When you buy a London flat, you're not really becoming an owner

The weird reality of leaseholds.

Instead of buying a property, how about renting one? Only this will be a rental deal with a difference: I am going to make you sign a 100-year contract and demand that you pay the vast majority of the rent upfront. If any repairs need doing, of course I’ll arrange them for you. But I’m going to send you the bill. 

You want to argue? If you don’t pay, I am going to rip up the rental contract and you are going to lose all that money you
paid upfront.

Does that sound appealing? It is really just another way of describing leasehold, the form of property "ownership" which is almost universal in apartment buildings in England and yet hardly exists elsewhere on Earth. London boasts some of the world’s highest property prices, and yet many buyers are only vaguely aware that when they buy a flat — whether for £200,000 or £20m — they are not really becoming property owners at all. "But I am the owner," one buyer recently protested to me after seeing himself described as a "tenant" in his deeds. Oh no you’re not, I had to tell him. You’ve got 125 years of happy renting ahead of you. 

Leasehold is the basis of some of the largest private fortunes in Britain. The Duke of Westminster would be just another hard-up English aristocrat had his forbears sold off the freeholds of the properties built on their estate 200 years ago. Selling leases instead enabled the Grosvenor family to take money from the sales and yet continue to retain an interest in hundreds of properties in a prime central London residential district.

Yet leasehold seems increasingly incongruous with the present-day London property market. Billionaires, the representatives of global capitalism, can find themselves the tenants of English aristocrats, or quite possibly the tenants of a fly-by-night company operating from above a chip shop in north London. Freeholds are sometimes worth much less than the value of individual flats, with the result they can end up in the hands of small-time property barons with devious ways of squeezing money from their tenants.

Like all landlord-tenant relationships, that between freeholder and leaseholder is apt to go horribly wrong. And it isn’t just a case of people on the lowest rung of home ownership who find themselves being exploited by unscrupulous landlords. You can find hornets’ nests of anger and resentment in some of the poshest addresses in London.

In one case in Knightsbridge, flat-owners were each sent a demand for £14,000 for "major works" to the roof. If you totted up the contributions which had been asked of all leaseholders, it came to an astronomical sum way beyond anything which might reasonably have been spent on repairing a roof. What the money was really for, the leaseholders later found out, was building an extra two flats on the roof — which the freeholder was then going to sell entirely for his own benefit.

Most disputes between leaseholders and freeholders are for the same reason: excessive service charges. It is all too easy for freeholders to jack up the cost of repairs: add 15 per cent here and 20 per cent there. In some cases the costs end up being ridiculous: the tenant of a one-bedroom flat in Oxford ended up paying £9,300 a year. The value of the flat, as a result of the service charges, had fallen to just £15,000.

But in most cases of excessive charging, fees are pushed up to a level at which the leaseholder might groan yet not be quite moved to complain. Typical is the block of flats where leaseholders found 33 per cent was being added to their building insurance. How would you know you were being overcharged, without shopping around for insurance yourself?

Landlords are not supposed to exploit their leaseholders, and there are provisions in law to prevent them doing so. Leasehold Valuation Tribunals exist in order to settle disputes between the two parties. But in practice few leaseholders get round to challenging excessive charges; indeed, the process of doing so is itself expensive. Most quietly pay up or sell up, knowing that if they kick up a stink it will make it more difficult for them to sell their property.

The Leasehold and Commonhold Reform Act 2002 seemed initially to ring the death knell for leasehold. It enhanced powers that leaseholders already enjoyed: to exercise their collective right to buy the freehold of the buildings in which their flats are situated. In addition, it created a new form of tenure — commonhold — much more like the condominiums common in the US and many other countries. Under commonhold, owners of individual flats would jointly own the entire building. A decade on from the Act, there are still only a dozen commonhold developments in England.

Nor has there been any great uptake of enhanced powers of ‘enfranchisement’ — a term used to describe the joint purchase of a freehold by the leaseholders. One of the reasons for this is that it can take an extraordinary effort to gather the leaseholders and persuade them to agree to exercise their rights. The law requires at least 50 per cent of leaseholders to agree to the action. Knocking on doors is rarely successful: in a typical London block a large number of the leaseholders do not live in their flats. To contact them it may be necessary to trawl through the Land Registry. And even then it is quite likely that you will find flats that are owned by companies registered abroad.

