Tabled by
To ask His Majesty’s Government what plans they have to abolish
residential leasehold for flats.
(Lab)
My Lords, on behalf of my noble friend Lord Kennedy and with his
permission, I beg leave to ask the Question standing in his name
on the Order Paper.
The Parliamentary Under-Secretary of State, Department for
Levelling Up, Housing & Communities () (Con)
My Lords, I declare my interest as a leaseholder.
The Government are extending the benefits of freehold ownership
to more home owners. Reforms in the Leasehold and Freehold Reform
Bill will help leaseholders to buy their freeholds and will end
the sale of new leasehold houses so that, other than in
exceptional circumstances, all new houses will be freehold from
the outset. For flats, the Government remain committed to
reinvigorating commonhold to give developers and home owners a
viable alternative to leasehold should they choose it.
(Lab)
My Lords, I thank the Minister for her Answer. Of course, we
welcome the reform of leasehold, but with 5 million leasehold
properties in England, 70% of which are flats, there is
disappointment that they are not included in the Bill. Also, it
does not appear that the Bill bans the sale of leasehold houses,
either. The Times is reporting that the Minister’s department did
not have time to include the leasehold ban before the Bill was
introduced this week. Can she please clarify whether it is the
Government’s clear intention to ban leasehold? If so, when will
we see the relevant clauses?
(Con)
My Lords, I can reassure noble Lords that it is the Government’s
intention to bring forward clauses to ban the sale of new
leasehold houses within this Bill. We intend to bring forward
those clauses during the Commons stages. When it comes to flats,
on the other hand, reform is more complicated. They have shared
fabric and infrastructure and therefore require some form of
arrangement to facilitate management. This has traditionally been
facilitated by a lease. Therefore, banning leasehold flats is
inherently more complicated. We will be taking forward, at a
later date, reforms to the commonhold system to allow that to
replace the leasehold system.
(CB)
Does the absence of these clauses lead the Minister to draw a
conclusion which has general application—that Parliament is asked
to consider far too much legislation, to be proceeded with at far
too great a pace?
(Con)
I do not draw that conclusion. Leasehold reform is complex. We
have consulted widely and are taking time to get things right. I
understand the desirability of bringing forward these clauses as
soon as possible for Parliament’s scrutiny and that is what the
Government intend to do.
(Con)
My Lords, I very much welcome the provisions of the leasehold
Bill, which provide a better balance between the interests of
freeholders and leaseholders. However, the Bill does not do what
said it would. He said:
“I don’t believe leasehold is fair in any way. It is an outdated
feudal system that needs to go. And we need to move to a better
system and to liberate people from it”.
He wanted to replace leasehold with commonhold, but the Bill does
not even mention commonhold. So will my noble friend be surprised
if some of us seek to amend the Bill to deliver what her
Secretary of State actually wants?
(Con)
My Lords, I have tried to learn not to be surprised by any
amendments tabled to government Bills by your Lordships’ House,
but I would like to reassure my noble friend that this Bill is
focused on helping leaseholders now by making existing leases
fairer and more affordable. We have focused on legislating where
we can make a genuine improvement to leaseholders’ daily lives
right away. For example, we are making it cheaper and easier for
leaseholders to purchase the freehold of their building or a
999-year lease on their property and take control of their
building’s management from the freeholder. When it comes to
reforms to commonhold, we continue to consider the Law
Commission’s report in detail to find the best way forward and we
are committed to taking forward that additional work.
(LD)
My Lords, one of the most expensive consequences of being a
leaseholder, especially in flats, is the service charges that
freeholders can level against you. They are completely
unregulated and can be totally exorbitant. Does the Minister
agree that we need to abolish service charges, especially for
flats, and replace them with a commonhold system, which would be
much fairer for leaseholders and would stop unscrupulous
freeholders from ripping off hard-working families?
