By Harry Scoffin
Leaseholders were joined by MPs of all parties at a last-ditch protest on Wednesday to ensure no flat owner faces surprise cash calls after falling through the gaps of the government’s elaborate measures to make housebuilders pay for the building safety scandal.
Campaigners said government plans meant huge bills could still be faced by leaseholders in sub-11 metre blocks and in high rises that have collectively enfranchised and own the freehold. Concerns were also raised on behalf of buy-to-let leaseholders with more than three properties, who face uncapped costs for non-cladding fire safety remedial works, which can dwarf the bills to replace combustible façade materials.
Ritu Saha, co-founder of the UK Action Cladding Group (UKCAG), told the protest:
“To Mr Rishi Sunak, we say ‘Fix First, Fund First, Collect Later’. Release us from this limbo. And if you do not, we [who you call] ‘usual sources of funding’, we vote. We vote and we will make our voices heard with our vote at the next local and general elections.”
The day of the demonstration coincided with Parliament rushing to get the Building Safety Bill on to the statute books before the new parliamentary session on May 10 (which is expected to see further leasehold reform).
Hundreds of campaigners were joined by politicians from across the political divide, including Father of the House Sir Peter Bottomley, LibDem leader Sir Ed Davey, shadow housing secretary Matthew Pennycook, former Tory leader and work and pensioners secretary Sir Iain Duncan Smith, former Labour shadow foreign secretary Hilary Benn, crossbencher peer and ex-Brexit Party MEP Baroness (Claire) Fox and the veteran housing select committee chair Clive Betts.
Sir Ed argued that the building safety crisis is a leasehold scandal writ large, telling campaigners and assorted journalists:
“The cladding scandal has revealed what many of us have known for a long time, that the leasehold system in our country is feudal. It’s out of date. I want to pay real tribute to Leasehold Knowledge Partnership, who have helped people like Sir Peter and myself who have been running the all-party parliamentary group on leasehold reform for a number of years. The work they’re doing on the cladding scandal, but the work they’re doing on reforming this outdated form of property ownership. Too many people have been exploiting you and millions like you and we can’t have that in a decent, democratic society.”
Maverick peer Baroness Fox, a Haringey leaseholder, also made the connection between cladding and the unfairness inherent in residential leasehold tenure:
“I was very proud of myself for buying my own home. I then discovered being a leaseholder doesn’t give you the rights of homeownership that I thought [I would be getting].
“So one of the big tasks ahead is fighting to reform the whole leasehold anomaly. In other words, there’s bloody loads to do, isn’t there? There’s loads to do. I think what you’ve done, is you have started more than you thought. You are trying to defend yourselves, but you actually opened the eyes up of many people in this country about the state of housing and long may it continue.”
Sir Iain Duncan Smith told the protestors:
“We have made progress, the government is now listening, they are making changes. [But] it’s not over yet. The 11 metre issue has got to be brought in … We are not going to give up until we have got you all out of this problem. Those responsible should pay, it’s as simple as that. We should not abandon you. So all I am saying is all the line-up of MPs here, doesn’t matter what party we come from, this is a wrong that must be righted and we will work together despite party politics.”
Katie Kendrick and Cath Williams, co-founders of the National Leasehold Campaign and LKP trustees, came down from the north-west to give support under the banner of “leaseholders together”, which was the theme of a EOCS-NLC-LKP Westminster rally last summer.
Earlier this month, Levelling-Up Secretary Michael Gove announced that he had secured undertakings by major homebuilders to pay over £2 billion to make safe the residential buildings they had played a role in developing over the last 30 years and that the government’s building safety levy would be upped to raise an additional £3 billion to further protect flat leaseholders.
That the cladding campaigners on Wednesday spent their energies highlighting technical policy and legal exemptions to government protection for flat owners in blighted blocks shows how far they, together with Leasehold Knowledge Partnership and the All Party Parliamentary Group on leasehold and commonhold reform (chaired by Sir Peter Bottomley, Conservative; Justin Madders, Labour; and Daisy Cooper, LibDem) have set the political weather and persuaded government into late policy changes.
