Private Sector Renters: Eviction Protection

Baroness Grender Excerpts

Wednesday 6th September 2023 Lords Chamber

Asked by

[Baroness Grender]

To ask His Majesty’s Government what steps they are taking to protect renters in the private sector who are seeking help with energy-saving improvements from eviction.

[The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Scott of Bybrook) (Con)]

My Lords, the Government are committed to ending Section 21 no-fault evictions. We introduced the Renters (Reform) Bill in the other place to do this. Without the fear of retaliatory eviction, once Section 21 is abolished, tenants will be more empowered to act within their legal rights, complain about unacceptable standards and seek improvements. Private rented properties should be warm and decent, and we have several schemes to support energy-saving improvements to provide this.

[Baroness Grender (LD)]

Does the Minister agree that the balance is wrong if, according to a report by Generation Rent, nearly 40% of fuel-poor households rent privately but only 14% of energy company obligation grants help them in any way? Will the Minister ensure that the Renters (Reform) Bill protects tenants from either eviction or prohibitive rent rises if they get these grants? That is surely urgent, and important above other tenures.

[Baroness Scott of Bybrook (Con)]

I agree. I looked at the figures showing where private renters were utilising the Government’s grants for energy efficiency in their homes, and I think we should be spending more time trying to improve take-up. The Renters (Reform) Bill is important because it will deliver a fairer, more secure and higher-quality private rented sector. It will deliver the Government’s commitments to a better deal for renters, as well as for landlords, by improving the system for responsible tenants and the good-faith landlords who are in the majority.

Leasehold Reform (Ground Rent) Bill [HL]

Baroness Grender Excerpts

Committee stage
Monday 14th June 2021 Grand Committee

Moved by

[Baroness Grender]

14: Clause 9, page 7, line 9, leave out “£500” and insert “£5,000”
Member’s explanatory statement
This amendment would raise the minimum financial penalty under the Bill from £500 to £5,000.

[Baroness Grender (LD)]

My Lords, this group of amendments is an attempt to ensure that enforcement bodies have sufficient financial long-term sustainability. It also ensures that there are appropriate deterrents in the Bill to incentivise freehold landlords to understand just how serious a breach will be and the impact it will have on their current portfolio of properties. The additional aim is to create an incentive for local authorities to pursue financial penalties.

Today, of course, is the fourth anniversary of the Grenfell Tower fire where 72 people lost their lives, and I am sure that we are all thinking of those bereaved families, survivors and residents as they remember their loved ones. That tragedy underlines just how important it is that homes are safe and secure, and one of the first lines of defence is the enforcement authorities.

In addition to moving Amendment 14, I will speak to Amendment 15. While we appreciate that the Minister stressed at Second Reading that the fines would be for each individual lease, the danger remains that an enforcement authority will receive only £5,000. Indeed, Clause 9(3) states:

“Where the same landlord has committed more than one breach of section 3(1) in relation to the same lease, only one financial penalty may be imposed on the landlord in respect of all of those breaches committed in the period”.


Several noble Lords at Second Reading raised the issue of enforcement and resources to enforce. Local authorities’ trading standards departments have experienced staff cuts of at least 50% since 2010. It is not unusual for skilled and experienced—and therefore more expensive—staff to have been replaced with less skilled and lower-salaried staff. Sometimes trading standards has been contracted out to third parties completely. Local authority trading standards departments need greater sustainable long-term resource and that means generating greater levels of income.

Therefore, there should be a wider range for the fines and a higher start point for the penalty. The amount should be consistent with the Tenant Fees Act 2019 where landlords breach Sections 1 and 2 of the Act on more than one occasion. If you are a leaseholder, you are not a home owner, and therefore the levels of potential fines should surely be similar to those for rogue landlords in the Tenant Fees Act. The Bill relies on local weights and measures authorities—namely, trading standards departments—to oversee this new law. The Government will already be well aware of the sluggish approach to fining and banning rogue landlords under the Tenant Fees Act 2019. When originally launched, the Government predicted that there were 10,500 rogue landlords; so far, only 43 have been registered. Speak to many local authorities and they will report that an operation of this nature requires early up-front investment, but other priorities such as social care with chronic records of poor funding will inevitably come first. As Liam Spender, a trustee of the Leaseholder Knowledge Partnership, points out:

“It is likely most local authorities will decline to get involved, as they do in most private sector housing disputes now, on the grounds that leaseholders have civil claims they can use to recover any prohibited ground rent.”


