Queen’s speech silent on meaningful leasehold and commonhold reform

By Harry Scoffin

Today’s Queen speech commits the government to legislate to go over the heads of landlords to help flat lessees gain … super-fast broadband.

The Telecommunications Infrastructure (Leasehold Property) Bill – an initiative from the Department for Culture, Media and Sport – has been described as necessary to “accelerate the delivery of fast, reliable and secure broadband networks to millions of homes” by empowering “telecoms companies to install digital infrastructure when landlords ignore repeated requests for access”.

The announcement highlights the structural deficiencies of leasehold as a model of housing, with third-party freeholders often offshore and largely indifferent to the concerns of paying leaseholders who, despite effectively owning the financial interest of a building collectively, are treated by law as tenants.

It follows a story by The Times in May:

Freeholders block fibre-optic broadband installation for flat-owners

Hundreds of thousands of households are missing out on being connected to super-fast broadband because of the opaque world of leasehold property ownership.Campaigners have recently raised concerns about the way many flats are owned by freeholders. These can charge high fees to residents who own only

The government’s Queen’s speech 130-page briefing pack also pledges legislation to give effect to a new safety regime for high-rise residential buildings. Based on the recommendations of former health and safety commissioner Dame Judith Hackitt, the system has been billed as:

“Giving residents a stronger voice in the system, ensuring their concerns are never ignored and they fully understand how they can contribute to maintaining safety in their buildings.

“Strengthening enforcement and sanctions to deter non-compliance with the new regime in order to hold the right people to account when mistakes are made and ensure they are not repeated.”

There is, however, no mention of changing the much-criticised rules around recognised tenants’ associations which, because of their drafting, hinder leaseholders from organising and representing themselves in discussions over the safety of their homes.

Briefing The Guardian on Saturday, the Communities Secretary Robert Jenrick claimed that the so-called Grenfell law would open “building owners” up to criminal sanctions for neglect of duty.

Grenfell Tower law will compel owners to keep buildings safe

Legislation that would force developers and landlords to comply with rigorous new safety standards will be announced in the Queen’s speech on Monday with the aim of preventing a repeat of the Grenfell Tower disaster.

“These reforms will ensure no building owner is able to undermine the safety of residents,” said Mr Jenrick in a tweet put out by the Ministry of Housing, Communities and Local Government earlier today.

Although it is true that external freeholders are essential to understanding how most leasehold apartment blocks operate, it is not altogether clear how the law will be effective, especially while properties are owned by shell companies based in tax havens.

LKP repeats its longstanding concern over the policy assumption that private equity investors can be forced to become long-term custodians of the buildings they own simply to monetise.

Cladding crisis reveals why freeholders are an impediment to any solution

Leasehold is, as Guy Fetherstonhaugh QC writes, “a series of laws of bewildering complexity that do nothing to resolve the conflict [between landlord and tenants], make life difficult and expensive for all concerned, and profit only the lawyers and tribunals who administer the frequent disputes between L and Ts.”

Virtue signalling over some fibre optic cables does nothing to end an asset class in ordinary people’s homes.

There needs to be wholesale change, with the government urging freehold owners to cut a deal with residents and leave these buildings as part of the transition to a situation where flats are held in commonhold and managing agents work for the benefit of the homeowners.

Despite social media graphics from the Communities Secretary and his department suggesting otherwise, the heavily trailed policies of peppercorn ground rents and a ban on leasehold houses did not feature in the Queen’s speech.

The summary of planned laws, widely seen as a foretaste of the Conservatives’ election manifesto, has raised fears over whether the ruling party will perform yet another u-turn on the issue of ending monetary ground rents and backslide on wider leasehold and commonhold reform.

Delivering the Labour party’s response to the Queen’s speech, opposition leader Jeremy Corbyn said that “not a single private block has been made safe under this prime minister” and challenged the government to “set a hard deadline for all landlords to replace dangerous cladding” and “toughen sanctions against block owners who won’t do that work”.

Mr Corbyn also criticised “this government’s abject failure on housing,” promising that Labour “will fix the housing crisis in this country” by taking decisive action to “tackle the leasehold scandal”.

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