Property mogul Vincent Tchenguiz says that proposed leasehold reform will damage the property market, according to a recent press report.
In recent years the so-called ground rent scandal under which large numbers of new homes have been sold on a leasehold basis – with escalating ground rents – has become a hot political issue.
As a result, in late 2017, then Communities Secretary Sajid Javid announced plans to ban leaseholds for future new build homes, introduce measures to make it cheaper and easier for existing leaseholders to buy out their freehold and support those who face onerous leasehold terms.
However, the Financial Times reports that Tchenguiz is now lobbying against these proposals on the basis that they will cause “unintended detrimental consequences to the entire property market.” He is reported to have said that these will include higher property prices and losses to pension funds as well as poor future property management. He adds that there are “grounds to keep the freehold-leasehold system working.”
It is reported elsewhere that the Tchenguiz Family Trust’s Consensus Business Group owns a portfolio of around 300,000 residential ground rents worth an estimated £4bn.
At first glance this might seem like a classic ‘turkeys not voting for Christmas’ type situation. It could also be said that Tchenguiz is helpfully pointing out the blindingly obvious to politicians – that popular political actions can have much less popular consequences further down the line.