To ask His Majesty’s Government what plans they have to ensure
managing agents and freeholders (1) are more transparent with
leaseholders on the makeup of the charges they levy, and (2) ring
fence the money raised by such charges.
Baroness Taylor of Stevenage (Lab)
My Lords, on behalf of my noble friend , and with his
permission, I beg leave to ask the Question standing in his name
on the Order Paper and draw the attention of the House to his
relevant interest as a leaseholder.
The Parliamentary Under-Secretary of State, Department for
Levelling Up, Housing & Communities () (Con)
Service charges must be reasonable and where costs relate to work
or services, they must be of a reasonable standard. Such moneys
must be held in trust unless specifically exempt and used for
their intended purposes. We are committed to ensuring that
residents have more information on what their costs pay for, and
this will help them more effectively to challenge their landlord
if they consider their fees to be unreasonable. We will bring
further reforms later in this Parliament.
Baroness Taylor of Stevenage (Lab)
My Lords, there seems to be some confusion regarding statements
made in the other place and in the media by the Secretary of
State, the Member for Surrey Heath. In the other place, he talks
of the reform of leasehold as a tenure of housing, yet in the
media he talks about the abolition of leasehold tenure. Can the
Minister tell the House which it is: reform or abolition? It
cannot be both. Leaseholders deserve absolute clarity on the
intentions of government.
(Con)
The Government would absolutely agree with that. My right
honourable friend the Secretary of State set out in the Commons
his intention to bring the outdated and feudal leasehold system
to an end.
(Con)
My Lords, last month I asked my noble friend if she would publish
the promised leasehold reform Bill in draft. She said she would
love to, if only to stop the question being repeatedly asked; but
she then declined. We now know that the next Session is not going
to start until the autumn. Is there not now adequate time to
publish the Bill in draft and knock it into shape before the last
Session of this Parliament, which may be foreshortened?
(Con)
I thank my noble friend, who perhaps knows more than I do about
when that Bill will come to the other place and then to this
House. Seriously, publishing a draft at this stage would slow the
process down and I do not think any of us wants to do that. But I
do welcome the engagement we are already regularly having on
leasehold and commonhold reform. I am very happy to work
continually with MPs, noble Lords and wider stakeholders until
the Bill comes to the House.
The Lord Speaker ()
My Lords, there will now be a remote contribution from the noble
Lord, .
(Lab) [V]
My Lords, as part of a question I asked last June on the levying
of escalating service charges, I asked whether the Government
might consider a scheme for rolling up service charges in a
debenture against property title—effectively, a rising legal
charge. The debenture holder would pay the resident’s service
charge, interest-serviced or otherwise, clawing back payments on
death or prior. The Minister promised to consider the idea. Will
the Minister check on developments in the department and let the
House know where we stand?
(Con)
I thank the noble Lord. I do remember his question and I am sorry
I have not checked up on this recently. I will do so and will
respond to the noble Lord.
(Con)
My Lords, can we not acknowledge that the debenture issue is not
new but has been going on for years? In this section of the
housing market, both tenants and landlords do not know their
mutual responsibilities. Is it not time for a draft Bill, so that
there can be proper detailed discussions and action can be taken
for the benefit of both parties?
(Con)
The Government recognise the strength of feeling in this House in
particular, and the other place, on the leasehold issue, but it
is complex and needs careful consideration. The Government have
said that we will bring a Bill forward in this Parliament and
that is what we intend to do.
(CB)
My Lords, does the Minister agree that proper consumer protection
is particularly important for older people, who may be downsizing
or rightsizing to retirement apartments and feel totally confused
by the plethora of service charges, exit fees, commission fees
and commission on insurance? Is this vulnerable group not
particularly important in leasehold reform? Otherwise, who is
going to downsize or rightsize ever, knowing the difficulties
they may well face?
(Con)
The noble Lord is absolutely right. This is an important issue,
particularly for older people who may be considering downsizing.
It is just too complex at the moment. That is what we will be
dealing with as we move forward, and I thank the noble Lord for
all his help in doing so.
(LD)
My Lords, the points raised in the Question from the noble Lord,
Lord Kennedy, are, in fact, all covered by very good codes of
practice, advice from government and professional bodies. The
problem is that there is no enforcement and no sanctions.
Evidence from the First-tier Tribunal chamber and the Leasehold
Advisory Service shows that this is happening all too often. When
will there be a regulator with teeth, as recommended in the
report by the noble Lord, , or will the Government at least
consider making the First-tier Tribunal’s decisions legally
binding?
(Con)
We will certainly have a social housing regulator once we get the
Social Housing (Regulation) Bill through the other place and back
through here, and I hope that will be as soon as possible.
Regarding the noble Baroness’s other concerns, we will have to be
patient and wait for the Bill to come forward.
(Lab)
My Lords, the noble Lord, , came up with a recommendation
that we thought the Government had accepted: to regulate all
property agents, which would cover the managing agents and the
questions that have been raised today. I chaired the committee
which gave the Government a code of conduct, ready for that
regulator to start work. Why cannot we get on and regulate the
agents, who are the problem with all the issues that have been
raised?
(Con)
We are taking very seriously the issue of property agents and are
committed to promoting fairness and transparency for tenants and
homeowners in this space. The commitment also includes raising
professionalisation and standards among property agents—letting
estate and managing agents. The Government welcome the ongoing
work being undertaken by the industry itself. Interestingly,
since the noble Lord, Lord Best’s report, the industry is doing
something different and is working better. We will continue to
work with the noble Lord and his working group on what more we
can do to ensure that property agents are behaving
professionally.
My Lords, some of the most vulnerable in society, including
prison leavers and refugees, can be heavily penalised by the
housing system. In the south-west, there is a joint project with
the police and crime commissioner to manufacture low-cost
eco-pods which provide not only employment and skills for
prisoners on day release but a potential solution to rehousing
vulnerable people. What is being done to speed up this sort of
housing provision for vulnerable groups?
(Con)
I thank the right reverend Prelate for that question; I do not
know what is being done, but I will certainly get an answer. I
know from personal experience that these pods can work very well,
particularly for homeless people. In the short term and in bad
weather, in local communities—even next door to local authority
town halls, et cetera—they can give the shelter that is required
during difficult times for very vulnerable people. However, I
will get an update.
(Con)
Many of the freeholders of the leasehold properties are councils,
including Southwark Council, where I live. Many of the
leaseholders have extreme difficulty in getting information on
the nature of the charges. Will any guidance, or stronger, issued
to freeholders and managing agents be clearly applicable to local
councils as well?
(Con)
My noble friend is absolutely right, and the department is fully
aware of these issues. I cannot talk about an individual case,
but we recognise that too many landlords are failing to provide
sufficient information to leaseholders, who should have a right
to that information, as stated in their lease. The Government do
not think that existing requirements go far enough to enable
leaseholders to find out about these issues, and we will take
action to support and empower them in the future.
