Property: Commonhold

Baroness Kramer Excerpts

Monday 19th November 2012 Lords Chamber

[Lord Newby]

My Lords, the initial £700 million consists of a commitment by a significant number of pension funds to put in £100 million each as a starter. We are working very hard with them to scale up the programme, but it is a new programme. Pension funds have never done this kind of thing before and, not surprisingly, they want to dip their toe in the water before they immerse themselves more fully. I am very confident that they will see this initial £700 million as an effective investment, and then they will rapidly scale it up in the way that the noble Lord wishes.

[Baroness Kramer]

My Lords, I declare an interest in that I am a tenant in a flat in a mansion arrangement such as that described. Surely, moving into mansion flats is very attractive for couples or individuals when they are downsizing, which therefore frees up the whole of the housing chain. Will the Minister encourage the relevant department to look at strategies for encouraging commonhold so that this move is not discouraged by the endless confusion over freehold and leasehold? Perhaps there could be talks with Core Cities to encourage developers to follow these kinds of policies as a way to make more housing available all through the spectrum.

[Lord Newby]

The Government and I will be very happy to make that commitment. The problem with commonhold is that virtually no one knows what the word means. Since being asked this Question, over the past week I have asked a number of housebuilders and senior chartered surveyors whether they thought that it was a good idea. More than half of them said that they did not know what it was. There is a big education job to be done.

Very often the management of mansion blocks is by a management company in which each leaseholder has a share. At their best, they can work very effectively and are almost identical to commonhold, but clearly there are ways in which we can improve how those blocks are managed.