With DLUHC ‘under new management’, it is clear there is a sincere desire to protect leaseholders and make industry commit to stump up for works, either by way of voluntary contributions or an enlarging of time-limited taxes, moving away from hollow ministerial pleas to “building owners” and property developers to “do the right thing”; detested forced cladding loans; and the “usual sources of funding” (i.e. the ordinary leaseholder population) for uncapped non-cladding costs.
These points were echoed by MPs across the House of Commons on Wednesday who, following the protest, sat to discuss the Building Safety Bill for one of the last times before it enters law.
MPs were presented with a series of leaseholder-friendly amendments made by members of the unelected revising chamber, the House of Lords. From the ruling party, only Sir Peter Bottomley, perhaps afforded greater manoeuvrability by the whips for being the Father of the House of Commons, the longest continuously serving (male) MP, rebelled by voting against government moves to lift the amendments off the Bill. He said he had to vote in “a non-party way to try to keep the intentions of the House of Lords going”.
Leeds Central MP Hilary Benn, who has been involved from the beginning of the crisis, said that while the government’s cladding shift “has been a team effort”, it was important for him to acknowledge that “given the Government majority, dissent on the Conservative backbenches has been really important in getting us to this point. I pay particular tribute to the hon. Members for Stevenage (Stephen McPartland) and for Southampton, Itchen (Royston Smith).”
Government should have equity stake in cladding freeholds covered by the fund, Hilary Benn MP tells APPG – Leasehold Knowledge Partnership
For the first time a senior MP has called on the government to take an equity stake in cladding sites that are remediated with public money. The call was made today by Hilary Benn, Labour MP for Leeds Central, at a joint APPG meeting into fire safety and leasehold reform.
Former firefighter and ex-justice minister Sir Mike Penning agreed with the argument that assembling a Tory ‘awkward squad’ was helpful to the leaseholders’ cause:
“What an awful long way we have come with this Bill. On the previous Bill, the Fire Safety Bill, we were told categorically that that was not the right vehicle for the sorts of remedial help people needed in all our constituencies and that this was the Bill. To be fair to the Minister and his civil servants, there has been huge movement—huge movement—compared with where we were when there was considerable unrest on the Conservative side of the House as well as around the House. One of the reasons this Bill has been changed so much is that there was general unrest across the Floor of the House as to what the Bill was actually saying and doing. Can I pay tribute to my colleagues on this side of the House? With a majority of this size, the Government could have ignored us, but they could not because there was too much unrest on this side of the House and the campaigning went on. I want to pay tribute to my colleagues on that point.”
The Conservative Hemel Hempstead MP did admit, however, that the Building Safety Bill is far from perfect and said that he would be pushing to ensure that “a lot of the work” to resolve many of the problematic elements and anomalies in the Bill would happen “through secondary legislation”.
His party colleague Bob Blackman, MP for Harrow, who has co-authored all of the housing select committee reports on the leasehold and building safety scandals under longstanding (Labour) chair Clive Betts, MP for Sheffield South East, also did not pretend that the Bill was optimal and held out hope for improvements through secondary legislation, saying:
“The Bill is vastly improved compared with when it left this place. I will support it wholeheartedly today on the basis that we will not draw a line under it and that will be the end of it; secondary legislation will be required to amend it further. The evidence that was presented to the Select Committee suggested that we still do not know exactly how many buildings need fire remediation, how many need cladding remediation, and what the cost of that work will be. Until we have that data, we will not be in a position to say what the total cost will be to the Treasury and the Department, and how it will be funded.”
By contrast, in comments widely criticised on social media, former Tory cladding rebel Stephen McPartland claimed:
“We have won the campaign. Leaseholders have won. Up and down the country millions of leaseholders have won, but we must turn that victory into reality. We must ensure that those leaseholders live in protected buildings.”
