I am called speak the name some names. I don’t mean to go about smearing people.
“There are some issues that potentially give rise to defamation.
“Defamation actions actually have to be damaging, untrue and not privileged; I want to say things which are true; are privileged; and which might, having been brought out into the open, prevent people doing things that are wrong.”
“There are one or two other people who are well known in the freehold game who should have some of their behaviour exposed to public scrutiny.
“I don’t want to knock developers because we depend on them but a number of developers should be spending time between now and Tuesday – and afterwards – asking whether they have done things that they now regret and what they propose to do to make them right.”
Sir Peter referenced the Peverel / Cirrus price fixing scandal, where the Office of Fair Trading found that Peverel’s subsidiary Cirrus had been fixing bids in a collusive tendering scam to cheat pensioners in retirement housing.
“This did not actually meet with effective action by the economic regulators, or the criminal authorities even though people were being ripped off left, right and centre.”
Sir Peter also referenced Danny Truell, the former Goldman Sachs banker who heads the Wellcome Trust and is paid £3 million a year.
The Wellcome Trust is the world’s second largest donating charity after the Bill and Melinda Gates foundation and it gave a record £1 billion last year.
As well as taking punt on sterling over the Brexit referendum, the Trust’s revenues come from a handsome freehold portfolio in central London.
With the aristocratic Sloane Stanley estate, the Wellcome Trust fought the Mundy case where the methodology for valuing residential leases under 80 years was found to be flawed.
But the hedonic regression mathematical model proposed by James Wyatt, a chartered surveyor of Parthenia valuations, was thrown out.
“This means that the cost of extending leases has increased significantly.
“There was no Act of Parliament and no consideration by the Supreme Court. But this ruling will potentially affect 5 million households.
“It should not just rely on two people sitting in the upper tribunal [of the property chamber] deciding the matter with most of the public interest being ignored.”
Now that deserves a WOW! award!
None of this could have happened without the fantastic work carried out by Campaign against retirement leasehold exploitation/ LKP..
The tide is turning. I look forward to hearing the debate, which doubtless will be better received by UK leaseholders than freeholders domiciled in an off- shore tax haven!
I think the big Developers already know what they need to do to put things right.
So I would encourage Taylor Wimpey to make an announcement of some generous proposals this week before the big debate. That way it will not look so bad.
if Taylor Wimpey refuse to believe these houses with doubling ground rents are unsellable – speak to me or the people that have withdrawn their offers on my property when I explained the ground rent to them !!! Taylor Wimpey may be you can buy my house back
Well done Sir Peter and the APPG. Keep up the good work. May I encourage the APPG to take a look at the existence of the so-called ‘marriage value’ and ask the question: why has this been written into law? And is it just? Why for instance should a freeholder be entitled to a 50% share of profits of a hypothetical sale (once the unexpired term of a lease falls below 80 years) when they have contributed absolutely nothing towards the upkeep and maintenance of the property via the service charge. It truly is an unjust piece of legislation and needs to be reviewed asap.
If the marriage value was removed from the statute book or reduced to zero percent at the next budget then the costs of extending leases would be cut in half for many short-to-medium term leaseholders overnight. I have just finished reviewing a sample of Tribunal cases for flats and maisonettes with unexpired lease terms of less than 60 years and the ‘marriage value’ part accounts for nearly 57% of the lease extension premium!
I have taken the time to read the Sloane Stanley Estate v Mundy case and I must say that the problem of deciding which relativity graph to use to value an existing lease would simply not exist if Parliament woke-up and removed this unjust piece of legislation from the statute book and put a mechanism in place to compensate all those leaseholders who have overpaid for the price of a lease extension.
“I have taken the time to read the Sloane Stanley Estate v Mundy case and I must say that the problem of deciding which relativity graph to use to value an existing lease would simply not exist if Parliament woke-up and removed this unjust piece of legislation from the statute book and put a mechanism in place to compensate all those leaseholders who have overpaid for the price of a lease extension.”
Though I doubt any sort of restrospective compensation is possible, the Parliament does need to wake up and address meaningful, ( if not sweeping) reform. The amount of time they spend discussing fox hunting and issues affecting a relatively small number of people, while the whole country has a housing crisis. Of course ultimately is down to who the Parliament really represents.
The legislation is extremely just – for a tory policy it is the single most socialist and radical piece of legislation on the books. The Duke of Westminster resigned from the Conservative party because of it. The lack of equity comes from the fact that it has been implemented by vested interests in the form of the Upper Tribunal and Supreme Court. It shouldn’t be scrapped it should be cherished and further reformed.
But it is also an appalling law: giving private citizens the right compulsorily to purchase the property of someone else.
How can that happen?
Only given the ludicrous, unfair, and moribund, English leasehold law is such a thing conceivable.
These legal somersaults are introduced to make leasehold fair … and it still does not work.
The answer? Stop making more of it! And get in line with the rest of the world with ownership of flats.
I extended the lease on my flat through the formal route in order to protect its value and at an extremely high price, as the lease had fallen to below 80 years. My neighbours who are oblivious to what implications having a short lease makes have ignored the problem, or simply can’t afford to extend. Am I to be disadvantaged financially if there is reform because I did what I was advised to do in order to protect my asset. Surely this can’t be fair. Is ignorance the best policy? looks like it might be. I would certainly want some form of compensation.
I am in a similar situation with my property – My house (not flat) is unsaleable as the ground rent doubles every 10 years , people have withdrawn their offers when I truthfully explained the ground rent to them. My only option is to buy the lease on my house as soon as possible , before the ground rent doubles in 2018- I was advised the figure would be circa 35k before the doubling occurs, this figure would increase significantly once the ground rent doubles in 2018. Not much on an option !!. I think my neighbors are oblivious and the ones that do know , brought to their attention only when the sale of their property falls through. . We are stuck in these properties
How long before spiv freeholder’s deploy the argument that “Any change to lease extension legislation would have a negative financial impact on those who had already extended their lease?”
I Liddle, you make a very valid point(even if it is utterly selfish)
It will be years before we see any reform, this debate is virtually the last debate of the year , most MP’s will be at home with a cuppa in their constituencies.
I can’t get excited as there are APPG’s for Jazz appreciation, and Squash & Racket Ball, we are merely another little debate to the government.
Brexit, Trump, Terrorsism, housing crisis …..they have bigger fish to fry.
I fear that I agree with you. It will be years before we see any meaningful reform – all the more reason though to up our efforts and and write to our MPs who are no doubt enjoying Christmas in their FREEHOLD abodes…????
Don’t despair!! Martins positive attitude is the correct one. Stand united and the spivs will fall like dominoes. Let us keep pushing at the door. Never give up. We will win.
There is a saying which starts “A journey of a thousand leagues….. Its often misquoted as “starts with the first step”.
The real saying is much better and goes “a journey of a thousand leagues begins beneath your feet”.
The saying is not about things taking a long time but that if nobody does anything nothing changes.
LKP has been moving its feet for nearly 8 years. Even if it has been a rather lonely walk for most of the time things are getting busier. The scenery is changing more quickly than most people think..
There is not much hope for those that have gone before but there is no excuse for imposing the iniquities of the Leasehold system on our children. So Sir Bottomley please find below a free piece of expertly drafted Leasehold Reform legislation for you to have enacted to prove we can learn from our mistakes.
No more new residential leases under 999 years.
There you have it making the world a much better place in less than 10 words.
A 999 year lease is useless if it comes with a clause allowing the ground rent to double every 10 years or even 20 years!
I agree with Sebastian: “The answer? get in line with the rest of the world with ownership of flats.”
Anyone know what time the debate is? AM or PM?