Abolish The Leaseholds

Georgia L. Gilholy writes:

The Fleet Street rumour mill has it that Housing Secretary Michael Gove is poised to bring forward a major leasehold reform bill. The bill plans to cap ground rents — often pricey bills that leasehold tenants must pay to their freehold landlord — at 0.1 per cent.

This simply is not bold enough. The government must push for an outright ban on this semi-feudal system, almost unique to England and Wales, that leaves thousands trapped in property purgatory.

In case you are lucky enough to be ignorant of this nightmarish arrangement, here is the gist: leaseholders must take out mortgages to “buy” like regular homeowners. However, their status is little more than that of long-term renters, officially having a saleable right to occupy the property. Once their leasehold period concludes, ownership returns to the freeholder landlord.

This setup allows freeholders to charge leaseholders service that may total tens of thousands of pounds annually, and some unfortunates have even been made to seek permission to paint their front doors. The situation means thousands of mortgage payers are trapped in homes they cannot afford, and it is nigh on impossible for them to sell their leasehold on if under 80 years remain on the contract.

The government already faces major criticisms, particularly from my age group, for betraying their manifesto pledge on homebuilding targets — and the Prime Minister himself reiterated his opposition to instructing councils to build on greenfield sites just last week.

With Sir Keir Starmer announcing his pledge to build on the Green Belt, the pressure is on for the Tories to make progress on housing, with just 18 months to go until the next general election. I had to stifle my scoff when, on Tuesday, Gove assured the National Conservatism conference in Westminster that he remained committed to house-building, yet the leaseholding issue which he also reiterated his plans to “reform” is almost as important.

There is no use in building at all if people risk becoming saddled with properties destined to become burdens. There is no use jumping on the crusade for homes if no real path to ownership is available.

Given that the leasehold system mostly, but not solely, impacts flats that are more likely to be in metropolitan strong Labour seats, Tories are less likely to push the policy as a vote grabber. It hardly helps matters that the Conservatives have plenty of rich property developers on their list of donors.

The 2020 Law Commission report outlines in painstaking detail what needs to change, why and how it could be done. Gove has hardly been shy about his stance on the system, describing it as “semi-feudal” and “outdated”, but still no abolition.

Fresh polling suggests that a measly eight per cent of those who voted Tory in 2019 oppose leasehold abolition, and a whopping 60 per cent are in favour. Almost half (49 per cent) of coveted Red Wall voters also support a total end to the system.

If Gove wanted to use next month’s speech to table a policy that would both win votes and (unlike the house building pledge) feasibly begin operation by the next general election, taking a sledgehammer to the leasehold system would be the obvious option.

Perhaps Gove is once again keen to pitch himself as the next leader of his party. His good reputation amongst the liberal-leaning civil service would certainly help his case, but maybe he would fit the role of a steady interim manager rather than a charismatic rebrander after over a decade of crisis-ridden Tory administrations.

Might he even be positioning himself as the future head of a Red Tory/Blue Labour splinter party, should a Labour-Lib Dem deal usher in proportional representation? It would certainly explain his disregard for making enemies out of the Blue Wall NIMBYs.

Gove is already on the record complaining that Brits need better property density — already an outlier by European standards in terms of our distaste for apartments. Is this any surprise, though, given the malevolent regime that governs most communal buildings in England and Wales?

Allowing more Brits to live closer to urban work will mean building more, but it will also mean building up. Yet surely any benefits this might add to our productivity will be minimal if those persuaded or pushed into flat living are forced to sign away their freedoms, into the miserable lottery that governs the majority of multi-occupancy properties in England and Wales?

Do we want a country which continues to feed the appetite of a cartel of vested interests from offshore investors to corporate lobbyists, at the expense of our current and distant aspirations? Or one which has a positive vision of the future, including the security of true home ownership?

The mission of leasehold abolition is not only a quest for a much-needed uplift in material circumstances, but a microcosm of the intellectual struggle at the soul of conservatism, little of which appears to be taking place inside the Conservative Party proper.