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Winning elections and the leaseholder vote

LeaseholdLeasehold tenure is unique to England and Wales. Nearly all of the English speaking world have moved away from this feudal relic. The housing problems of leaseholders are seldom discussed within Labour party circles. It was not mentioned in the 2015 Labour Party manifesto. Nor has the Housing and Planning Bill currently before Parliament addressed these problems.

The respected campaigners, the Leasehold Knowledge Partnership (LKP) have discovered that there are more leaseholders throughout England and Wales than previously estimated.  In order to win forthcoming elections Labour needs to respond to these concerns.

According to the LKP the number of leasehold properties in London is estimated to be 1,766,777. This number is considerably higher than the figure (500,000) used by the Greater London Authority service charge enquiry in 2012. Two thirds of all leaseholders in England and Wales live in London. 80 % of all newly built properties in London are leasehold. This figure is likely to increase if the proposals to give housing association tenants the right to buy goes through Parliament.

The Government believes that in 2012/13 there are 4.1 million households in England and Wales who are leaseholders. There are 2.4 dwellings privately owned and 1.7 million dwellings owned but in the private rented sector. This figure does not include properties where a leaseholder has a local authority or housing association as a freeholder. The previous figure was 2.5 million households.
The increase has come from a report by LKP  published in 2013.  The Coalition Government produced a technical paper on this subject which involved a data matching exercise with the Land Register and the House Condition survey.

LKP has produced an interesting analysis of all parliamentary seats that shows the number of leaseholders in each parliamentary constituency in ranking order.

A much criticised report by the Competition and Market Authority in 2014 estimated that the scale of unlawful service charges could be in the region of £34 to £98 million per year.  “Which “estimated the same figure to be £700 million in 2102. Satisfaction levels were found with local authority leaseholders to be lower than in the private sector. Apart from the statutory regulation of managing agents their recommendations were essentially voluntarist. The Government endorses this report.

Jim Fitzpatrick MP for Tower Hamlets has tabled an amendment to the Housing and Planning Bill that would see the introduction of the commonhold tenure becoming compulsory by 2020. This is likely to be rejected as the Government is more concerned with the interest of freeholders such as the Duke of Westminster than individual leaseholders.

Labour should recall that the 1997 Manifesto described leasehold as unsuitable for the 21st century. The commonhold tenure was introduced by Parliament in 2002. Under the commonhold tenure residents jointly own the freehold and can decide how to manage their property. This new tenure failed as its implantation lacked the required political determination. An Opposition campaign inside and outside of Parliament to support the rights of leaseholder should reap political rewards.

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4 Comments

  1. David Pavett says:

    Labour manifestos post WW2 have repeatedly promised leasehold reform.

    It was not in the ’45 manifesto but it was in ’50, ’51, ’55, ’59, ’64, ’66, ’70.

    It did not appear in the manifestos for Feb ’74 and Oct ’74 but reappeared in ’79, ’83, ’87, ’92, ’97 and 2001.

    It was not in the manifestos for 2005, 2010 and 2015.

  2. Dave Roberts says:

    On paper this sounds good but basically means that there can never be rental properties either residential or commercial again. Extreme I know but the writer of this article is vague as to what they mean. I can greatly expand my argument but need to know if I am to be moderated out of existence.

  3. David Pavett says:

    It is a real shame that specialist issues like this attract so little attention on the left. This is a very important issue which tells us a lot about class power. We need people on the left who are up to speed on such things. Without that we are ineffective when faced with detailed proposals coming from the right. I am going to encourage a member of my LP branch, who I know is well informed on such matters, to contribute. Perhaps others could do the same.

    We need to be careful about only focussing on headline issues – our version of celebrity culture.

  4. Hamid Khan says:

    This is a really serious issue and will affect vast numbers of people. This in essence is a cabal of property owners who in the private sector own the freehold of numerous properties. They then get together and set up management companies, with managing agents who set ground rents and service charges. This business is worth over half a billion pounds and increasing. They will set costs of repairs and in essence there is very little you can do about it. Of course you could challenge them in a Leasehold Valuation Tribunal, if you have many spare hours putting you case together and then add several thousands for legal fees. Hardly surprising most people do not challenge them.
    Often leases are written in long convoluted legal jargon and more often than not people sign them, with a number of spurious clauses that have been added, especially around a very dodgy practice of buildings insurance, where the costs are passed to the leaseholders and freeholders make huge amounts of commission through the managing agents.
    This is all unregulated and as more and more flats are being built this will just become a bigger and bigger problem where wealthy freeholders will just continue to exploit leaseholders.
    In the public sector many Councils or some Housing Associations are the Landlords. At this point I start to struggle with “well you brought you flat under right to buy that I fundamentally oppose so tough”. However, in order to continue the debate similar problems exist and often leaseholders are left with huge repair bills that they simply cannot pay.
    This is an area for fundamental reform. If Sadiq starts to build more homes, they will be mainly flats and the Party must have a policy position on this. Clearly the Tories will never touch this as they will be hurting their backers, the rich landowners.
    It is important we add leasehold reform to Housing Policy and continue to press for change.

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