During a debate on the Leasehold and Freehold Reform Bill on 22nd April 2024, the Bishop of Derby, on behalf of the Bishop of Manchester, spoke in opposition to clause 28 standing part of the bill, as it would have adverse affects on great estate areas such as the Hyde Park Estate:
The Lord Bishop of Derby: My Lords, I will speak in support of my right reverend friend the Bishop of Manchester, who is unable to be in his place today and who has asked me to speak to his opposition that Clause 28 stand part of the Bill. This is linked to a similar stand-part debate, in the name of my right reverend friend, relating to Clause 47, to be debated later in Committee.
I declare my interest as a beneficiary, as is my diocese, of the Church Commissioners. I thank the Minister for her engagement with the charities affected by the legislation so far: the Church Commissioners, John Lyon’s Charity, Portal Trust, Campden Charities, Merchant Taylors’ Boone’s Charity, Dulwich Estate and the London Diocesan Fund. I hope she will continue to engage with my right reverend friend to find an amicable solution.
The Church Commissioners for England are the freeholders of the Hyde Park Estate. If we are looking back a long way, the Church can look back longer than most. The Church has had a long relationship with that part of London, starting in 1550 when the Bishop of London was granted the manor. The first leases were granted in 1795, and the Ecclesiastical Commissioners became responsible for the estate in 1868. Like the other charities mentioned, the Church Commissioners have long relationships with their estate. The money generated from the estate beyond the local is used for the betterment of the whole of our society, by the levelling up of communities and the lowest income parishes across the country, including in the diocese of Derby.
Like the other charity freeholders of large estates, the Church Commissioners manage the whole area, focusing not only on the residential properties themselves but on the whole environment, for those who live in, work on and visit the area. Their freehold ownership includes approximately 100 commercial units on the estate, where independent cafés, specialist boutiques and restaurants are mixed alongside amenities for local residents. This by no means affects the Church Commissioners alone; other large freeholders across London and beyond use their mixed freeholdings to ensure that areas have what local residents need, such as a dry cleaners, a pub, a hardware store—I could go on.
I thank the Minister for her letter to my right reverend friend the Bishop of Manchester, received today. However, concerns remain that Clause 28 threatens the ability of freeholders in large estate areas to ensure mixed areas that have all the amenities that people need. If the threshold for collective enfranchisement and the right to manage claims is lowered so that more mixed blocks can initiate a claim, there is a risk of the degeneration of these areas. There is no guarantee that newly enfranchised blocks will have the wherewithal or even the desire to maintain the make-up of the estate area. Leaseholders may not even live permanently in the area, may be foreign-owned companies or may have no active stake in the community. What need would these companies or corporations have to ensure the maintenance of a community? My right reverend friend the Bishop of Manchester said at Second Reading of this Bill that:
“We would lose all the shops that really matter to those who live perhaps not just in that block, but”—[Official Report, 27/3/24; col. 737.]
in the locality.
The amendment of the noble Lord, Lord Thurlow, which would mean that right to manage and collective enfranchisement rule changes would apply only where 50% of the leaseholders are permanent residents in a block, would certainly be a step in the right direction. At least there would be a guarantee that those managing mixed blocks would have an active stake in maintaining community resources, including shops. Could the Minister tell us whether the Government could make proposals to ensure that great estate areas, such as the Hyde Park Estate and others, are not adversely affected? Nobody wants to see local shops, amenities and community hubs closing as an unintended consequence of the Bill.
Extracts from the speeches that followed:
Lord Thurlow (CB): My Lords, I turn to my Amendment 18 in this group. I begin by declaring my interests as both the owner of two buy-to-let investment flats and the occupier of a flat, all on leases. I stand to benefit under the Bill in both situations, which is quite patently wrong.
I thank the right reverend Prelate the Bishop of Derby for articulating my amendment with greater ability than I can. I want to turn specifically to mixed-use buildings and the proposal to move from a 25% threshold for enfranchisement to 50%, and build on the comments of the noble Lord, Lord Sandhurst. Mine is a straightforward proposal: simply that lessees who are not occupiers living there as their primary residence should not benefit from the great wealth transfer that is going to take place through the enfranchisement process. It cannot be an intended consequence of the Bill.
