The civil war over leasehold reform is hotting up inside Labour. Primary blocks to reforms – promised in the manifesto – are identified as the Treasury and Attorney General Richard Hermer…
Starmer is said to be close to a decision this week on the matter – he has to pick a side. Sources say Hermer has concerns about how reforms would interact with arcane EHRC provisions. He has been a blocker on the matter since Labour entered power. Guido can reveal there is a personal angle here…
According to public documents last year, Hermer won a ruling from a property tribunal confirming that his service charge bill of £37,142.86 for redecoration works, both internal and external, including leak repairs, was not payable for his period block of flats in London because the demands sent out were not compliant with the leasehold contract. If the freeholder still seeks to pursue the works and reissue the charges in the correct and proper way, the total bill per leaseholder would be reduced by nearly £12,000. Winning a personal tribunal battle is easy when you’re a well-heeled establishment lawyer. Ending leasehold for everyone else? Good luck with that…
Angela Rayner – who backed reform while in government – has today intervened in the debate:
“Labour made a promise to leaseholders that we would fix this injustice, but ministers are currently subjected to furious lobbying from wealthy investors trying to water this manifesto commitment down. There are those who argue we cannot act on our promise as it could risk a backlash from investors, including pension funds. It’s hardly surprising – the system works just fine for them.”
Plans for the reform bill to go ahead were blocked in December after HMT officials said a cap on ground rents could damage pension funds invested in freehold properties. Starmer’s lawyer friends have meanwhile been waging a war on the reforms in the courts. It’s all coming to head now…