Waiting for the next local government settlement is a short-term solution and, frankly, unlikely to solve this problem given other competing demands on local authorities. Now the Government are adding another task with too limited financial reward: as the fines currently stand in the Bill, the incentive to take the necessary action to fine a freeholder will not be worth the effort.

Amendments 14 and 15 would raise the minimum financial penalty from £500 to £5,000 and the maximum financial penalty from £5,000 to £30,000. The potential of greater fines would give local authorities an opportunity to invest in this operation, charge rogue landlords and freeholders and therefore sustain a longer-term, fully budgeted operation. If the Government are opposed to this increase, perhaps the Minister could share what level of financial penalty would make it worth while for a local authority to pursue a freeholder. If the argument is that this will have an impact if it is a penalty on a developer across several leases, what level of fine do the Government anticipate?

On Amendment 16, in my name and that of my noble friend Lord Stunell, the arguments are similar. It contains a new clause that would be inserted after Clause 12 that would extend the banning order regime under the Housing and Planning Act 2016, with an exception for rent recovery orders. It would ban landlords who received three or more penalties in any six-year period from collecting some or all of the monetary ground rents arising under pre-commencement leases. That should be a clear signal to persistent offenders that, under Clause 9 of the Bill, if the maximum penalty has been charged three or more times against the same landlord or a person acting on their behalf, there will be restrictions and penalties.

We recognise how significant the failure is of this part of the Housing and Planning Act 2016. On 9 January 2018 the then MHCLG Minister, Jake Berry MP, said the Government’s estimate was that

“about 600 banning orders per year will be made”.—[Official Report, Commons, Fifth Delegated Legislation Committee , 9/1/18; col. 12.]

In April, the Housing Minister, Christopher Pincher MP, confirmed that just seven landlords had so far been issued with a banning order. As the National Residential Landlords Association says of this failure:

“The Government needs to work with local authorities to understand the true extent of the pressures faced by environmental health departments responsible for enforcing many regulations”


affecting this sector.

“Too often, government has introduced initiatives to crackdown on”,


for instance,

“criminal landlords without properly understanding whether councils have the resources and staff to properly enforce them. In short, regulations and laws to protect tenants”—

and to protect leaseholders from bad practice—

“mean nothing without them being properly enforced.”

When we look at the level of these fines, we must remember that this industry is vast. The MHCLG’s own estimate is that, of the 4.5 million leasehold properties in the UK, approximately 2.5 million are owner-occupied. All these people are likely to be paying some level of ground rent. The companies behind the freehold interests receiving these ground rents are huge undertakings. They are more than a match for any local authority seeking a £5,000 fine. For example, Proxima GR, a key company in the Vincent Tchenguiz freehold portfolio, reports in its most recent accounts that it expects to receive £2.4 billion in ground rent between 2019 and 2080. It is believed to control a portfolio consisting of freehold interests over hundreds of thousands of leasehold properties. The same accounts report cash income of £24 million in the same year. A fine of £500 or £5,000 for multiple breaches is no disincentive to any organisation of that scale. Information on other ground rent investors is hard to come by but, from the limited information available, there are many other substantial operators out there. For example, in 2016, leasehold properties worth £64.8 billion were sold. Of these, new-build properties were worth £13.7 billion, leasehold house numbers doubled, and developers made £300 million to £500 million a year from ground rent sales. Looked at from that perspective, £5,000 seems a very small sum to put as a maximum. Has the Minister considered an industry-funded redress scheme to support enforcement?

To conclude, there should be greater detail in the Bill about how to resource penalties and sanctions to sustain longer-term planning and funding. These are large industries with significant levels of income and profit: they need to be aware that their days of exploiting leaseholders are over and failure to recognise that will cost them dearly. I beg to move.