Leaseholders who want to buy their way out of the system have to be prepared for a long and expensive battle: under the rules, leaseholders are liable to pay the landlord’s legal costs as well as their own. In one recent case in east London leaseholders succeeded in buying their freehold for £404,000, after suffering years of exaggerated service charges. The overcharging wasn’t quite finished, though: they found themselves having to pay another £169,000 in legal costs.

It is inertia that keeps leasehold going. Perhaps the London property boom will carry on for so long that buyers won’t worry too much about it. When you expect to make tens if not hundreds of thousands of pounds on the value of your lease, you might not care about a service charge that that is hundreds of pounds too high. It might be a different story if prices began to slide and owners were suddenly faced with the prospect of losing money. They might then begin to see themselves for what they really are: just like other tenants, paying through the nose to keep their landlord in fine wine.

This piece first appeared on Spears magazine.

A hotel in Mayfair. Photograph: Getty Images

Ross Clark is a writer for Spear's Magazine

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Moonshots for the Earth: are there technological fixes for climate change?

As the world gathers in Paris for the latest UN climate change conference, are there technological solutions for global warming? And where are the tech-utopians working to find them?

This article originally appeared in The Long + Short

At the end of August, as the northern hemisphere’s hottest summer on record drew to a close, a group of inventors, designers and engineers assembled in a grand stone castle an hour’s drive west of Paris. Château de Millemont was hosting a five-week ‘innovation camp’ for the pioneers behind 12 new projects, chosen for their contribution to achieving a world without fossil fuels. POC21 (Proof of Concept) was set up as an active, grassroots foil to cop 21, the 21st UN Climate Change conference in Paris, which begins at the end of November.

“Global emissions have doubled since the first UN climate summit in 1995,” says the POC21 video, amid images of environmental catastrophe, so “Let’s move from talking to building a better tomorrow.” The objective was to create workable open-source technology in the fields of energy, food and waste – life, basically.

Products that made it to the final 12 included a pedal tractor, a smartphone-controlled greenhouse and an antibacterial water filter. Daniel Connell, one of the chosen inventors, travelled to Paris from the UK for the event. He was picked because he’d created an impressive cost- and resource-efficient wind turbine design. You can make it for about £20 out of aluminium sheets, a bike wheel, rivets, washers and nuts and bolts.

“It’s entirely built from recycled or upcycled materials, and can be assembled by anybody with basic hand or power tools,” says Dominik Wind, core organiser of POC21. “While this makes his design a perfect fit for the people that need it most (the poor, the marginalised around the globe), it’s also the perfect design to build upon: it’s the basis to start from with more customised, possibly also more complex and more expensive iterations.”

Connell has been creating prototype technologies and tutorials for solar and wind designs while moving around the world over the last 10 years, traversing Canada, France, India and Spain. A 3D animator by trade, he is self-taught – he describes the Solar Flower, a DIY solar energy collector he created, as “my degree” – and set out to make an existing design for a wind turbine cheap and easy for people to use. “Technically, it could be $5 if you just pay for the rivets and get plates and a bike wheel for free,” he said.

A seasoned squatter, Connell made his project possible by sifting through scrap heaps, fixing up bikes and living on a few pounds a day so he wouldn’t have to work and could devote his time to the wind turbine. Connell’s ethos is inspired by the self-sufficient communities he grew up in as a child in New Zealand, and that country’s culture of ingenuity and making stuff. Since POC21, his product has improved and he’s showing it to students, retirees and other people who want to get off grid via workshops.

Connell is one of a number of green inventors working to ease the world’s transition to climate change. As wildfires spread, countries sink, species go extinct, floods and drought increase, seas rise, storms devastate, glaciers melt, crops fail, pollution decreases life expectancy and the potential for conflict grows, eyes look to the inventors, geniuses and entrepreneurs who surely can figure out a way of saving the planet.

When Pope Francis, in an unprecedented speech earlier this year, rejected market solutions for climate change, attacked “unfettered capitalism” and made a forceful moral plea, it raised the question: if individual behavioural changes aren’t realistic or enough, can’t technology provide a route out of the problem? Where is that technology? And is ‘techno-utopianism’ realistic in the context of the climate crisis?

