The current debate within Labour is the level at which ground rents will be fixed.
This ducks the issue that ground rents are based on a ‘feudal’ system of leasehold.
In the 21st century there is no place for the existence of such a system. While this fell out of favour in the decades after the Second World War, it remerged at the end of that century and into this one as developers found that leasehold was a ready means of ensuring a continuing revenue scheme after building and selling bricks and mortar. It has been leveraged to not only continue an income stream but to grow it. There is absolutely no justification for its continuation.
In the case of buildings with multiple occupants i.e. apartment blocks, there has to be some form of common ownership. Currently, most such properties are run on a leasehold system with the leasehold owner imposing management/service charges in addition to a ground rent. Occupants have no control over the contracts issued and there have been numerous examples of profiteering by management companies. Again, there is no justification for a leasehold and ground rent system. In the case of apartment blocks the solution is simple – ownership is vested in a ‘syndicate’ of apartment owners who elect a management group which is responsible for contracting service companies. Thus, the owners have control over what happens to their property. Having experienced this arrangement in France, I can vouch that this works well.
So how do we end leasehold? Rather than ‘cap’ the ground rents, the leasehold system for domestic properties must be abolished. Business properties are different but, if converted to domestic use, then any leasehold arrangement ends.
In order to assuage leasehold owners, we should allow the lessees to buy out the lessor for a nominal amount – say £10. So it is not an appropriation of property.
It would fit with Labour philosophy to end this ‘feudal’ system. It is a simple solution which would be a popular measure putting owners in control of their own destiny and would prevent the continuous lobbying that has been seen.
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Tony Mayer is a member of North Swindon CLP and was the former Leader of the Borough Council.
All blog posts represent the views of the author alone and not necessarily those of Mainstream.