[Lord Naseby (Con)]

My Lords, I am delighted to support the noble Baroness on Amendments 14 and 15. I was just reflecting on how important this issue is: hundreds of thousands, maybe millions, of families are affected. The problem probably goes back over half a century. It is to the great credit of my noble friend on the Front Bench that the Bill is before the Committee now, and I say to him “Well done.” In 1968—I see my noble friend Lord Young sitting opposite me—I had the privilege of being elected, somewhat against the odds, as the potential leader of the London Borough of Islington. We won 57 out of 60 seats; we did a deal with the other three, because they were a local community group. I was then elected to be leader and chairman of the housing committee. Sitting here this afternoon, I still remember working really closely with the officers of that authority, from the town clerk down. It was not entirely to do with leaseholds, but it was to do with property and rogue landlords. Two in particular come to mind: a local one called De Lusignan and the one whom we all remember, Rachman. Those rogues and their successors have not gone away—the noble Baroness is absolutely right; they may well have multiplied for all I know. They were a huge problem even in those days.

There is another element, which I can talk about, though some noble Lords might have more difficulty. I have lived and worked in Pakistan, India and Sri Lanka. I have the greatest respect for those countries. I would go as far as to say that I love them dearly; I know them extremely well. As far as I can see, there is a rogue element, particularly in the poorer parts of our country, which exploits vulnerable migrants. That is wrong, and we know that it is wrong, but some local authorities appear to be slow, resistant, unwilling or too conscious of the social situation. In my view, as someone who has taken a deep interest in housing all my political life, that rogue element has to be addressed—it does not matter who they are.

The noble Baroness is right about the figures that are in the Bill. In today’s world, £500 is absolutely no deterrent to anybody: you only have to see what is happening out there in the market. She is right that £5,000 is the beginning of a reasonable deterrent. Personally, I would do a multiplier by five, because £25,000 somehow—perhaps it is the advertising man in me—sings out as even stronger than £30,000. I do not know why that is, but I thought about this when I was working on it over the weekend. I agree with the noble Baroness that £5,000 is the beginning of a proper deterrent, and I think that £25,000 should be the maximum.

Of course, it is for my noble friend on the Front Bench to decide what Her Majesty’s Government believe is appropriate, but all I say to him is that this area needs dealing with, and here is an opportunity to do it. I again congratulate my noble friend and his colleagues on bringing this Bill forward. Let us make a really good job of it.

--- Later in debate ---

Amendment 16 proposed by the noble Baroness, Lady Grender, and the noble Lord, Lord Stunell, would have the detrimental effect, which I am sure was not intended, of making it impossible to make rent repayment orders against anyone subject to a banning order for receiving any monetary ground rent. For these reasons, I ask the noble Baroness to withdraw her amendment.

[Baroness Grender (LD)]

I thank the Minister for his response. I am very interested in his response about redress schemes—that is something that we could possibly explore at Report. Just to put things in perspective, the Government have recently published a draft online safety Bill which would enable a new online regulator to fine companies up to £18 million or 10% of their annual global turnover, whichever is higher. We are looking at those kinds of equivalents here.

The point about local authorities contemplating a possible windfall is the very opposite of the current scenario, where a local authority will look at a potential freeholder and ask whether, if it goes down the route of attempting to fine for breach of lease, three days’ work alone by somebody with no legal skills will use up the £500 that it would get from the fine. While I appreciate that, as I said in my opening remarks, fines would be across all leases, there is a problem when, if there are multiple breaches for one lease, that is not recognised in the legislation as drafted.

The most important issue is that we need to understand that the penalties and punishments will actually work. We know that there are significant challenges for local authorities to enforce the current systems and that these new systems will seriously struggle and be seriously challenged.

I thank all noble Lords who have expressed their support for these arguments and amendments. Obviously, we will want to revisit this. We will look at the Official Report and see what can be done to continue to pursue this issue, which is all-important because, without enforcement, the Bill is simply not going to work. I beg leave to withdraw the amendment.

Amendment 14 withdrawn.

--- Later in debate ---

[Lord Young of Cookham (Con)]

My Lords, one of the themes in our debate on Second Reading was the need for a clear definition of what exactly a ground rent is. In addition to those who have taken part in Committee, I recall the contribution of my noble friend Lord Hammond of Runnymede, who drew on his experience in this area to outline some issues about definition. The helpful briefing that we have all had from the Law Society has as its first priority the need to amend the definition of rent in the Bill. It says:

“The main issue with the Bill at present is the failure to distinguish between different types of rent. Although the Government’s clear intention is to tackle ground rents alone, the Bill does not make this focus clear.”