Matthew Pennycook, for the Labour opposition, made clear his party’s displeasure at the rushed way in which the Building Safety Bill was reworked by government, being done almost exclusively in the unelected upper house and leaving little time for sustained amendment-by-amendment scrutiny by parliamentarians:
“… the manner and the pace at which this already complex and technical Bill has been overhauled to reflect the Government’s belated change of heart has been deeply problematic. Large sections of the Bill have been completely rewritten on the basis of hundreds of Government amendments tabled in the other place that the noble Lords had relatively little time to consider carefully or properly scrutinise. We welcome many of those amendments, particularly the removal of the building safety charge and the abolition of building safety managers, and we also welcome the important concessions the Government made in the other place in response to Labour amendments—for example, to exempt social housing providers from the levy. But that does not detract from the fact that this is no way to make good law, and I want to put on record the Opposition’s serious misgivings about the way the Government have gone about revising the Bill. As a result of the way it has been modified, it is now, by all accounts, something of a mess, and the five pages of complex Government amendments tabled yesterday afternoon, which again provided hon. and right hon. Members in all parts of the House with little time to properly consider them, do little to remedy that fact.
“Nevertheless, the Opposition have always maintained that we want to see a version of the Bill on the statute book as soon as possible. As such, our focus is now on ensuring that its most glaring remaining defects are addressed so that it can be passed in what remains of this Session. To that end, there are five specific issues to be considered today: the duties placed on the Building Safety Regulator with regard to reviewing safety and standards, protection for leaseholders in buildings below 11 metres in height, protection for leaseholders in enfranchised buildings, the issue of buildings held in trust, and the proposed leaseholder cap.”
The idea that the government has other opportunities to extend leasehold protections and improve the existing policy was the talk of protesters throughout the day. Some pointed out that the heavily trailed DLUHC and Law Commission leasehold reforms set for the Queen’s Speech could include a few helpful building safety related policies.
Back in the Commons, Leasehold Knowledge Partnership was praised for its engagement with the issue.
“The right hon. Gentleman mentioned the Leasehold Knowledge Partnership, which I should have included in the list of those to be thanked. I think that representatives of the partnership and the National Leasehold Campaign have had time to get from the rally to the Gallery, so I repeat the thanks to them. I include with them Lord Greenhalgh, who has engaged with all the voluntary groups. I can think of no better aim for a campaigning charity than saving residential leaseholders from a situation from which they could not otherwise escape,” said Sir Peter.
Mr Benn told the house he was “delighted to echo the Father of the House. The [Leasehold Knowledge] Partnership has been brilliant in its analysis of what has and has not been done, what the problems are and what the solution ought to be, and it has also been persistent.”
Sir Peter was clear that the Building Safety Bill cannot be the seen as the final solution to the crisis which has frozen the flats market with sales down 60% in three years, crippled household finances, and taken an enormous human cost in the five years following the Grenfell Tower catastrophe.
He hinted that the single largest roadblock to an optimal policy response was chancellor of the exchequer Rishi Sunak and also paid tribute to former Victoria premier Ted Baillieu, a centre-right politician whose muscular pro-homeowner approach in Australia to cladding, he suggested, should be the basis for that of the UK government’s:
“Bluntly, the thinking in the Treasury has been the cause of much of the delay. The tragic deaths at Grenfell, where over 70 people died unnecessarily, were a spur to action. For too long, however, people said, ‘Look at the Royal Borough of Kensington and Chelsea; this is all its fault.’ Most of the blocks affected are not in Chelsea or in Conservative-controlled areas, so we all have a responsibility to accept that we got things wrong.
“What was needed to get this right? It was best put by Ted Baillieu in Victoria, Australia, who said that it was necessary to find the problems, fix the problems and fund the problems, and then get after the people who are responsible. If we had done that, for the last four years many more innocent residential leaseholders would have been able to live in homes that they knew to be safe and saleable, and we would be many steps further forward.
“I hope that my hon. and right hon. Friends in the Department for Levelling Up, Housing and Communities want to make sure that no block is left unremediated—in plain English, to make sure that every block is made safe—and then go after the money, but the Treasury is blocking that.”
LKP trustee Liam Spender, who has delighted readers with his searing analysis of the Building Safety Bill and its various iterations, says:
“Yesterday went as expected. Many Conservatives believe that the Bill represents the best the government is willing to offer. Without a Conservative rebellion in the Commons, there is no real pressure on the government to make further changes.
