Earlier this month, Starmer, MP for Holborn and St Pancras, weighed in on a constituent’s woes regarding a flat they live in that was struggling with construction defects.

The constituents live in a leasehold arrangement in a block of flats and Starmer blamed this plight on the leasehold system which he said was trapping people in “failing” and “unsafe” buildings.

He told Inside Housing: “My constituents cannot be left playing the cost of a broken system. Yet the reality of our leasehold system means that they could be hit with even more bills. This must not happen.”

 A false equivalence

Starmer’s comments have faced criticism, with Mark Hawthorn, CEO of Landmark Group, saying this was an incorrect link being drawn between leasehold and building quality.

“Just because all apartments with build issues are leasehold doesn’t equal all leasehold apartments have build issues,” said Mark.

“This is like saying ‘All binmen are men therefore all men are binmen’ - the logic works in one direction but not in reverse.

 “Unfortunately, politicians, many leaseholders and the media seem unable to understand this and so bandwagon jump and blame leasehold which embeds this skewed perspective into conventional wisdom.”

 Chris Gardner, CEO at Atelier, agrees and sees little evidence to suggest a connection between leasehold tenure and build quality.

 Though he conceded there may be poor build quality in early permitted development schemes, Chris said: “my instinct is that previous examples of poor-quality construction comes down to the design and build phase instead of lease considerations.”

 A wider issue

 The Labour party has been increasingly campaigning on the issue of leasehold reform.

Though the Leasehold and Freehold Reform Bill received Royal Assent earlier this year, however it has been criticised as being “piecemeal” and “hurried” with several major elements left out.

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 On balance, Neil Leich, managing director at HTB, argues the leasehold/freehold system has worked well for decades.

The real issue, he explained, is when some began to take advantage of ground rents and heighten them, after they had previously been traditionally nominal.

 
“The purpose of the Leasehold and Freehold Reform Bill is to prevent unscrupulous developers and landowners from persuading unsuspecting buyer of flats to sign very onerous leases which may leave them with a significant and potentially unaffordable ground rent and apartments which end up being unsaleable,” said Neil.

“The issue of building materials is entirely different.”

During this time, he pointed out that material and build costs have risen significantly since the pandemic which has caused quality to drop in some schemes. “But smart developers know that there is generally a flight to quality (in a soft market) and have generally maintained standards,” added Neil.
In agreement is Anthony Bodenstein, founder and managing partner at Whitehall Lending — he said it is “overly simplistic” to place construction quality on the leasehold system.

Though reforming this system would bring certain improvements, Anthony argued it would do little to enhance construction quality.

He added: “To directly address construction quality, focusing on the following areas would be more effective: stricter building regulations and standards, improved oversight and inspection and holding builders and developers accountable for defects and poor workmanship through warranties and penalties can incentivise higher quality construction.”
 
Landmark’s Mark says the issue can be hampered by post-completion complexities. Even identifying where liability lies – not with the leaseholder he points out – can be challenging, with the CEO arguing no one will want to take responsibility for such large repair bills.

 The responsible party could include the government, added Mark: “We have seen countless examples of buildings constructed from compliant materials and processes, which were signed off as complete by local authority building control reps, be retrospectively deemed unfit.
 
“Government did set up the Building Safety Fund, which is commendable, yet also taxed industry to pay for it despite the majority of housebuilders being innocent and acting honourably.”