During the proceedings this afternoon, I have had a further email from Mr Hugo Forshaw of the Law Society saying that he is supportive of the spirit of my amendment; he has offered support for a tweaked amendment on Report because, apparently, mine is not absolutely perfect, in his view.

Amendment 21 deals with this important issue. We need an effective and clear definition if the legislation is to work in practice. There is no current clear definition. Clause 22(2) says:

“‘rent’ includes anything in the nature of rent, whatever it is called”.

If I may say so, that is reminiscent of the controversy about self-identification and the context of gender identification—that if you say something is the case, then it is. The Government’s current approach will, I fear, result in litigation to determine the scope of what counts as ground rent. While such litigation is ongoing, leaseholders will have to continue to pay ground rents in all but name to avoid forfeiture. It is therefore essential that there is a workable definition from the day this legislation is commenced, without leaseholders needing to engage in litigation with landlords to establish that definition.

I listened to my noble friend the Minister’s point at Second Reading that the drafting of “rent” had been left deliberately wide so as to avoid providing a target for landlords to work around, but I am not sure this is wise. The drafters of our tax legislation face similar challenges, for example, yet manage to achieve a greater degree of precision than has been achieved here. There is value in ensuring that future leaseholders and their advisers can determine with certainty what is and what is not ground rent. That way, they can at least seek amendments to a proposed lease to avoid ever agreeing to pay a disguised ground rent. This broad definition risks capturing sums often reserved in the lease as rent, and therefore called rent, which may be perfectly legitimate service charges or insurance contributions. As my noble friend Lord Hammond said at Second Reading, they risk capturing market rents granted under a long lease, which is not the Government’s intention.

Leading law firms have echoed the Law Society and my noble friend Lord Hammond in requesting a clear definition of ground rent, lest there be serious unintended consequences. For example, Herbert Smith Freehills says:

“As currently drafted, the form of the legislation does not differentiate between ground rent and any other kind of rent: in short, anything reserved as rent (eg service charge, insurance rent) would be cancelled and unenforceable. Similarly, there is no reference to the rent being of the nature of a ground rent, so if the lease exceeds 21 years, there would, as the Bill currently is drafted, be no way of granting a long residential lease without a premium and at a market rent. We expect these points are likely to be addressed as the Bill proceeds through Parliamentary readings.”


The definition I offer is based on that found in Section 4 of the Leasehold Reform Act 1967, which is also the definition recommended by the Law Society. But I have added to that definition words that relate to any fixed charge, or a charge which varies or may vary by reference to an amount of money, a fixed measure—for example, RPI inflation—or a period of time: for example, a charge which doubles every 10 years. The aim of this drafting is to include within the definition of ground rent any charge that does not vary in accordance with the cost of providing a service or an item. This is done using the well-known and well-understood definition of “relevant costs” in Section 18 of the Landlord and Tenant Act 1985, for which there is already much case law.

The wording of Amendment 21 is deliberately extended to include fixed service charges, for which currently leaseholders have no means of redress. At least one set of barristers’ chambers—Landmark Chambers—has already identified this as a potential weak point in the legislation, allowing ground rents to continue in a different guise. The aim of this drafting is to ensure that charges made in exchange for a tangible service, which may vary in accordance with the cost of a tangible service, are not within the definition of ground rent. That reflects the Government’s policy, as set out in the Explanatory Notes. This strikes a necessary balance between bona fide service charges reserved as rent and any attempt to circumvent the ban on monetary ground rents by adding fixed service charges or index-linked service charges, or escalating fixed service charges which function as ground rents but which are not given that label.

My noble friend may say that, as the Bill applies only to future leases, some of these uncertainties can be resolved by drafting new standard leases for future use. But if either this Bill is amended or a future Bill implements government policy to enable existing leaseholders to buy out their ground rents, this definition may well be used to cover existing leases, so the need for clarity is even greater.

Paradoxically, the existing definition may catch items that are not ground rents— the case mentioned by my noble friend Lord Hammond—but may not capture fixed service charges that should be caught. On that basis, I beg to move my amendment.

[Baroness Grender (LD)]

My Lords, the definition of rent is an area that requires detailed scrutiny when looking at loopholes during the passage of the Bill. As we heard from the noble Lord, Lord Young of Cookham, at present, as drafted in Clause 22(2),

“‘rent’ includes anything in the nature of rent, whatever it is called.”

