Louie Burns, managing director of Leasehold Solutions, has called on the Queen to end her support for the UK’s leasehold system, by changing the land tenure for The Crown Estate’s huge leasehold property portfolio.
The Crown Estate’s £12 billion property portfolio includes thousands of leasehold homes for which it owns the freehold.
Burns said: “Leasehold properties have generated hundreds of millions of pounds in income for the Crown Estate – and the Queen personally – including through ground rents and the huge charges paid by leaseholders to extend their leases.
“Although there have been lots of encouraging statements from the Government about ending unfair practices in the leasehold system, The Crown Estate’s ownership of residential leasehold properties adds a veneer of respectability to our unjust and feudal leasehold system. Their refusal to let go of this leasehold cash cow validates the commitment of other freeholders to retain their ground rent portfolios too.
“Furthermore, even if the Government does follow through on its commitment to reform leasehold legislation, The Crown Estate is protected by a legal caveat that omits its ground rents from being affected by changes to the law.
“How can leasehold ever be abolished or reformed significantly if the law upholds the aristocracy’s long-held belief in their entitlement to own other people’s homes and property in perpetuity?”
The Crown was the very first freeholder in Britain; more than 950 years ago William the Conqueror declared that all land was owned by the monarch. Despite centuries of change in law and custom, the underlying ownership of The Crown still exists.
The Crown Estate is owned by the monarch for the duration of their reign. Under the terms of the Sovereign Grant Act 2011 the monarch is provided with a stable source of income from the Crown Estate’s annual net revenue. The Chancellor, Phillip Hammond, recently agreed to increase the Queen’s personal share of the Crown Estate’s income to 25% (roughly £76 million a year), with the remaining 75% paid to the Exchequer.
Burns added: “If the Crown committed to ending residential leasehold as a tenure they invested in, it would send an incredibly powerful message that proved the Government’s intentions surrounding leasehold.
“The history of leasehold reform over the last 150 years has been one that repeats itself like a feudal ‘ground hog day’. It starts with great public dissatisfaction and anger with the leasehold system, which eventually prompts politicians to take notice and introduce some legislation that tinkers around the edges of the issue, without ever bringing about the changes that are needed – namely the abolition of the leasehold system in the UK.
“It is time to change this depressing pattern of events and abolish this deeply flawed leasehold system for good. The Queen and our Government should show the way, by changing the land tenure on all leasehold properties owned by The Crown Estate and giving the tenants the option to become homeowners.”