We have to end the horror of this feudal leasehold system
The entire parasitic structure of leasehold in England and Wales is, finally, beginning to wobble – and with a bit more prodding we could see it crash. The long campaign led by Sebastian O’Kelly at the Leasehold Knowledge Partnership has had its first success, with the government proposing a ban on new leasehold houses, while new flats will see ground rents cut to zero.
In a third article today, Patrick Collinson, personal finance editor of the Guardian, says:
“The entire parasitic structure of leasehold in England and Wales is, finally, beginning to wobble – and with a bit more prodding we could see it crash.”
He says he could fill his pages every week with leasehold scandals.
He pays tribute to the efforts of the Leasehold Knowledge Partnership – omitting only the crucial work of trustee Martin Boyd, who endless argues the leaseholders’ case with civil servants, sector stooges (called “stakeholders”, and given far more platform than they deserve) and others who, in one way or another, have livelihoods ultimately paid for by leaseholders.
In this article, Patrick turns his attention to James Wyatt, the chartered surveyor of Parthenia, who is challenging the whole valuation model of leases: the Mundy v Sloane Stanley Estate which is heading for the Court of Appeal in January and doubtless the Supreme Court after that.
It goes to the heart of the revenue generation of leasehold and is a scandal than dwarfs leasehold houses.
“In the longer term we need to find ways to make leasehold a thing of the past. Some daft property “experts” insist it has to remain for apartments, ignoring the fact that it has been abolished in almost every part of the world. Happily, we have legislation that allows for “commonhold” where everyone in an apartment block part-owns the land the property is on. The government could simply insist all new flats are sold on a commonhold basis.
“But what to do about existing leaseholds? Of course, greedy freeholders who have ruthlessly exploited leaseholders will demand “compensation”. As Sir Peter Bottomley MP says, slave traders used the same arguments when their “assets” were taken away.”
Related posts:
Guardian reports the Taylor Wimpey £130m offer to settle ground rent scandal
Guardian’s Patrick Collinson welcomes Nationwide exploding the ground rent scandal
Guardian reports the Blythe Court ground rent scandal
Guardian’s Patrick Collinson says ‘time to reform leasehold in entirety’
Patrick Collinson, of The Guardian, … on leasehold
Guardian (again today) on freeholders’ endless fees
excellent article! every leaseholder and everyone who cares about creating a more just system read and promote in social media.
“Meanwhile, in Scotland I love the fact legislation rejecting leasehold doesn’t mince its words – it’s called the Abolition of Feudal Tenure (Scotland) Act 2000. Can we have the same in England and Wales, please?”
Double Awesome.
My response to DCLG is already 34 pages with graphs and formulae.
I know they won’t read it.
Seeing Leasehold rip offs can turn into an obsession. I either write or howl at the moon.
What view does LKP take on the statutory modification required adding when extending a lease using s42, namely that the freeholder will expressly retain the right to go to court to redevelop the property at the end of the EXISTING term, subject to “fully” compensating the leaseholder?
Consider the implications:
One leaseholder in a block buys a 90 year extension and pays full premium and section 60 fees etc.
No other leaseholder extends or the majority do not. There is no guarantee everyone will.
Come end of original terms (all ‘maturing’ nicely around the same time) the other flats revert to tenancies and, presumably, can be shifted without too much difficulty.
Our happy chappy (could even be me in a few years!) with 90 extra years is left sitting in a blighted empty block.
How much exactly would ‘full” compensation come to?
Anyone know what happens in practice?
Is there any aspect of leasehold that isn’t designed by governments to advantage the freeholder?
Re previous comment… okay, it would not be me personally, even if I take up exercise. My successor.
The best way to end the leasehold system is to give :
1. the leaseholder automatic right to be a director of the company which owns the freehold in his block..
2. The leaseholders legal right to enfranchise at 10 times the first year’s ground rent. If any existing freeholder company has lost money, they can sue the builder.