Housing secretary Michael Gove has been accused of many things – being a “betrayer” for one – but as head of many government departments he has been an incorrigible reformer and enforcer. That is why former prime ministers David Cameron and Boris Johnson relied on him so heavily.
His reforms on long leaseholds are well placed – although, to be fair, granting freeholds to lessees has been a feature of property for some time. In the past, developers tried to hang on to the freehold interest of new schemes, but now they tend to offer it to residents, gratis, when the last unit has been sold.
The Crown Estate protects its freehold status and only grants leases on its properties since it is protected by statute. I wonder whether Gove has it in mind to break this fiefdom?
Leases are very necessary for the orderly, multi-habitation of properties where there must be a strict code of discipline for one’s neighbours, as well as control of the management of the building and its service charges. The head landlord or freeholder must have the control of a lease to shepherd the tenants. In this sense they will always exist, the only difference being whether the lessee has a share of the freehold or not.
Flying freeholds, and where there are commercial and residential properties in one development, will need careful attention and this is where the devil is in the detail.
While Gove is swinging the sledgehammer, let the labyrinthine planning process be his next target. We are building only 50% of the 300,000 homes that the UK needs to maintain the housing equilibrium. We managed to build this quantum in Margaret Thatcher’s era, for a then much less populated country.
The process is steeped in petty bureaucracy and politics, not assisted by environmental and conservation zealots, all with competing self-interests. It is the equivalent of having six drivers and steering wheels for the same coach, with seven directions.
So come on Gove. You have work to do on leases and the property planning process if you are going to crack these issues.
Trevor Abrahmsohn, managing director, Glentree International
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