The worst that can be said about the Great English £Leasehold Scandal is that it is perfectly legal.
The second worse thing to say is there’s nothing new to say to expose the £leasehold Scandal. This is not some furtive, unseen exploitation or consumer rip-off. This is open, deliberate, well understood and backed by English law and the courts, and huge in its scope for £££.
What is the Great English £Leasehold Scandal?
People need a home. Some can only afford to rent. Others aspire to become home owners. Housing is a market commodity, not a human right. Naturally housing is not free, not even in a night shelter (local council pays).
Renting is easy to understand. The owner of the property is the landlord….
The landlord personally invests in the cost of the premises and its ongoing repair and maintenance. The tenant signs for a periodic interest with exclusive occupation at an agreed rent. Meanwhile the landlord keeps the fixtures and fittings in good order, repairs the boiler and stops the rain drowning baby in her cot. Some landlords fail in this duty of course, but the idea is straightforward.
Some people wish to avoid becoming a tenant. They aspire to more security and ownership over their home. They are prepared to buy their home at its market price. This is where the English £leasehold caper is ever so clever.
For Sale or not For Sale?
The innocent aspiring home buyer might see a For Sale sign outside a building and believe it means what it says. After all, look at all the advertising legislation. You can’t claim this toothpaste is better than that one without evidence. So surely you couldn’t advertise a house or flat for sale if it is really a long rental? Could you?
The English £leasehold caper allows you to do so quite legally. Don’t call it a rental, just call it residential leasehold. This is how the caper/scandal starts.
In 21st century England (and Wales) even sensible professional citizens routinely manage to find themselves tenants (of a very feudalistic kind) even though they thought they were buying their own home.
They pay full market price for their flat or house. They pay for all the maintenance of their ‘home’. Nobody else pays for this. They pay to maintain the communal parts too. Nobody else pays for that. So who the heck has any greater interest or human right over the property?
Ah, but these special English home owners also pay ground rent. There’s the clue. Sssh. Ground rent was once a small sum for the use of land to develop housing. This did not suit the ‘landlords’ of freehold (we are constantly reminded they are ‘landlords’ with all this term conveys in English law). Ground rents started slowly to become real rent. So much so, that by the 21st century ‘home owners’ could pay the market price for their home and pay rather large rent as well. Loads of it. In fact far more than a tenant with a periodic tenancy would pay in a year.
This is before you consider the true horror of feudal vassal-hood: permissions (consent fees). And service charges. And the scary unholy mess that is the world of the professional leasehold managing agent.
The worst part of this caper is that none of it is furtive or unnoticed by England’s law makers. Read the many court decisions and Landlord and Tenant acts and notice how legislation, judges and lay tribunals all relish reminding leaseholders they are merely tenants and that their landlords have more human rights.
The press has been onto this caper for years. Including some politicians. Not much has improved in practice, mind. Here is an old article from the Telegraph by Ross Clark: Leasehold has us tied in chains.
Sums the situation up neatly. It was written just a few years after the big ‘reform’ of leasehold in 2002. This was not real reform. There never is effective reform. Perhaps too many law makers have their noses in the £leasehold caper trough?