Leading Article: Belgravia going freehold

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The Independent Online
LIKEABLE man though he clearly is, the Duke of Westminster has probably not gained much sympathy by resigning from the Conservative Party, of whose Chester branch he had been president for 16 years. His gesture of disgust was prompted by the Government's plans to change leasehold law in ways that, to his mind, infringe two basic democratic principles: the right of a private citizen to own and enjoy private property, and the right to uphold contracts freely entered into.

The legislation is the Housing and Urban Development Bill, currently passing briskly through Parliament. It will (with some hotly disputed exceptions) extend to tenants of flats with a lease of 21 years or longer the right to buy the freehold. In 1967 and 1974, leaseholders of houses with up to certain rateable values were given the same right. The new Bill will remove the upper limit, 'enfranchising' those in high-value houses.

The Duke's problem is that he is generally cited as Britain's richest man, a status that inhibits sympathy. His is a classic case of inherited wealth: a shrewd forebear, Sir Thomas Grosvenor, was given 500 acres of poor farmland in 1677 on marrying Mary Davies, aged 12. No doubt thanks largely to good management, that manor became Pimlico, Belgravia and Mayfair (the Pimlico section was sold in 1953).

The new legislation is not confiscatory, since leaseholders will have to pay to acquire the freehold. But the duke believes the complex formula proposed for calculating the price is unfair to landlords, and that some leaseholders will enjoy windfall gains. Whether he is right or not, he is on stronger ground in challenging the principle of the Bill: that the right of tenants to own leasehold properties is sufficiently in the public interest to over-ride the rights of landlords.

If the Bill were intended primarily to protect tenants from bad landlords, it would be fair to ask whether this goal could not be achieved by means that did not penalise good landlords. One justification for it is indeed that the legal rights of many tenants have been abused by landlords or managing agents: in one survey, almost a quarter had considered taking legal action. Notionally, leaseholders' rights were greatly strengthened by the Landlord and Tenant Act 1987. In reality, few tenants knew about it, and the cost and stress of taking legal action further reduced the Act's value.

The real raison d'etre for the Bill is not so much to protect leaseholders from bad landlords and the effects of shrinking leases as, in the words of Sir George Young, the housing minister, to form 'an essential part of our policy in extending home ownership'. Yet the 1967 and 1974 leasehold Acts were initiated by Labour, and it is not surprising that Lord Tebbit has described the new Bill as a piece of socialist intervention in the market. The Duke of Westminster believes it will have the further effect of damaging the appearance of prestigious tracts of London by reducing the standard of estate management. There is force in all these arguments, although the marmoreal uniformity of Belgravia will not be to every taste. He and other conscientious landlords deserve more sympathy than they are likely to receive. But the Bill's capacity to transform more than one million lives for the better will make its passage deservedly irresistible.

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