The proposal by Communities Secretary Robert Jenrick to allow building owners to put another couple of storeys on their blocks without planning permission is a massive windfall for freeholders and torpedoes the Law Commission’s – tepid – efforts to make enfranchisement “easy, simpler and more cost effective” for leaseholders.
The initiative was talked up at the Conservative Party conference in the autumn, tweeted by Mr Jenrick earlier this month and gets substance here on para 10:
At present, the timetable for this controversial measure to become law is before the summer – a policy which has special advisers’ fingerprints all over it.
There will be no public consultation.
But what’s this?
A block of 19 flats in the Newark constituency of Mr Jenrick looks like a perfect candidate for his reform.
Allsops is selling 11 Mill Gate, Newark NG24 4TR on March 31 with a guide price of £30,000.
It boasts a yield of 7.28% with annual ground rents of £2,185pa – although would-be purchasers will be sad to see that “the freeholder does not manage or insure the building”.
So that’s two dubious income streams switched off.
But the case for raising the righthand building to the same height as the left would seem to be a shoe-in for Mr Jenrick’s proposed reform to allow two storeys through permitted development.
Freeholders shoving extra storeys on a block are a fraught issue in the leasehold world.
Leaseholders feel the developments are imposed on them, and they can end up paying for the consequences: more staircases and landings to maintain, or perhaps a new lift.
LKP was approached with precisely this complaint at the meeting of Southwark leaseholders in south London last Saturday.
Given that we are poised for serious thought about leasehold and substantive reform, is it really a good idea to hand this massive give-away to freeholders? Leaving aside the fact that it is very generous to those freeholders whose inaction over the cladding scandal has led MHCLG naming them in a list of shame.
Surely, this massive give-away should be shared with the leaseholders?
It is absurd to give such a windfall to the speculators in a building’s income streams, given that their freeholds are worth merely 1-3% of a building’s total value.
This one is Newark will likely go for rather more than £30,000, but each of the flats here is worth around £100,000.
One solution is that Mr Jenrick could limit his initiative to blocks where leaseholders actually own the freehold.
Just as leasehold is poised to be reformed – with the Law Commission anxiously fretting about freehold owners’ human rights – the last thing Mr Jenrick should be doing is giving these parasitical entities a massive windfall.
Flat block owners to get right to build upwards without planning permission
The shadows are about to lengthen across suburbia. Property owners are to be granted new rights to install extra storeys on housing blocks without planning permission in a government push to boost home ownership that appears likely to provoke furious neighbourhood debates.
Brits can soon extend homes without planning permission in red tape overhaul
BRITS will be able to build extra storeys and rooms onto their homes without any planning permission in a major overhaul of red tape unveiled yesterday. Housing Secretary Robert Jenrick revealed he is drawing up a regulations bonfire in a bid to finally deliver the 300,000 new homes a year needed to solve the housing crisis.
Giving the right to build upwards to freeholders will have a huge effect on the price for leaseholders to purchase their freehold. Freeholders could claim “compensation for loss of development potential”. My neighbours and I tried to buy our freehold years ago but could not afford it because the landlord added £120,000 to the price to compensate for his “loss”. He had not even applied for planning permission to extend upwards. The equivalent price now would be a lot more.