Oral Answers to Questions

Debate between Lord Sharma and Lord Hanson of Flint

Monday 2nd July 2018 Commons Chamber

[Alok Sharma]

My hon. Friend is absolutely right. We are at record levels of employment in this country. It is interesting that the Opposition talk about estimates. If I remember correctly, back in 2010, the Opposition said we would lose 1 million jobs as a result of our policies, but we have created 3.2 million. At the end of the day, when it comes to estimates, I am not taking lectures from the Opposition.

[David Hanson (Delyn) (Lab)]

5. What assessment she has made of the implications for her Department’s policies of the findings of the NAO report entitled rolling out universal credit, published on 15 June 2018.

Leasehold and Commonhold Reform

Debate between Lord Sharma and Lord Hanson of Flint

Thursday 21st December 2017 Westminster Hall

[The Minister for Housing and Planning (Alok Sharma)]

It is an absolute pleasure to serve under your chairmanship, Mr Bone. I congratulate my hon. Friend the Member for Worthing West (Sir Peter Bottomley) on securing this incredibly important debate on leasehold. As Members have made clear, he—along with the hon. Members for Poplar and Limehouse (Jim Fitzpatrick) and Ellesmere Port and Neston (Justin Madders) and other members of the all-party parliamentary group on leasehold and commonhold reform—has demonstrated real dedication to championing leasehold reform.

We have had incredibly thoughtful contributions today. This is Parliament at its best, where we all come together and speak with one voice. We have had humour in the debate, but it has underlined a serious issue that colleagues care deeply about, and we know that our constituents care about it as well.

To respond to the right hon. Member for Wentworth and Dearne (John Healey), in terms of the broken housing market, I hope we all acknowledge that the reason we are where we are is because successive Governments over many decades have not presided over the building of enough homes. In terms of leasehold, successive Governments have left the business unfinished. I absolutely get that what the House wants from this Government is to finish that piece of business.

I have attended and spoken to a packed meeting of the all-party group and heard at first hand the anguish of some of those affected by the leasehold issues we are discussing. Indeed, many Members have highlighted individual cases from their constituencies. I am also grateful for the welcome from right hon. and hon. Members for this morning’s written ministerial statement to the House from my right hon. Friend the Secretary of State for Communities and Local Government. As has been said, today we have also responded to the consultation on leasehold held earlier this year. My remarks will very much echo the Secretary of State’s statement.

A number of colleagues noted this, but in February the Government’s housing White Paper, “Fixing our broken housing market,” set out our commitment to promoting fairness and transparency for the growing number of leaseholders. I do not want to rehearse the whole issue around leaseholders and the number of people affected—we know that a lot of people have leasehold homes.

Of course, ground rents on many such properties have risen from historically small sums to hundreds of pounds a year. As colleagues have pointed out, in some cases ground rents have spiralled into significant sums. That is why the Government acted and published a consultation over the summer. I am grateful to everyone who participated and provided evidence—particularly Members of the House and of course the all-party group. The consultation received an overwhelming response: there were more than 6,000 replies, and the vast majority were in favour of widespread leasehold reform.

I repeat the point made by the right hon. Member for Delyn (David Hanson) about being in an echo chamber when we have talked about the issues affecting constituents. It is clear that many purchasers did not make an informed choice to buy a leasehold house. Far too many reported being surprised to find that their home had been sold on to a third-party investor, and the cost of buying the freehold had risen considerably—as we have heard, sometimes running into tens of thousands of pounds.

[David Hanson]

Is that not a prima facie case of mis-selling?

[Alok Sharma]

I will come on to talk about the work that the Government will be doing with the Law Commission.

We have also heard of consumers with very onerous ground rent terms who are effectively trapped in their own homes, unable to find a buyer. Some of those people have not been able to get redress and do not know where to turn for support. It is clear that the leasehold system as it stands is not working in many consumers’ best interests. Even most developers accept that use of leasehold for new build houses, unless in exceptional circumstances, is entirely unjustified. This has got to stop. That is what we all want.

The Secretary of State’s statement noted that, alongside publishing a response to the consultation, the Government have set out a package of measures to crack down on unfair practices, which includes introducing legislation to prohibit the development of new build leasehold houses, other than in exceptional circumstances. The Government intend to ensure that future legislation to ban the sale of leasehold houses applies to land that is not subject to an existing lease from today’s date. We will continue to work with the sector and other partners to consider the case for exemptions to the policy and its retrospective application, in particular to mitigate any undue unfairness.

We are restricting ground rents in new leases of houses and flats to a peppercorn, and we are addressing loopholes in the law—for example, to ensure that freeholders have a right to challenge unfair service charges. We are also working with the Law Commission to support existing leaseholders, including by making the purchase of a freehold or extension of a lease easier, faster, fairer and cheaper and, of course, by reinvigorating commonhold.

The right hon. Member for Wentworth and Dearne and the hon. Member for Brentford and Isleworth (Ruth Cadbury) raised the issue of the Law Commission. I can confirm that the Government will be funding the work. We will be funding five lawyers and five research assistants, a proportion of the managers’ and the commissioners’ time and some peer review and external consultancy. That work will start in January.