(Con)
I can reassure the noble Lord that the Bill does contain
provisions to bring greater transparency around how service
charges are brought for leaseholders, so that there is greater
accountability for what those charges go to and leaseholders have
a greater ability to challenge them if they think they are
unfair.
(Non-Afl)
My Lords, as the Minister will know, the most frustrating thing
for those of us who are leaseholders is the lack of control.
There is a tried and tested formula for residents’ control, which
is recognised in the Bill, and that is freehold. At the very
least, will the Government consider a really simple, cost-free
change to the Bill, which would be a mandated share of freehold
for all new flats? That would at least prove that they are really
committed to tackling the issue of getting rid of toxic leasehold
for ever.
(Con)
My Lords, as I have said, we believe that commonhold provides a
potential way forward to move away from leasehold for flats, but
there is reform of commonhold that needs to take place so that it
will be fit for purpose. I reassure the noble Baroness, as I have
others, that there are significant measures in this Bill that do
exactly what she pointed towards, which is giving leaseholders
greater control over the properties that they own and live
in.
(Lab)
My Lords, the wider problem, of course, is that there are far too
few new homes, either leasehold or freehold. Is the noble
Baroness aware that France, with a population of about the same
size as ours, now has 12 million more homes than Britain, and has
built more than twice as many new homes as we have over the last
13 years? There has been a net addition of 2 million homes, a
high proportion for social lease. I know that Ministers are not
talking to their European counterparts at the moment, but does
she not think that learning something from our European partners
could be valuable in tackling the housing crisis?
(Con)
My Lords, the Government are absolutely committed to increasing
supply. The noble Lord is right that that is part of the
solution, particularly when we have in place the provisions to
ban new leaseholds in new houses. But the Government are
delivering on that promise. We are on track to deliver our
commitment to 1 million new homes during this Parliament. We are
investing £10 billion in increasing the supply of homes, and in
the last few years we have seen some of the highest rates of home
delivery in decades.
(Con)
My Lords, will my noble friend convey to Mr Gove the most
generous offer made by the noble Lord, , on behalf of the
House, which was apparent from the reaction to his question? Why
does she not tell him that this House can put right what he has
not yet got right?
(Con)
I am sure that this House will communicate its views to the
department as we progress the Bill throughout the scrutiny. It
will go through the Commons first and I look forward to debating
the provisions in detail when it reaches the Lords.
(LD)
My Lords, commonhold is used widely across the world, so why has
it taken the Government so long to consider what works so
successfully across the rest of the world?
(Con)
My Lords, this Bill, and the other reforms that we have made in
this space, are comprehensive and complex. We have taken time to
look, consult and bring forward the proposals that will have the
biggest impact on leaseholders today, while also committing to
ongoing reform in the future.
(Con)
My Lords, the Autumn Statement contained a commitment to take
forward reforms to residential estate investment trusts. Will my
noble friend take forward the support the House has for
leveraging significant private sector funding into much-needed
residential accommodation via REITs?
(Con)
Yes, the Autumn Statement set out the way forward we are going to
take on that issue. We need proper financing to support our
ambitions for more homebuilding. Some of that comes through
government support, but the private sector is a key partner here
and we need to do everything that we can to unlock
investment.
(Con)
My noble friend mentioned there were complications in extending
freehold to leaseholders in flats. She does not have to answer
everything right now, but I wonder whether she could write to me,
and deposit a copy in the Library, about some of those
complications, so noble Lords can better understand those
barriers to extending freehold?
(Con)
I would be very happy to write to my noble friend but, as I said,
in looking at the distinction between houses and flats, the
majority of houses have always been provided as freehold, and
there are few justifications for building leasehold houses. We
have seen, in recent years, this practice being exploited by
developers to levy unfair charges on home owners. Flats, on the
other hand, have shared fabric and infrastructure and therefore
require some form of arrangement to facilitate management.
Traditionally, this has been facilitated by a lease, but, as we
discussed, commonhold is an alternative way to do this.
