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You are here: Home / Latest News / Wellcome Trust ‘wrong’ over exploiting the lease extension racket in its property portfolio, Bottomley tells The Times

Wellcome Trust ‘wrong’ over exploiting the lease extension racket in its property portfolio, Bottomley tells The Times

December 18, 2019 //  by Sebastian O'Kelly

Onslow Square, part of the lucrative 58-acre estate of prime London property, where freeholds are owned by the second biggest charity in the world, the Wellcome Trust

Sir Peter Bottomley, freshly re-elected as a Conservative MP by the voters of Worthing West, has attacked the Wellcome Trust for advancing its aggressively monetising lease extension practices in the courts.

Sir Peter was commenting on an article addressing the Wellcome Trust’s investment finances, which include a £25 million gain on backing the pound before the election. The Wellcome Trust is often described as the world’s second largest charity after the Bill and Melinda Gates Foundation.

Wellcome Trust wager on pound eases pain of poor year at home

Britain’s biggest charity has made a profit of about £25 million by betting on the pound over the past few months – a consolation prize after a year in which UK assets acted as a drag on investment returns.

Sir Peter left the following comment:

There is reference to the Kensington estate (bought from the Smith Charity).
Many see the aggressive expensive action to rearrange the price of lease extensions as wrong. The trustees should consider how ethical their actions have been.
Had I been one of them, I should have challenged them.
Rather than subject readers to the joys of hedonic regression, let us trust that the Law Commission, government and parliament our an end to the expense, the worry and the unfairness of the present situation.

Sir Peter’s reference to hedonic regression – the mathematical model here deployed to value lease extensions – is a reference to James Wyatt, the chartered surveyor who went to the Court of Appeal to challenge the freeholder-friendly mathematical modelling which makes lease extensions so expensive.

The models were all commissioned by the big London residential freeholders and, unsurprisingly, are hugely advantageous to them. Mr Wyatt is proposing a fairer model, called Parthenia, which relies on data that has not been skewed in the freeholders’ favour.

LKP director Sebastian O’Kelly added a further comment to the Times addressing the Wellcome Trust as a residential landlord:

Sir Peter Bottomley makes important points.

The leasehold system is unbalanced. It would be encouraging if freeholders did not abuse powers.

But Wellcome Trust spent £114,000 to get £6,000 service charges out of a truculent non-paying leaseholder. Of course, costs against her under the lease.

In no other area of civil law does it makes sense to spend so much for so little, but the freeholder’s costs are guaranteed under most leases.

It was bullying. It was disproportionate. It ruined the leaseholder. It ensured the others in Onslow Square paid up. Forfeiture may have been avoided when it was clear this would be public.

So, if even an organisation as otherwise saintly as Wellcome over-deploys the powers available, surely we are not wrong in arguing that the fast-expanding leasehold sector – which is creating a 100 more dukes of Westminster – needs sorting out?

Wellcome Trust spends £114,000 on lawyers to defeat Onslow Square leaseholder in £6,000 dispute

Related posts:

Onslow Square forfeitureWellcome Trust spends £114,000 on lawyers to defeat Onslow Square leaseholder in £6,000 dispute End lease extension ‘injustice’, veteran MP urges Commons Bottomley attacks ‘uncivilised extortion’ of lease extension racket in Mortgage Solutions Private Eye reports challenge to ‘scandal’ of lease extension values Justin Madders MPJustin Madders launches Bill to end the enfranchisement and lease extension racket

Category: Informal lease extension, Latest News, News, NewsFeaturedStoryTag: Sir Peter Bottomley, The Times, Wellcome Trust

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Reader Interactions

Comments

  1. watkins drive

    January 5, 2020 at 8:16 pm

    Having had the misfortune to be saddled with First Port and Home Ground who has mugged me for £1,500 per year, and the equity on a one bedroom flat has lost £20,000 over the last number of years, and nothing seems to stop the escalating service charges.
    So is Boris going to do what he promised [ to reduce ground rent to zero]
    Is there anyone out there willing to put up a fight and take fight to Downing Street. I think that is the only answer. If there are others like me, I am sure we can stop this daylight robbery.
    If there are people like me . I think it is time to say no more.

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