Major companies are already divesting from fossil fuels – most recently the Rockefeller Foundation, the Church of England and Norway’s £900bn sovereign wealth fund – as burnable reserves run out and the climate change threat becomes more apparent; but local attention is also turning to how to transition to a greener world.

In the bowels of an east London theatre on a foggy Sunday afternoon a month or so after POC21, a panel discusses whether Hackney Council should divest its pensions away from fossil fuels. “There is an energy transition happening,” says Carbon Tracker’s Luke Sussams. Dr David McCoy, an expert in global public health, says, “We face an existential threat in terms of eco collapse… My 14-year-old daughter’s future does not look good.” He explains how global warming will affect disease patterns and prompt conflict over scarce resources. Yet there is some optimism about green developments in electric cars, renewable energies and Tesla’s new battery technology.

Bill McKibben, the campaigner and author who brought global warming to public consciousness with his 1989 book The End of Nature, and more recently the founder of international pressure group, is positive and excited about innovation in the green world. “The price of a solar panel dropped 75 per cent in the last six years,” he said, speaking from his home in Vermont. “The world’s engineers are doing their job; and doing it extraordinarily well.”

The move to renewable energy is under way. An Apollo-style research programme to make renewable energy cheaper than fossil fuels recently won the backing of Sir David Attenborough and high-profile businesspeople, politicians and economists. Even Bank of England governor, Mark Carney, has warned that the “vast majority of reserves are unburnable” if global temperature rises are to be limited to below 2C. But others think that it’s not enough, and consider geoengineering to be the grand techno-fix.

First presented as a big-idea solution to climate change in the 1960s, geoengineering proposals range from the seemingly fantastical – brightening the clouds; stirring the seas to change their temperature and cool the Earth; turning the ocean into a gigantic bubble bath to reflect the sun; covering the deserts in mirrors and sending parasols into space; mimicking the cooling effects of volcanic eruptions like Mount Pinatubo – to the more mundane: removing carbon from atmosphere and storing it somewhere else.

Although a number of scientists and researchers – including the Royal Society, which held a geoengineering ‘retreat’ in Buckinghamshire in 2011 – think geoengineering is an option worth considering, no one is actually doing it yet. Well, apart from Russ George, the businessman, entrepreneur and “DIY rogue geo-vigilante” who dumped 100 tonnes of iron sulphate into the Pacific ocean, triggering a 10,000-sq-km plankton bloom (plankton blooms suck carbon out of the atmosphere). Though the efficacy of his actions is still unclear, George was criticised for eco-terrorism, and was said to have contravened UN conventions.

The big problem with DIY geoengineering, and any geoengineering for that matter, is its potential for danger: we don’t know what would happen. David Keith, a professor of engineering at Harvard who developed a giant air-sucking wall to capture carbon, told the New Yorker’s Michael Specter, “It is hyperbolic to say this, but no less true: when you start to reflect light away from the planet, you can easily imagine a chain of events that would extinguish life on Earth.”

On the other hand, carbon dioxide removal (CDR) doesn’t seem, on the face of it, like playing god with our weather systems or trying, fruitlessly, to find a dimmer switch for the sun. A company called Skyonics claims its Skymine process can capture harmful pollutants and turn them into marketable products such as baking soda and bleach.

But to what extent can sucking carbon out of the air work? Sabine Mathesius, a climate modeller at the Potsdam Institute for Climate Impact Research, wanted to see what CDR could achieve if five gigatons (an enormous, hypothetical amount) of carbon dioxide was removed from the atmosphere each year. Simulations found that the impact of this level of removal would not be significant at all, especially in terms of protecting the ocean, which is acidified by human-produced CO2.

“In the beginning I was surprised,” she said. “Like many people I also hoped that geoengineering could be a way to undo the harm we did with our CO2 emissions. But if you see how much CO2 we can get out of the atmosphere with the current technologies and what we are expected to emit in a business-as-usual scenario, you can already see that the impact of CO2 removal cannot be that big.”