“The Bill is a significant improvement on where we started. More can be done in the detailed supporting regulations that will follow over the next few years.
“Leaseholders will not be going away until the issues are resolved once and for all.”
As a concession, government announced that a public consultation on how its existing policy will affect those leaseholder-run and owned sites, with housing minister Stuart Andrew telling MPs:
“I know that Members will still be concerned about how we can protect leaseholders in leaseholder-owned buildings, which is why I am announcing today that the Government will consult on how best leaseholders in collectively enfranchised and commonhold buildings and other special cases can be protected from the costs associated with historical building safety defects. The consultation will allow the Government to understand fully the position regarding leaseholder-owned buildings with historical defects and identify whether further measures are appropriate to address specific circumstances in which leaseholders may unintentionally be exposed to disproportionate costs.
It is not clear when this consultation will go live nor whether the policies that may flow from it will come too late for enfranchised blocks by then.
The full debate can be read in Hansard here:
Great to have so many MPs in support. Many thanks to the organisers, (I was there).
Behind the safety issue, we still have some whopping great lies to tackle, some of them issuing to this day from government. We have joined-up efforts, I would say, by government, local councils, HM registrars, ombudsmen, trading standards, and police, all to deny that leasehold frauds are anything to do with them.
The lie is made more obvious by the fact that councils themselves keep trying to deny liability for their own long leases. HM Registrars deny liability for processing transfers that were patently dishonest (following ‘ground rent’ sales). I put it to them, chapter and verse, that land law does not support the way they operate. (At common law, consent was always essential to the conveyance of either side of a lease contract. Section 151 allows rent or a future reversion to be freely conveyed, but a future reversion is not a legal estate. Rent is neither here not there, and the freehold common parts have already been sold to the collective use of lessees, making non-consensual transfers dishonest). Registrars make pretences and excuses with no substantiation. ‘Only administrators’ my hat. They appear to be following superior orders.
Government, meanwhile, pretends to have suspended Housing Act protection by issuing dubious ‘general consents’ for councils to do whatever they please. This ignores the fact that the ‘public housing land’ has already been sold to end consumers. Clearly the intention is to help councils in their efforts to deceive homeowners. (Read the leases and you will see what I mean. “The Lessor” INCLUDES successors in title, so is not replaced by them, and HOLD UNTO the lessee cannot mean sell to a stranger. Councils are on the hook for 900 or more years. Government wants them to be off the hook, knowing that this is bound to involve deceiving consumers who are voters and taxpayers.).
I need some help. These organisations are too big for me to take on. I have narrowed down these systemic faults and mistaken government attitudes that tend to affect all long leases. These make leasehold all the more feudal through mispractice and lack of sanction, even though it is supposedly non-feudal in law. Vendors pretend to escape faulty mis-sold contracts while leaseholders are held captive. Developers including councils play pass-the-parcel with freeholds that they have contracted to HOLD for the lessee. Government appears to be helping them and joining in on the dishonesty.
We still need protection from future abuse. It is time to take legal action in a much bigger way, but issues of principle are very expensive to litigate. My group of lessees is too small and would not want the risk. An alternative might be to summon some of the officials to give evidence to the Select Committee? I get only sporadic replies from LKP admins. Who can I write to, please, to discuss possibilities?
The message is spot on. The leasehold system in this country is indeed feudalistic and decades out of date. It was and so far remains a vehicle for unwarranted profiteering by freeholders and speculators with little to no regard for those who are driven into the system, with little to no alternative options and can then become trapped. There are similarities in other housing market sectors, including the expanding residential Park Homes market, where freeholders are using concealed short-term leases that could leave them homeless and about which the government has to-date done nothing. The way forward is clearly commonhold, the elimination of gross profiteering and ensuring that people who simply need a secure roof over their heads are not stitched into one-sided contracts. Major housing reform is essential to the well-being of current and all future generations and LKP and its supporters should be widely and loudly applauded for its initiatives and determination.