Harry Scoffin is a reporter at Leasehold Knowledge Partnership but writes in a personal capacity.
Here’s a message for Rishi Sunak and Liz Truss: failure to expand the property-owning democracy by overcoming the ghastly cartel of developers will banish the self-styled party of homeownership to opposition.
“To Conservatism… the success and the stability of a civilisation depend upon the widest possible extension amongst its citizens of the private ownership of property”. So wrote Noel Skelton, Scots Tory thinker, lawyer, journalist, and parliamentarian, in 1924.
Propounded in post-WWI Britain, when the disconnect between political rights and citizens’ lack of economic capital was making socialism seductive, Skelton’s “property-owning democracy” went on to become a rallying cry for successive Tory premiers from Anthony Eden to Harold Macmillan, Alec Douglas-Home and, later, Margaret Thatcher.
The link between work and reward has again snapped. According to the IFS, in 20 years, the number of middle-income homeowners aged 25 to 34 has gone from 65 per cent to just 27 per cent. Without major course correction from the party of capitalism, a lack of capital will once again become the biggest determinant of how people vote.
Despite paying premium prices for a home of their own, leasehold law turns flat owners into tenants, denying them land capital as well as the autonomy and control associated with home ownership.
The English legal system is rightly envied, but successive governments’ refusal to scrap leasehold, a remnant of serfdom and manorialism, baffles those in Scotland and the rest of the world, where predatory landlordism is abhorred and commonhold systems flourish.
Expanding the property-owning democracy therefore means phasing out leasehold fiefdoms in a mass shift to commonhold for bricks-and-mortar flat ownership.
I represent a generation of young adults who have finished education and look forward to building a life for ourselves, our families and our communities. Homeownership is key to that.
But purchasing a modest flat near work – traditionally the first rung on the ladder – is anything but an investment in property. Facing a life of servitude to extortionate leasehold service charges, we feel resigned to being rental tenants in flat shares, or staying at home and saving for a house.
As the next generation with growing electoral clout, we see a ruling party seduced by donations from property insiders failing to enact common-sense reforms that, consulted on from 2017, would level up homeownership.
Having witnessed the shocking reality of leasehold exposed by the post-Grenfell building safety crisis, millennials like myself now realise it’s a scam. One merely acquires a time-limited license to occupy a few hundred cubic metres of air encased in concrete or steel. The leaseholder doesn’t own a brick, even after they’ve redeemed the mortgage.
No wonder flat sales have plummeted 60 per cent in three years. Once consumers saw the risks of “owning” leasehold flats, they no longer felt the urge to buy. Meanwhile, the gap between house and flat prices is now wider than at any point since 1995.
Contrast England with Scotland, which abolished feudal tenure in 2000; 40 per cent of the stock there constitutes flats. In England, the percentage languishes at just under 25 per cent. Indeed, we have the second-lowest proportion of flats as any country in Europe.
As a reporter covering this scandal since 2018, I’ve seen how leasehold turns people’s homes into a tradeable investment asset for offshore owners, in an unregulated sector resembling a criminal enterprise. Landowners offload their freeholds to investors who beef up their cash flow streams through lucrative ground rents and service charges.
Meanwhile at home, in a block with no cladding to replace nor amenities like a pool or garden, but plenty of leaks, broken lifts and grimy windows, my mother feels helpless with service charges rising £9,273.44 (43 per cent) in five years. Her freeholder lives in Monaco.
Something must be done.
Throughout history, free-thinking Tories have recognised leasehold prevents people from living honestly and autonomously. Leasehold abolition is not only morally correct and electorally advantageous, but upholds Conservativism’s emphasis on the civilising and liberating influence of homeownership.
Lord Randolph Churchill decried leasehold in the 1880s for empowering landowners to “exercise the most despotic power over every individual who reside on his property”; Thatcher championed leasehold enfranchisement and commonhold in an intended sequel to her Right to Buy council-house revolution.
Thatcher understood leasehold restricts citizens’ rights in a way that is now indefensible. Indeed, it was originally used by the medieval aristocracy to enjoy perpetual land ownership by allowing serfs to occupy their premises in return for labour (and, later, financial contributions to raise armies)
Today, leasehold means sinking your savings into the deposit in the vain hope of making it onto the housing ladder, taking on a huge debt with a mortgage, only to become a glorified tenant. But unlike renting, this time you’re the one saddled with the maintenance costs which you have no control over.
Now leasehold has been exposed, its growing unpopularity threatens not only the Conservative Party, but our economy and society by hampering urban development, productivity and social mobility.
To create a truly property-owning democracy, then, we must enrich our cities with commonhold castles, not feudal ones, so flat owners’ homes in this country are truly their own and consumer confidence returns.
Densifying our cities with commonhold blocks would also avoid a Nimbyist counterrevolution and address urban sprawl, which is bad for the environment.
Leasehold and commonhold reform appeals to left, right and centre of the Conservative Party. It’s also one of the most transformative and realisable policy agendas capable of holding together the 2019 voter coalition.
Only those who defend rentier or crony capitalism, and want to see the self-styled party of homeownership suffer a 1997-style defeat, will continue paying lip service.
Don’t let leasehold abolition be low-hanging fruit for a reinvigorated Labour Party in 2024. They’re already eyeing it…