CDR could be used as a supporting measure to avoid the worst scenario if emissions are reduced at the same time, Mathesius concluded. “What is not possible is just emitting the CO2 as usual and further expanding our industries and then using CDR to get the CO2 out of the atmosphere. Reducing emissions is the cheapest way to keep the CO2 levels low; and also the easiest way.” More promising technologies, such as bioenergy with carbon capture or artificial trees, would also require fertile land or would cost astronomic amounts, Mathesius says. So where then would she place her hope in terms of a techno-fix to solve climate change? “Clean energy to make it easier for people to emit less CO2.”

Carbon capture and storage gets short shrift from McKibben. “If you step back and think about it for a minute, it’s silly,” he says. “You can do it, obviously, but can you do it at a cost that makes any kind of sense? You can’t. No one’s been able to yet. You’re way better off just building the windmills in the first place. All it is is a solution designed to try and appease the power of the coal industry and offer them some kind of future.”

Those looking into this techno-fix are quite clear that solar radiation management or carbon capture is no substitute for reducing carbon emissions anyway. Bodies such as the Solar Radiation Management Governance Initiative (SRMGI) and the Royal Society contain wary caveats, that geoengineering is not an alternative to reducing carbon consumption. McKibben calls them an “absurd set of ideas where people throw up their hands and say, ‘There’s no way we can solve this problem, so instead let’s fill the atmosphere with sulphur’.”

On the last day of April, Elon Musk entered the stage at his Tesla Design Centre in Hawthorne, California to thumping dubstep, whoops and ripples of applause. The billionaire business magnate nodded to the crowd of adoring fans and set out his vision for a complete transformation of how the world works. His 20-minute speech explained how a new invention – the Powerwall battery – would advance a complete overhaul of the world’s energy infrastructure. “This is how it is today… it sucks,” Musk began, gesturing to slides depicting factories belching out smoke.

The solution to getting from fossil fuel hell to a renewable-powered future, he explained, was his new product. Because “existing batteries suck,” he had developed the Tesla Powerwall: a wall-mounted, household battery on sale for $3,500 (£2,300). His statements were punctuated by cheers and screams from the crowd, especially when he revealed that the whole event had been powered by solar and Powerwall.

Musk believes that transitioning to electric cars and solar energy will contain the worst effects of climate change. His electric cars are improving all the time; the mass-market model is expected to be ready before 2020. Tesla open-sourced all its patents and technology in 2014 to encourage other people to advance the electric vehicle industry; and lots of major names in the automobile world have followed with designs for electric cars. “We need the entire automotive industry to remake, and quickly,” said McKibben. Musk has also proposed the Hyperloop, a new transport system he describes as “a cross between Concorde, a railgun and a hockey table”.

Advances in batteries radically change the picture of renewable energy, electric cars and transport systems; and important improvements are happening. At the end of October 2015, a group of Cambridge scientists made a major breakthrough with a rechargeable super-battery that can hold five times more energy as those we’re used to and can power a car from London to Edinburgh on a single charge.

Improved battery storage will change everything for green energy enthusiasts like Daniel Connell in the next few years. “This is why, apart from [a lack of] political will, we don’t have renewable energy: because storage levels don’t reach grid level. But before the end of the decade they will,” he explains.

One of the projects chosen for POC21, the French eco-castle retreat, was a design by a team from Berlin. Sunzilla, a diesel generator without diesel, fuelled by the sun, can be assembled by anyone. Germany is leading the way in the energy revolution with its energiewende, driven by Green politicians and the support of local citizens. In 2014, just over a quarter of German energy came from renewable sources; in 2050, the goal is 80 per cent. The German Green Party politician Ralf Fücks, author of a new book called Green Growth, Smart Growth, is a techno-optimist with faith in society’s ability to find a way out of the ecological crisis, although he cautions against the hubris of large-scale techno-fixes. Investment in green technologies and renewable energies are more realistic, he writes, than carbon capture and storage.

Fücks speak slowly, carefully and with an obvious delight in the natural world. “Spider silk is a wonderful substance,” he says at one point. “It’s more flexible than rubber and more solid than steel and we now have the skills to discover [its] molecular composition.” He cites the smooth skin of the shark and the self-cleaning surface of the lotus blossom as examples of biological productivity we can learn from and use for our own purposes, while decreasing CO2 emissions.