My amendment requires that at least 50% of leaseholders should satisfy the residence occupancy condition for any collective enfranchisement to apply. I remind the Committee that I am thinking of mixed-use buildings. A very complex management expertise is required in looking after mixed-use buildings; the skills are not the same for commercial property as for residential property, and the scope for mistakes and delay is huge. The potential to improve and curate an environment through single ownership of an expansive area has been very clearly described. To expect such behaviour to continue responsibly is almost impossible under the Bill as it stands.
Lord Truscott (Non-Afl): I support His Majesty’s Government’s Clause 28, which seeks to raise the non- residential limit on collective enfranchisement claims from 25% to 50%, as mentioned by the noble Baroness, Lady Taylor of Stevenage. I consequentially oppose the proposal of the right reverend Prelate the Bishop of Manchester and the noble Lord, Lord Moylan, to vote against Clause 28.
Your Lordships have heard how giving more say to leaseholders in mixed blocks of residential and commercial units would be a bad idea and negatively impact on investment and the effective running of these blocks. It has been said that reform would only help some foreign leaseholders and investors and would result in fewer homes being built. That is far from the case. I have lived in two blocks of mixed developments: one was controlled by a residents’ right-to-manage company, with a NatWest bank in the basement, and another contained a number of commercial units and was 100% controlled by the freeholder. I can say categorically that the right-to-manage block was run better and with cheaper service charges. The freeholder-run block exploited the residents, cross-subsidising the commercial units at their expense and giving them no effective say over how the block was run. I point out to the noble Earl, Lord Lytton, that the difference was that the RTM block was actually run by the residents, who were managing their own money, whereas the freeholder block was run by a managing company and the freeholders were profligate with the use of residents’ cash.
(…)
I am aware of a major lobbying effort by the great estates to protect their feudal privileges built up over hundreds of years—I was invited to dinner by one, but I did not go. Following the contribution of the right reverend Prelate the Bishop of Derby, I refer to the proposal in the name of the right reverend Prelate the Bishop of Manchester, who was refreshingly frank at Second Reading. He said that the system could be described as “feudal” and that some of the Church property he dealt with dated back to the 11th century. The property portfolio of the Church of England is valued at £2 billion—it is a business. It has assets of at least £6.7 billion. As we all know, the Church of England does a lot of work with charities and works with the poor, but some have already questioned whether its 105,000 acres of land could be better used, in part, to provide the social housing so badly needed by the needy and homeless.
With the great estates, the story is also about retaining their wealth, not about losing it. I have no problem with that, I just do not think that it should be at the expense of leaseholders. They need to move with the times; the old ways of fleecing leaseholders are increasingly untenable.
The Earl of Lytton (Con): My Lords, I will speak to this group, as the noble Lord, Lord Truscott, mentioned my name, although I have not yet spoken. He represents one viewpoint and the noble Lords, Lord Thurlow and Lord Sandhurst, and the right reverend Prelate the Bishop of Manchester represent another. They are often portrayed as being mutually exclusive but, in property terms, that is not necessarily the case. Clearly, there are perfectly good managers who look after not only their residential tenants but their commercial tenants, and there are some are rotten managers. Some are good corporates while others are rotten—some are good resident management operations while others are pretty poor—so it is very difficult to make a standard rule for them all.
If one looks at the large urban estates across London, it is evident that there is a clear sense of purpose in trying to preserve the value, appearance and general amenity represented by the running of that estate. That inevitably comes at a cost, but I hope that that helps not only the commercial activities but the amenity of the residents.
Baroness Scott of Bybrook (Con, DLUHC): I thank the right reverend Prelate the Bishop of Derby for speaking on behalf of the right reverend Prelate the Bishop of Manchester, with whom I have had a number of meetings about this issue. I am happy if the right reverend Prelate takes back the fact that I will continue that discussion if the right reverend Prelate the Bishop of Manchester so wishes.
The Church of England in Parliament 
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