July 2017 It is great to see the two DCLG consultations launched and the opportunity to have open engagement to address the issues. In reality leasehold is not the evil thing that is being portrayed. Doubling ground rents and unreasonable administration fees are the evil things.
Roger Southam, unaccountably the chairman of the taxpayer-funded Leasehold Advisory Service, attempts the muddying of waters today that the leasehold sector habitually deploys whenever its affairs are scrutinised.
“Leasehold is not the evil thing that that is being portrayed,” he writes today on the LEASE website.
While deploring some aspects of leasehold management, he unaccountably omits examination his own.
Mr Southam, now employed by Savills but formerly the owner of Chainbow property management, embedded his own company into the leases of Taylor Wimpey London sites.
This meant his company would have owned the management that controlled these expensive blocks of flats in perpetuity.
It is a practice of creating tripartite leases and it is deplored across the sector.
Even though Taylor Wimpey had sold the freeholds – to Adriatic Land – it interceded, removed Chainbow and the company was handed to the leaseholders
His other priority in the sector was to “maximise ground rents” as a consultant to freeholders.
Mr Southam today makes the argument that developers have to make income from the investment sale of ground rents to make projects viable.
This is difficult to sustain in the face of the developers helping themselves to gargantuan remuneration, such as Jeff Fairburn CEO of Persimmon getting £106 million as a performance bonus.
There appears to have been some fat in the viability of Persimmon’s schemes hitherto, to put it at its most polite.
Then Mr Southam moves on to the utterly predictable line that leasehold is necessary to pay for communal assets, such as eco-friendly communal boilers.
So, leasehold is necessary to save the planet.
“There are parades of houses that have been sold freehold that should have been leasehold,” Mr Southam writes.
Well, at least it is good to know where the taxpayer-funded Leasehold Advisory Service is going to stand in all this: firmly alongside the housebuilders and the money.