But biomimicry is in its early stages, and renewables have already crossed to the point of no return, as Fücks puts it. On the plus side, though, costs for solar and wind power have decreased considerably over the last five years.

Fücks sees opportunities for young entrepreneurs and startups in a world without global celebrities such as Bill Gates or Richard Branson. The environmental reform of industrial society, in his view, demands a combination of big and small. There is room for more Elon Musks.

The world of food is fertile ground for big ideas and green tech innovation. Last summer saw the publication of new technology proposals to turn the waste shells of prawn, crab and lobster into nitrogen-rich chemicals for use, say, in pharmaceuticals, carbon sequestration and animal feed, which would avoid industrial production using fossil fuels.

Farmers, too, are innovating worldwide. In Devon, Rebecca Hosking is using new land management techniques to make a contribution to fighting climate change. She uses a grazing method that purposely locks atmospheric carbon back into the soil. Instead of ploughing, her long-grass grazing technique keeps carbon in the roots, ploughing release-carbon from soil into the atmosphere. The more organic matter there is in the ground, the more it can trap in the carbon.

“Once you lock it in, and as long as you don’t plough or let your grassland dry out, then the carbon stays in the soil,” she says. “You know that climate change is happening, we do our bit and suck out as much carbon as we can.”

This method, which French farmers are also keen to implement, is similar in the way it works to a new, low-methane, genetically modified rice. SUSIBA2, the new rice, uses smaller roots, and produces less methane, one of the chief greenhouse gases. Scientists have also developed a feed supplement for dairy cows that could reduce methane emissions by 30 per cent.

Global warming is posing serious challenges to water supply; and we all know that the melting of glaciers is one detrimental effect of climate change. Cue another climate hero: Chewang Norphel, an 80-year-old retired civil engineer, has made 12 artificial glaciers in the last 30 years to provide water for the people of Ladakh, India. The Ice Man, as he is called, realised he could divert water through canals into frozen ice sheets, which would melt in spring and provide water for irrigation, agriculture and general local use. “Getting water during the sowing period is the most crucial concern of the farmers because the natural glaciers start melting in the month of June and sowing starts in April and May,” he told online news portal the Better India.

Ocean farmers are also growing kelp again to encourage a move away from environmentally costly meat-based diets. Indeed, 3D ocean farming proponents GreenWave quote a study that found a network of seaweed farms the size of Washington state could provide all the dietary protein for the entire world population.

Pope Francis’s recent address sounded a note of caution around technology as a solution to climate change. “Our immense technological development has not been accompanied by a development in human responsibility, values and conscience,” he said.

Bill McKibben believes the key is solving the “structural systemic problem rooted in the balance of political power on our planet.” To make a difference, he says, an individual must “join with other people to build the kind of movement that can change those balances of power.” In Naomi Klein’s book This Changes Everything, she writes about the Hollywood action movie narrative that tells us that, at the very last minute, some of us are going to be saved: “Since our secular religion is technology, it won’t be god that saves us but Bill Gates and his gang of super-geniuses at Intellectual Ventures.”

But, while some techno-fixes recall the Greek hubris myth of Icarus, there is work to be done and hope to be found. Around the world, people are working to improve 3D printing technology and the usability of tutorials to explain how to make Connell’s DIY wind turbine or the German Sunzilla. Demand Logic, a company based in London, is using data to sweep big, commercial buildings in the city and work out where energy savings can be made.

Of the UN Climate Conference in Paris, McKibben says it will be most interesting to see whether countries will come up with the money to help poor countries leapfrog technologically. But he maintains that engineers and innovators are focusing their efforts in the right place, speeding up the transition from fossil fuels. Despite the Pope’s cautionary note, the industry of technology is crucial in the shift to a newly balanced planet. McKibben praised the good, cheap solar panels we already have, but said they could be much more efficient and easier to adopt. “There’s no shortage of crucial and interesting work for architects, engineers and financiers, and none of it requires telling yourself science fiction stories, the way that you have to if all you can think of is, ‘Let’s put a giant piece of film in space to block the sun’.”

This article originally appeared in The Long + Short, Nesta's magazine of innovation, new ideas and how the world is changing. Follow them on Twitter, @longshortmag.