The ideal state for most politicians is surely to be a great doer of popular things. That way you get to build a legacy (on the not-always-justified assumption that said popular things are also good things) and bask in the adulation of the public in the here and now at the same time. Lovely.
Unfortunately for our hypothetical politician, the barriers to doing good and popular things are very low. Very often, therefore, there aren’t many lying around to be picked up and taken forward today.
That leaves two choices. The first is to be a far-sighted doer of good but unpopular things, facing down resistance today to deliver long-term benefits to the nation and, hopefully, secure that legacy. The second is to retreat into saying popular things, abandoning the legacy but securing a bit of adulation today. (The third is to do bad but popular things, because the consequences will play out after you’ve retired.)
Were we to map this onto the history of the Conservative Party, we might label the former the Thatcherian approach; the latter, the Johnsonian one. (The third, alas, is too universal to label so particularly.)
When Michael Gove became Housing Secretary (amongst many other things), he inherited from Robert Jenrick a rare good-but-unpopular mission of the Johnson era: delivering planning reform. The full-fat version was swiftly abandoned, supposedly a tactical retreat to get a de minimis version over the line. Yet that, recently, was scrapped as well.
Gove is, or was, perfectly capable of operating in the good-but-unpopular space, as his tenure as Education Secretary indicated. At his best, he is one of the stand-out Cabinet performers of this period of Conservative government.
But today he seems content to confine himself to the popular-but-potentially-bad end of the policy spectrum – especially on housing, abandoning the quest to address the fundamental problem of supply shortages in favour of state intervention to palliate the consequences.
For example, last summer I wrote about how the White Paper underpinning the Government’s innocuous-seeming reforms to tenants rights signally made no mention of the fact that for a long time this country actually had a highly-regulated rental sector stacked towards tenants, nor explored why successive Labour and Conservative governments spent several decades dismantling it.
Then last week Gove made an offhand comment about how he would like to abolish leasehold. He is quoted in the Times as saying:
“The fundamental thing is that leasehold is just an unfair form of property ownership. In crude terms, if you buy a flat, that should be yours. You shouldn’t be on the hook for charges which managing agents and other people can land you with.”
This would certainly be a very popular move in certain quarters: we have previously published leasehold abolitionists making that case on this site. But that doesn’t mean it would actually produce good long-term results: we have also published freeholders making the case against the commonhold system favoured by abolitionists, and highlighting the real (as opposed to ideal) impact it has apparently had in Scotland.
One might, of course, want to take the freeholders’ case with a pinch of salt, given their obvious financial stake in the debate. But logically one should apply the same seasoning to a leasehold reformer who stands to benefit from the reforms they advocate. In either case, skin in the game is grounds for scepticism but it does not, in itself, invalidate arguments either from evidence or principle.
And, putting aside for now the moral question of whether or not leasehold is inherently “unfair”, freeholders’ practical arguments about the potential pitfalls of a new system, especially for more complex buildings such as large apartment blocks, are shared by Conservative policymakers, even those well-disposed towards leasehold reform.
Beyond the complexity of the legislation and the danger of unintended consequences on things such as mortgages, one summed up the key question to me as “whether everyone really wants this responsibility”, that is, of directly administering their building; Steve Norris, the two-time Tory candidate for Mayor of London, previously argued on this site that:
“What happens in practice is that the commonholders invariably do go to a professionally-qualified managing agent to take on all these responsibilities – and thus are to all intents and purposes in exactly the same position as leaseholders.”
An analogy from the Conservative mythos would be Margaret Thatcher’s attempts to build a shareholding democracy: many people simply sold their shares, and more pertinently, today retail investors tend not to vote their shares at shareholder meetings, leaving effective control in the hands of institutional investors.
This is less of an issue in that context – the retail investors are still getting their dividends – but it is an inauspicious precedent for a model where the mass exercise of ownership responsibilities is the point.
Then there’s the free-rider problem: if a commonholder only expects to occupy a property for a limited span of time, or resides in part of a larger building unaffected by a problem impacting other properties, how can they be made to pay their fair share of the costs of work – or from using collective governance mechanisms to endlessly put off the decision altogether? What is to prevent even affected owners from putting off expensive works until a problem gets much worse?
As one person familiar with the Government’s work on this, and supportive of leasehold reform, points out:
“There are many poorly run share of freehold buildings. And in other countries there are small numbers of residents dominating buildings – look at co-ops in New York with bizarre and restrictive rules set by busybody residents.”
Many of these issues could be resolved through stringent, well-designed regulation. But as Norris points out, such regulation could – and indeed should – be enacted now (alongside other very simple measures), and doing so would greatly diminish the case for full leasehold abolition.
(This would likely be much to the dismay of some abolitionists, for whom securing the freehold, or a share of it, is the prize, but avoid thorny issues such as how to make buy-outs economical when even a modern, vastly restricted freehold stake can be on the market for almost £30,000, or whether the Crown Estate should have to divest its entire interest in land when selling it for commercial development.)
Looking at Gove’s statement again, it isn’t actually obvious that either morally right or practically feasible that a property owner “shouldn’t be on the hook for charges which managing agents and other people can land you with”, at least when those charges reflect the reasonable cost of work which ought to fall collectively on the residents of a shared building or estate.
Rather it seems to reflect the one-eyed spirit which governs the housing market, where the rights of the propertied are fiercely asserted over privatised gains (usually soaring rents and house prices) whilst responsibility for the costs are either socialised, thrust onto the unpropertied, or simply not met at all.
P.S. I wrote earlier about skin in the game, so it’s only fair I lay my own cards on the table, lest people assume my sceptical attitude is offered in bad faith.
I currently rent in London’s broken rental market, I’m probably going to buy a leasehold flat, and I was unable to even make an offer on my dream flat because a vagary of the current leasehold system, combined with the absurd price of property produced by the broader system, made it unmortgageable.
No direct profit for me from the status quo; I’m a member of the several generations which increasingly see little material reason to vote Conservative and, overwhelmingly, don’t.
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