By Harry Scoffin
Conservative MP Crispin Blunt is being urged to throw his weight behind an LKP-backed proposal to make state support for developers contingent on selling ALL new-build flats as commonhold or share of freehold.
The appeal to a Tory backbencher who has characterised leasehold tenure as an “arcane feudal system” may have resonance with more of the 164 lawmakers in the leasehold and commonhold APPG, of which LKP is the secretariat.
Leasehold activists in Mr Blunt’s constituency are set to meet the maverick politician next week in Reigate, Surrey. LKP understands she will explain to him the troubles she has faced as a buy-to-let landlord of a leasehold flat.
The development comes as government considers which contracts to renew ahead of its April 2021 relaunch of Help To Buy.
The 2021 iteration of the government’s flagship housing scheme is expected to include an outright ban on leasehold houses, a policy first announced by Sajid Javid back in December 2017. LKP has previously criticised government for failing to end this taxpayer subsidy sooner.
Mr Blunt seems the ideal candidate to lobby government to pull support for the feudal practice of selling flats as vulnerable tenancies.
In a powerful letter to MHCLG officials in September 2017, he claimed:
“Failure to legislate that all new properties be subject to commonhold ownership has resulted in a collective social cost, for example; increased number of leasehold disputes going through the tribunal system, as well as emotional stress and economic costs to individual homeowners who regard their dwelling as shelter for themselves and their family.”
Ministers, civil servants, Law Commission officials and the obfuscators of the leasehold sector love to pose the entirely rhetorical question of why commonhold has not taken off since it went on the statute book in 2002.
The answer – that housebuilders make so much extra money playing the angles of leasehold – is blindingly obvious, but seems to require constant repetition.
Using the policy lever of Help To Buy to popularise commonhold would be an artful move. It would strike the necessary “slow-mo death blow” to a tenure successive governments have tried to reform (and failed). Twenty years has passed since the New Labour government described leasehold as “flawed to its roots” – now is the opportune moment to finally kill it off.
Going down the Help To Buy route should also be much easier than instituting an outright ban on the creation of new leasehold flats. Crucially, it would face less opposition from developers and other vested interests. If the volume housebuilders want to keep trousering life-changing bonuses, then they must abide by the new rules, government should say. The money is, after all, coming from the hard-pressed taxpayer.
The Times’s February splash on Persimmon potentially losing its lucrative Help To Buy contract contained a quote that suggests there is the political will to reinvigorate commonhold:
“James [Brokenshire] is clear any new government funding scheme will not support the unjustified use of leasehold for new homes, including Help To Buy.”
In the same way government has sensibly committed to restricting Help To Buy to first time buyers only, we know there is the ability to amend the 2021 scheme so flats can only be sold as commonhold units, and where that is not possible (for the larger, mixed use schemes unsupported by the existing legislation), developers must be mandated to sell the property as share of freehold with a residents’ management company embedded in the leases.
Ground rent grazers just wouldn’t exist under commonhold.
There would be no role for the monetising third-party landlord to control flat owners and their destinies.
Commonholders will be in the driving seat, having full control over how their money is being spent and how their buildings are managed. No more open cheques and opaque service charges.
We just need government to have the courage of its convictions and make commonhold more common by tweaking Help To Buy. It’s really not a big ask.