This wide definition has set alarm bells ringing. We therefore strongly support this probing amendment by the noble Lord, Lord Young.

As I described in the debate on the first group of amendments today, this is a billion-pound industry which will not let its grip on the market go lightly. It relies heavily on borrowed money to acquire freeholds, all secured on the basis of future ground rents. With the potential of a “rent” unpaid and forfeiture as the pot at the end of the rainbow, we need to make sure that there is some very specific detail in the Bill as to what “rent” means.

The danger is clear, especially on forfeiture, as defining any service charge as “rent” means it must be paid to avoid that forfeiture before a leaseholder can even protest or start to take legal action against the amount charged. The Leasehold Knowledge Partnership has warned that “rent” or a contractual arrangement, as we heard from the noble Lord, Lord Young, could take the form of a fixed payment for arranging buildings insurance or for appointing and supervising the managing agent. Can the Minister say whether, for instance, it is possible to include in a future lease a payment of, say, £200 per year rising in line with CPI inflation as a payment for the landlord’s expenses in arranging buildings insurance if that exists as a fixed service charge rather than a prohibited ground rent caught by the new law? Does he accept or recognise that it would not be possible for leaseholders to challenge that payment as the law stands or is proposed in the Bill? What measures has the Minister’s department taken to ameliorate this all-important issue?

The Bill says that no rent under a lease other than a peppercorn is permitted unless the lease is one of the types of lease excepted from the Bill. But in the Explanatory Notes we are told that the Act is intended to capture any payment under a lease that does not impose an obligation on the landlord to provide a service. LKP trustee Liam Spender put it this way:

“In modern leases, and modern case law, ‘rent’ often has a broader meaning. Many modern leases will define ‘rent’ as including both ground rent and service charges. Some modern leases also specify separate ‘insurance rents’ to cover the costs of buildings insurance arranged by the landlord. It is uncertain if the bill intends to force future leases to be redrafted so that these provisions are no longer described as part of the ‘rent’, or if the bill is not intended to capture these provisions because they are payments for tangible services.”


I look forward to the Minister clarifying some of those points.

--- Later in debate ---

[Lord Young of Cookham (Con)]

My Lords, before I speak in strong support of Amendment 26, I raise an issue on commencement, which I think I raised at Second Reading—namely, whether it is possible to have different commencement dates in England and Wales. It is not entirely clear from Clause 25, as I read it, whether one could specify different dates and whether the possibility exists, for example, for the Welsh Assembly to come to the Minister and say, “We would very much like this Bill to be enacted in Wales way ahead of what you are minded to do in England.”

I turn to Amendment 26. During our first Sitting, my noble friend said:

“In order to move on to further legislative action on leasehold reform, we need to get this Bill through as speedily as possible.”—[Official Report, 9/6/21; col. GC 283.]


When he replied to Amendments 19 and 20 this afternoon he repeated that imperative for speed. This need for a swift passage has been behind the resistance to amendments even when, as we discovered last week, it was an amendment that delivered government policy.

As my noble friend Lord Blencathra said, the force of the Government’s argument is weakened if they will not give a firm date for implementation. All we know is that retirement homes will not be affected for another two years. It seems entirely reasonable for my noble friend Lord Blencathra to argue, as in Amendment 26, for a quid pro quo: swift passage in return for swift implementation.

The other leg of the Government’s argument has been, “Don’t worry if this Bill doesn’t do everything. Another one is right behind.” I expressed some scepticism about this last week; we are still waiting for stage 2 of Lords reform promised in 1997. I know my noble friend’s heart is in the right place but all he has been able to say is that stage 2 will be later in this Parliament, which is scheduled to last until December 2024. That legislation could then have a later enactment date, as this Bill does, so I think it fair to press the Government for clarity. Why not publish a draft Bill later in this Session and introduce it in the next one?

I end with a comment that adds weight to this need for clarity. This Bill was introduced in your Lordships’ House and has had a relatively easy ride, but the other place is full of MPs under pressure from leaseholders in their constituencies. Even the at times assertive language of my noble friend Lord Blencathra will pale in comparison with what Ministers will hear in the Commons, so I strongly urge my noble friend to develop what is known in the trade as a concession strategy on dates if the Government really do want to see the Bill proceed to the statute book without delay.

