Robert Goodwill: Ministers must not let anti-leasehold zealotry inflict unintended consequences on the elderly

5 Feb

Robert Goodwill is MP for Scarborough and Whitby, and a former Home Office and Education Minister.

We have all been shocked and appalled by reports of homeowners being unfairly targeted by a combination of unscrupulous developers and incompetent solicitors where escalating ground rents have made their dream home unsellable.

The Government has rightly said that “unfair lease terms have no place in the housing market”. Practises such as selling houses on leasehold rather than freehold, applying ground rents that double arbitrarily every few years, and charging pernicious “consent fees” when people want to make simple home improvements, need outlawing and the Government is making good progress in that regard. I applaud Housing Minister, Chris Pincher, for the decisive action he is taking.

But defining what is “unfair” beyond the clear abuses, carried out by a minority of house builders, is less clear-cut. In the escalation of policy responses under successive ministers, some people for whom leasehold and a moderate yearly ground rent is economically beneficial are now at risk of losing out. One such group will be people who want to move into retirement housing, who in many cases will find themselves paying considerably more than they do now.

Anyone that has visited a good retirement housing development will know that a sizeable part of the development is taken up with shared-use areas, typically lounges, offices, and reception areas for the on-site manager, guest rooms, treatment rooms, and in some cases dining facilities. These communal areas, which are a defining characteristic of retirement housing, are a shared resource that come with a cost.

Currently this cost is recouped through a yearly ground rent payment of typically £400 each year per apartment, a cost that is always made clear to customers, and to their solicitors, when they choose this particular sort of housing. Without the ground rent, the costs of these areas will need to be recouped by adding between £15,000 and £18,000 to the purchase price.

Replacing the £400 annual ground rent with a hike of £15,000 on the purchase price means somebody would have to live in their apartment for 38 years before they were any better off financially. The sad fact is that most people only live in this type of property for 10 years or so. A survey in 2018 found 80 per cent of people would prefer to pay a yearly ground rent of £500 rather than a higher purchase price of £15,000.

These legitimate views were reflected in the Government’s previous policy of mandating all retirement housebuilders to give customers the option between a yearly ground rent or a higher purchase price.  However, the recent decision to abandon this approach and ban ground rents in every circumstance leaves buyers facing a higher purchase price or even an “exit fee”.

An exit fee recoups costs by requiring in some cases as much as 30 per cent of the value of an apartment to be paid back to the retirement development when it comes to be sold. Some who urge the abolition of ground rents in retirement housing point to exit fees as the future, but the fact is an exit fee or a higher purchase price both cost more than a moderate ground rent of the sort already in place.

Take a new retirement apartment in my Scarborough and Whitby constituency which costs £200,000 with a ground rent of £416 per year. The total cost over ten years including ground rent will be just over £204,000. Under the current proposals in the future the same property will cost £215,000 with no ground rent, or £220,000 if it carries an exit fee of just ten per cent.

There is a clear urgency about act on historic leasehold abuses, but rushing to adopt a crude one-size-fits-all approach to ground rent will push up prices for people choosing to move into safe, age-friendly, supported housing which in many cases keeps them out of costly institutional care.  These are precisely the sort of moves Government should be making less costly not more.

Robert Goodwill: Why grouse shooting matters for moorland communities

11 Aug

Robert Goodwill is MP for Scarborough and Whitby, and a former Home Office and Education Minister.

The coronavirus pandemic has devastated communities across the UK, particularly those reliant on seasonal tourism. Businesses in areas like the magnificent North Yorkshire Moors in my own constituency have been brought to their knees.  Sadly, many of the new breed of “staycationers” we are seeing are leaving little for locals apart from the litter from their picnics.

However, a new study by researchers from the University of Northampton has revealed a vital lifeline which is helping to keep some of these communities afloat, even amid the coronavirus storm. The study examines the impact of integrated moorland management practices, including those that benefit grouse, in upland communities. It finds that grouse shooting forms part of a ‘complex web’ of economic and social factors that allows some moorland communities to not only survive, but thrive in these difficult times.

