The Bourbons would still be doing okay under English law

It has been a long time coming but it seems that at last leaseholds on new houses are to be banned. And ground rent on leasehold flats will apparently be able to be set only at peppercorn levels.

But there are still not any definite plans to help those already affected by the blatant rent extraction of selling what would and should be newly built freehold homes as leasehold.

As many of the freehold land owners seem to reside in tax havens, perhaps a start could be made by mandating that any rent payable to a company incorporated anywhere except the UK or the EU would not have the force of English law. And their agents – because they always have agents – should be required to disclose the details and addresses of landowners. So the shady companies of which, anecdotally, it seems there are quite a few, might just fade away. The others would have to declare themselves.

Indeed Property ownership in tax havens seems so widespread that even articles in the ‘Sunday Times’ earlier this month were highlighting how tenants resented exporting their rents and calling for realistic taxation of commercial property companies.

Once company names are revealed then it is surely up to the builders who sold on these streams of rents to the professional rent extractors, to themselves unwind the deal.

If the builders do not find they have the moral fibre to do so then, although retrospective laws are not usually to be encouraged, arbitrary doubling of ground rents and spurious fees for alterations are so completely contrary to natural justice, that I think a retrospective law would be justified. Such leasehold trickery certainly brings the law into disrepute and has no right to expect the legal system to be available for its enforcement.

Indeed it is at least arguable whether the agreements were freely and knowingly entered into in the first place and some conveyancing solicitors will surely end up being sued.

This deviousness only goes to further demonstrate the perversity in UK jurisdictions of treating the tenant and landlord relationship as equal.
On the Continent, whilst it is true that the codified Napoleonic legal system was based on Roman church law, at least it was modified by the French Revolution. They didn’t want the Bourbons back and ensured that the rent extractors did not get it all their own way. Consequently Continental laws have clear tenants rights and obligations for landlords and recognise that the landowners cannot be allowed the untrammelled power that is their natural advantage.

That revolution is long overdue for English law.

 

Deceit NOT Ignorance

I feel I must draw attention to the blog by Simon Wren Lewis on Monday this week. It is well worth a read throughout. But it also contains this withering indictment of ‘our’ government. It is a devastating comment, particularly for an Oxford academic and a – hardly revolutionary – ex civil servant.

“Some may disapprove of the language I use here. Should a normally sober Oxford macroeconomist talk about political parties deliberately deceiving the electorate? It is not a view I have adopted lightly, but when a Chancellor repeatedly argues that public spending must be cut to meet deficit targets at the same time as reducing inheritance or corporation tax, or a Prime Minister continually repeats the lie that immigration reduces access to public services, what other conclusion can you come to? They could get away with this deceit because academic economists (the majority of whom know that austerity would reduce output, and that immigration improves the public finances) are largely ignored by the media.”

Which is something the BBC particularly, and indeed anyone who ever again votes Conservative will have to explain.

Brexit – Reasons for Resentment

Following the suggestions for the reasons to remain a summary of the reasons to leave the EU might also be useful, though I would suggest there are not, in fact, any compelling reasons to leave, and so I prefer reasons for resentment.

They seem to comprise three basic ideas: the democratic deficit, too much red tape and too much immigration.

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Los Lobos -‘The Wolves’

The Tories have recently come out with two ‘ideas’ that involve financialisation packaged as ‘social benefit.’  These two bits of financial engineering will, no doubt, increase private debt and encourage more bubbling of housing. The first is their intention to build more council housing that is paid for by the future sale of the houses based on anticipation of their increase in value.  The second is the funding of social care through the use of assets above £100,000.  For most people this will be in the form of a house which will have to be re-mortgaged via a ‘financial product’ (hold crucifixes aloft), then, when the owner has died, the family or relatives will have to sell the house and pay the costs with interest.  In short:  more wealth extraction from the community.  Given present household debt is at 130% of GDP this does not look good.

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The End of the Home Owner Dream – New Homes for Rent Only.

When I arrived in the UK in 1981 housing was abundant and cheap. I was able to purchase a house well within a year and there were many available starting at about 75% of my annual salary (£6,500 as a Post Doc in the University of Sheffield) but I purchased one on an 80% mortgage at about 1.5 times annual salary (£10,000). Admittedly this was in South Yorkshire where property prices were below the national average. Thirty five years later the situation is markedly different. It would not be over dramatic to say there is a housing crisis.

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Mental Health Awareness Week

This week is Mental Health Awareness Week . What an excellent time for the Conservatives to pledge an extra 10,000 mental health staff by 2020 – it’s surely just minor carelessness that they’ve managed to lose 4,800 mental health staff on their current watch so far.

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The Litany and Lure of the Lease

The appalling scandal of newly built houses being sold as leasehold by Britain’s six biggest housebuilders (and where the ground rent can double every 10 years – just because they can) is by now well documented. In fact leasehold properties are now thought to make up over 40% of all new homes.

This is rent extraction at its worst – often just plain extortion.

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