It was back to the boom days last night for a champagne reception at the top of the Gherkin tower in the City. The event was hosted by Steve Morgan, legendary founder of Redrow, who was launching his exclusive ONE Commercial Street just to the east of the City.
The apartments are to be managed by Rendall and Rittner, which manages 27,000 units and raises £70 million a year in service charges.
Morgan was happy to give LKP a tour of his new scheme and we discussed the issue of property management, which is not traditionally high on a developer’s agenda.
“After we have sold the units developers don’t usually think much about it, although it obviously carries reputational risk if things go wrong,” he said.
He was interested to hear of LKP’s meetings with other housebuilders and its passion to get a consumer-oriented approach into property management, as well as LKP’s accreditation process.
In other words: straight dealing, transparency and not having a laugh with stealth charges and sneaky commissions. England and Wales offer uniquely rich pickings here because, alone in the world, they retain leasehold tenure, which puts homeowners – or tenants, as leaseholders are in law – in a permanent position of vulnerability.
There were plenty of Far Eastern potential buyers at last night’s do, and estate agents will admit that it is a hurdle to get them to lay down £1 million plus for an apartment and then be told that they are just tenants. They go along with it in London because they have a general faith in English law and realise it is the local way of doing things.
But they don’t like it at all, and they would like it a good deal less if they were aware of the scandals surrounding the property management of high-end London sites, as revealed in LVT rulings.
LKP suggested to Rob Perrins, MD of Berkeley Homes, that buyers at its new site in Kensington High Street would probably be only too happy to pay a little more for commonhold – if it meant avoiding the time-consuming hassles with property management and the freeholder experienced by residents at St George’s Wharf or Chelsea Bridge Wharf.
It is a new departure for Redrow to build luxury flats in London, and another large scheme is being built at Kingston, in Surrey.
LKP has discussed the issue of leasehold management with the chief executives of Berkeley Homes, Barratt, Persimmon and Bellway.