The study, which is one of the largest of its kind, surveyed moorland residents around the UK and found that communities where moors were managed for grouse were far more socially vibrant and economically resilient than those which had no connection to the activity.

To those, like me, who are familiar with these communities, this comes as no surprise.

In 2010, the Moorland Association estimated that the industry was worth some £67.7 million in England and Wales. One North Yorkshire pub landlord who participated in the recent study estimated that shooting parties accounted for 30 per cent of his business between August and September, dropping slightly to 20 per cent between October and January.  This can often be the key factor that ensures the survival of the local pub as the focus of the remote community.

What makes the results of this recent study so fascinating, however, is the breadth of impact grouse shooting has been shown to have on the entire uplands economy. As well as supporting the wages of gamekeepers, beaters and publicans, estates managed for grouse shooting rely on a whole host of local contractors, sporting agents, lawyers and other workers to facilitate the sport.

One grouse moor owner estimated that only about ten per cent of the £800,000 he spends annually goes on gamekeepers’ salaries, with the rest paying for the upkeep of the moor.

Much of this upkeep is itself of massive benefit to local farmers, who work alongside grouse moor owners to conserve and protect the land. While “The Glorious Twelfth” itself is not subsidised, associated moorland management is, and the study found that moor owners regularly facilitated farmer access to government stewardship funding streams.

One farm in Barnsdale was documented to receive 22 per cent of its income from stewardship, while another received 30 per cent. By footing the upfront costs of conservation work, moor owners allow farmers to access millions of pounds in grants which are usually only paid after the work has been carried out. Under new post-EU support schemes these environmental factors will be even more vital.

The researchers from Northampton concluded that the long-term economic impact of such practices was ‘massive’, not only for local moorland communities but for the whole of the UK.

If estates were to stop integrated moorland management, the researchers forecast that these communities would become even more reliant on tourism and hospitality, the very sectors most at risk from a second peak of infection. The economic consequences of this, they surmised, would be ‘severe’.

Our uplands are also a vital resource in the fight against the other epidemic we face. We are the most obese nation in Europe and this not only leads to many health complications but is a major factor in Covid-19 mortality.

Moorland communities benefit from increased access to well-managed outdoor space, with 89 per cent of survey respondents regularly exercising on the moors. 69 per cent engaged in the recommended 150 minutes of moderate exercise per week, compared to a national average of 66 per cent for men and 58 per cent for women. By maintaining tracks and clearing areas of bracken, grouse moor managers contribute to this culture of fitness amongst moorland communities.

These communities also benefit from strong social links and a deep-rooted sense of identity. 83 per cent of those surveyed felt they ‘belonged’ to their communities, with shooting playing a strong part in this sense of identity. 74 per cent of respondents were involved in shooting in some way and over 90 per cent of them identified a connection to family heritage and rural identity as a reason for participating in the sport.

Additionally, the researchers found what they considered to be a surprising level of community participation in moorland areas, with at least 51 per cent of survey respondents participating in some type of social activity such as a church choir or pub quiz team. They attributed this community spirit to the presence of gamekeepers and their young families in the villages, as well as the intergenerational mixing facilitated by shooting itself.

These kinds of social links are incredibly important to both mental and physical well-being and represent huge financial savings to our heroic NHS. A sense of belonging is also absolutely crucial during the present pandemic when many of us feel cut off from the world and from our loved ones. As with its economic impact, the social roots of integrated moorland management run deep and provide a lifeline to many communities that would otherwise be struggling even more.

Covid-19 has prompted many of us to reconsider certain aspects of modern life we once thought indispensable. From home-working to stay-cations, the pandemic has highlighted how adaptable we as a society are to change and how unfit for purpose many of our usual habits and routines are under the ‘new-normal’. Yet in following the science, we find that some of our older, more traditional ways of doing things can help us to keep weathering the present storm.

For upland communities, moorland management that incorporates grouse shooting allows for a richer, more diversified stream of revenue and a more fulfilling social life that benefits even those who have never picked up a gun. As we reconsider life in a post-Covid world, it is important that we preserve those activities which keep businesses afloat and draw communities like these closer together.