Asked by
To ask His Majesty’s Government when they intend to introduce
legislation to end the residential leasehold system.
(Lab Co-op)
My Lords, in begging leave to ask the Question standing in my
name on the Order Paper, I refer the House to my registered
interests and the fact that I am a leaseholder.
The Parliamentary Under-Secretary of State, Department for
Levelling Up, Housing & Communities () (Con)
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Commons his intention to bring the outdated and feudal leasehold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. The Government wish to extend the benefits of
freehold ownership to more home owners. That is why we have
committed to end the sale of new leasehold houses and to
reinvigorate commonhold so that it can finally be a genuine
alternative to leasehold. We will bring forward further reforms
later in this Parliament.
(Lab Co-op)
My Lords, I thank the Minister for her response. The residential
leasehold system is not fit for purpose. The Government need to
make significant progress in this Parliament, as they promised.
We are running out of time, and the purpose of my Question today
is to seek absolute clarity. Will the Bill we are going to get in
the next Session of Parliament abolish residential leasehold as a
tenure? The answer is either yes or no.
(Con)
Leasehold—the noble Lord is not getting a yes or no—is
increasingly seen as an outdated form of home ownership and, as I
said, the Secretary of State has set out his intention to bring
this outdated and feudal tenure to an end. I cannot set out the
precise details of the future plan at this stage. However, the
Government are committed to creating a fair and just housing
system that works for everyone, and we are taking forward a
comprehensive programme of reform to end unfair practices in the
home ownership market by reinvigorating commonhold, which will
also give developers and buyers of flats a genuine alternative to
leasehold.
(Con)
My Lords, these are difficult times for leaseholders. Many face
high service charges as a result of the cladding scandal, while
others, as my noble friend just said, are exploited by a minority
of freeholders, and there is uncertainty in the market while we
await the Government’s reforms. Can my noble friend do more to
publicise the existence of a free, independent advisory service
for leaseholders, which is supported by her department, and can
she give an assurance that it will have the resources and skills
to meet demand?
(Con)
I think my noble friend is probably talking about LEASE, which is
a government-sponsored arm’s-length body. The Government provide
£1.9 million of funding every year so that leaseholders and park
home owners can get free information and advice. We recognise
that these people face some parallel complexities and lack of
control over some of their properties. We are looking at LEASE—a
new chair is being recruited at the moment—and we are looking for
it to be a little more impactful, customer friendly and cost
effective into the future, as well as leading important work to
ensure that the voices of leaseholders and park home owners are
listened to.
(CB)
My Lords, can the Minister assure the House that the future
legislation will take careful consideration of issues relating to
retirement homes and villages?
(Con)
I am sorry—somebody was talking behind me. Can the noble Baroness
please repeat that?
(CB)
My question was about ensuring that the future legislation will
take into consideration retirement villages and communities.
(Con)
Absolutely. It is extremely important; if the noble Baroness was
in the Chamber last night she would have heard us talking about
the planning system as well, making it clear that with an ageing
population we need to consider homes of all types for older
people in the future.
The Lord Speaker ()
My Lords, the noble Lord, , is participating
remotely.
(Lab) [V]
My Lords, have Ministers noted the large number of leasehold
ground rent investments on property auction sites, as landlords,
aware of potential changes in the law affecting valuations,
offload their leasehold ground rent investments? Innocent
non-professional buyers, ignorant of potential changes in the
law, are now buying them—caveat emptor—placing themselves at risk
of substantial loss. Should government not consider secondary
legislation which would alert an innocent market to the dangers
of buying these leasehold ground rent investments?
(Con)
The noble Lord brings up a very interesting point. I will take it
back to the department and we will discuss it further. These are
the sorts of issues that LEASE will be helping potential buyers
work their way through.
(Con)
My Lords, since there is a considerable challenge in the housing
market, arising partly from Grenfell and the related programme,
and there is a shortage of homes at every single level, is this
not a case where His Majesty’s Government need to move with speed
but also with thoroughness before we take any action?
(Con)
My noble friend is absolutely right. Leaseholder issues are
complex and contain a lot of legal issues that need to be dealt
with. Therefore, we need to take our time, and we are doing so,
but the government manifesto says that we will deal with this
issue within this Parliament, and we intend to do so.
(Lab)
My Lords, the Minister will be aware that freeholders have been
empowered to impose the costs of any litigation that has been
initiated by an agreed leaseholder upon that leaseholder. When
will that extraordinary anomaly in British law be corrected?
(Con)
The Government recognise that the existing statutory requirements
do not go far enough to enable leaseholders to identify and
challenge those unfair costs. We believe that leaseholders should
not be subject to unfair legal costs and should be able to claim
them from their landlords, and we are taking action to address
that.
(LD)
My Lords, in 2020 the Law Commission recommended commonhold
ownership as an option. I thought the Minister committed to that
in her Answer. Can she tell us how the Government see this
proceeding, and is it one of the principal options that the
Government are looking at?
(Con)
The Government are looking at all options but, as the Secretary
of State has said on a number of occasions, we are looking at
commonhold.
(Lab)
My Lords, the only potential benefit I can see is inserting
restrictions on non-conforming developments, which the leasehold
system provides. It is a good start to call the system outdated
and feudal, but can non-conforming developments be prevented by
other means, such as the planning system?
(Con)
The planning system will have to be looked into, but I can say
that, interestingly, through the recent rent Act, new builds are
now no longer or are very rarely leasehold—they are now
freehold—so the developers themselves are looking at this. It is
more complex in flats and with multiple occupancy, but in terms
of houses very few leasehold properties are available.
(Con)
My noble friend the Minister will be aware that in many cases the
freeholder is a local authority. Can she advise us on what
conversations her department has had with local authorities
across the country, or representative bodies of local
authorities, to make sure that they make it easier for
leaseholders to acquire their properties?
(Con)
I will write to the noble Lord with all the details of those
conversations. They are being had, but I will give him more
information when I write.
(Lab Co-op)
My Lords, can I just draw the Minister’s attention to some of the
excellent Private Members’ Bills, including my own, which seek to
address some of the issues that the Minister herself wants to
address?
(Con)
I certainly hope that we get our Bill in before the noble Lord’s.
(GP)
My Lords, community land trusts, co-housing schemes and
co-operatives offer different models focused on building
community, delivering for the common good rather than focusing on
individual profit. Will the Government look into how they can
strongly support these creative, innovative models of housing?
(Con)
The Government do support those forms of housing. We will
continue to do so and will look into how we can support them more
in the future.
