Asked by
To ask His Majesty’s Government when they plan to introduce
legislation to address issues faced by residential leaseholders.
(Lab Co-op)
My Lords, I beg leave to ask the Question standing in my name on
the Order Paper and declare my interest as a leaseholder.
The Parliamentary Under-Secretary of State, Department for
Levelling Up, Housing & Communities () (Con)
Ah, the noble Lord, Lord Kennedy—once again. The Government have
been clear about our commitment to addressing the historic
imbalance in the leaseholder system, as he knows. The Leaseholder
Reform (Ground Rent) Act 2022 came into force in June last year.
These changes to ground rent for future leases are just the
beginning of our reforms. Further legislation will follow later
in this Parliament. It is a complex long-term reform programme,
and it is important that we get the detail right.
(Lab Co-op)
My Lords, I am aware and am grateful that the noble Baroness is
committed to leasehold reform. I have no doubt about that. The
Bill, when we get it, needs to: be ambitious by giving proper
rights to leaseholders; enable them to purchase their freehold if
they want to; make greater use of commonhold; or just get rid of
the stupid, petty rules such as the colour of the curtains that
one can hang in one’s own home or the outrageous rip-off charges
levied against leaseholders, day in and day out. What assurance
can she give the House that the Bill will be truly ambitious and
transformative, not just a damp squib?
(Con)
My Lords, the Government have already committed to: making it
easier and cheaper for leaseholders to extend their lease or buy
their freehold; banning new leasehold houses, so all new houses
will be freehold from the onset rather than in exceptional
circumstances; delivering a reformed commonhold system as an
alternative to leasehold ownership for flats; and giving
leaseholders more information about what their costs cover and
ensuring that they are not subject to unjustified legal costs. I
am sorry that the noble Lord could not find time to come to a
meeting that I agreed to the last time I was at this Dispatch Box
talking about the same issue. It was at that meeting that we
discussed what noble Lords were expecting to see and how we could
meet those expectations. However, as I say, we will bring forward
further leasehold reforms later in the Parliament but I cannot
say at this time exactly what date it will be.
(Lab)
The Minister will be aware that the property companies that own
freeholds are able to impose on leaseholders any legal costs that
might arise from a leaseholder’s appeal to a tribunal in the face
of the freeholder’s exorbitant service charges. When will this
extraordinary legal anomaly be redressed?
(Con)
The Government believe that leaseholders should not be subject to
unjustified legal costs and should be able to claim their own
legal costs from their landlord. The Government are committed to
taking action to address this as soon as possible.
(Con)
My Lords, the Leasehold Advisory Service does an excellent job,
but is there an argument to have its remit extended to casework?
(Con)
That is an interesting remark that I will take back to officials
to discuss further. I will come back to my noble friend.
(LD)
My Lords, I want to pursue what the noble Lord, Lord Kennedy,
called rip-off charges, which the Government could take urgent
action to address. I shall give the Minister an example. Fire
doors are now to be inspected—rightly. Leaseholders are unable to
make the arrangements for that inspection but freeholders or
their agents do. One leaseholder contacted me to say that they
are being charged £80 for their front door to be inspected each
time—£320 a year. That is a rip-off service charge. What on earth
are the Government going to do to address these rip-off service
charges?
(Con)
I cannot comment on the individual case, but the law is already
clear that service charges must be reasonable. That is set out in
Section 19 of the Landlord and Tenant Act 1985. If leaseholders
feel they are being ripped off, they can apply in First-tier
Tribunals for determination on this. However, I agree that there
is more to do. The Government are committed to ensuring that
charges, particularly service charges and these extra charges,
are transparent. There should be a clear route to challenge or
redress if things go wrong.
(Lab)
My Lords—
My Lords, in light of the commitment made by the big six lenders
to accept mortgage applications for flats with building safety
issues from Monday 9 January, will the Minister confirm that the
Government will monitor their lending decisions to ensure that
this time their commitments will be fulfilled, so that this part
of the housing market can be unfrozen?
(Con)
The right reverend Prelate brings up an interesting point. I do
not know exactly what the Government will do, as the announcement
was made only this week. However, I will find out exactly how we
will monitor them and the process, and come back to her.
(Lab)
My Lords, I apologise to the right reverend Prelate. Can I press
the Minister on the timetable? She said that she expects the Bill
to be introduced before the end of this Parliament. Does she mean
that it will be introduced before the election? It is not only
disappointing that we have had delays but profoundly
destabilising. For example, leaseholders no longer know whether
it is safe to pursue enfranchisement or whether they should wait
for the Bill. Another thing that has happened in recent years,
with the extension of permitted development, is that there are
blocks of flats with leaseholders held captive by freeholders who
are pursuing upward extensions under permitted development,
without the protection of law. These leaseholders do not even
have protection in case they have to be decanted while building
works are going on. It is a very serious situation and it is
accelerating. I would like the Minister to advise on that point.
(Con)
As I have made clear a number of times at this Dispatch Box,
these measures were in the manifesto in 2019. We have always said
that we will bring forward a reform Bill in this Parliament and
that is what we intend to do. We just have to wait and see; I am
very sorry. I totally understand that this is causing some issues
in the sector. That is why we will get the Bill through as soon
as we possibly can, but it has been quite complex and we need to
get it right.
(Con)
My Lords, I welcome the commitment that my noble friend has just
given to make it easier for leaseholders collectively to
enfranchise, to make it easier for an individual leaseholder to
extend the lease, and to move more towards a system of commonhold
rather than leasehold. I understand that she cannot give a
commitment about the timetable but, given that work on the Bill
is clearly well advanced, can she consider publishing it in draft
so that when it comes forward it can have a speedier passage?
(Con)
I would love to put the Bill out in draft, because I would love
to stop these Questions coming every three months from the noble
Lord, Lord Kennedy. We have committed as a Government to making
enfranchisement easier and cheaper for leaseholders, and that is
important. We have also committed to abolish marriage value cap
ground rents in enfranchisement calculations and prescribe rates
to be used. We have already made clear that this is what we will
do. We just have to be patient until the Bill comes forward.
(CB)
My Lords, back in 2018 the Government set up the regulation of
property agents working group, which I had the honour of
chairing. This came forward with proposals that managing agents
for blocks of flats who look after leasehold properties should be
properly regulated, to deal with a number of the issues that have
been raised. Can I have the Minister’s assurance that this
ingredient will form part of the new Bill?
(Con)
I have not seen the new Bill, so I cannot give that assurance.
However, I am aware of the noble Lord’s review and I know that we
are still considering it.
(Lab)
My Lords, this Question has been about the plight of
leaseholders, and the previous one was about private tenants.
There are also problems in social housing and for people paying
their mortgage, or indeed being able to afford a mortgage in the
first place. Do the Government not recognise that all the things
the Minister has referred to are a piecemeal approach to this? We
have a crisis in every different sector of tenure in the housing
market. It is important that the Government do not rely on the
smaller measures to which she has referred—and given no date for.
We need a whole new approach to housing policy and a whole new
relationship between the Government, local government, landlords
and, particularly, the big house builders and developers, who
seem to make more money from knocking down buildings than they do
from increasing affordable supply.
(Con)
The Government are totally aware of the issues relating to all
sectors of the housing industry in this country and those that
affect tenants and home owners at the moment. We are dealing with
this, but it has to be dealt with in this way; you cannot throw
the whole thing up and look at it in one big piece. It has to be
dealt with well and properly for the future, because a good,
secure and decent home is what everybody deserves and is
certainly something that is important for this Government.