[Baroness Grender (LD)]

My Lords, I am really confused by the Government’s approach on this. It seems to be summarised as follows: “Give us this Bill as quickly as possible so that we can take as long as we can and as long as we like to implement it.” The problem is that there is a whole load of future leaseholders out there—and more importantly the marketplace, which believes that this lacks clarity.

Please do not take my word for it. I was reading a blog by Gary Murphy, an auctioneer on behalf of Allsop, which at the moment sells almost half of all London ground rents traded at auction. He notes the intention for this to change over a very long period of time, in the Landlord and Tenant Act 1987, the Leasehold Reform, Housing and Urban Development Act 1993 and the Commonhold and Leasehold Reform Act 2002. He goes on to say:

“Before freeholders panic, and new investors smell blood, we have to remember that reforms in this area have been on the cards since 2017. Recent announcements have amounted to little more than a press release. Whilst effective in courting headlines, they have changed nothing for the immediate future.”


The critical issue is that the marketplace, which needs to be convinced the most that this change is imminent and about to happen, is even less convinced than the noble Lords from whom the Committee has heard this afternoon. Until it is this market will continue, even if it is traded at slightly lower reserves.

--- Later in debate ---

[The Deputy Chairman of Committees (Lord Faulkner of Worcester) (Lab)]

I thought I had a request from the noble Baroness, Lady Grender, to speak after the Minister. Does she now not want to do so?

[Baroness Grender (LD)]

I will take the opportunity, since I have created so much confusion. I thank the Minister for saying that he will go back and see whether it is at least possible to specify some kind of commencement date. I would very much like to say to him that I think all sides of this House will happily work with him and his department and take recommendations if it is at all possible to specify a date in order to counter the market scepticism that I described to him. If it is at all possible to put a date by the end of this process, we would be very grateful for that move.

[Lord Greenhalgh (Con)]

Of course, as a Minister I would like to have stronger lines at this stage but it is important to recognise that we need to lay the regulations and ensure that the enforcement of this works, and there are communications challenges. However, taking that all into account, I am sure that we can reach a situation where we provide much greater clarity and we can be more specific around commencement dates. We can work towards that as the Bill moves through this House and on to the next stage.

Leasehold Reform (Ground Rent) Bill [HL]

Baroness Grender Excerpts

Committee stage
Wednesday 9th June 2021 Grand Committee

[The Deputy Chairman of Committees (Baroness Healy of Primrose Hill) (Lab)]

I call the next speaker, the noble and learned Lord, Lord Mackay of Clashfern. Lord Mackay, could you unmute, please? I will move on to the next speaker, the noble Baroness, Lady Grender.

[Baroness Grender (LD)]

My Lords, the debate so far has underlined the urgent need for reform across the entire leasehold sector and has reflected some of the strongly made arguments at Second Reading. In particular, many of the amendments are about the 4.5 million current leaseholders who are still captured by this unfair legacy and the failure to shift to commonhold, initiated in the 2002 Act.

I start by taking this opportunity to thank the Minister for discussions in advance of Committee and to stress our strong support for the Bill’s intentions. Its primary purpose is to chop off the head of the snake: the continuing supply of investment opportunities for freeholders on which they can base their borrowing for the next batch of unsuspecting leaseholders. I therefore hope that it goes through the parliamentary process with considerable speed. That said, what we cannot afford is any loopholes that enable this “something for nothing” industry to continue. When we debate later clauses, noble Lords will see that I believe there is a significant loophole that will be exploited: informal extensions, more ON which later.

As the relevant Committee, it is vital that we continue to remind ourselves of the shocking unfairness out there for many leaseholders. Last month, the Daily Mail featured a story about Carole Patterson, aged 44, an administrator in human resources whose ground rent on her flat in south London doubles every five years, rising to £1 million a year in 50 years’ time. The freeholder, MEA Real Estate Ltd, is prepared to waive the ground rent for a one-off payment of a whopping £100,000, described as

“a quarter of the value of the property”.

Given the value of that property, it is now almost impossible for her to sell on. Currently, leaseholders exist in a climate that was probably signed off by a solicitor, supposedly on their behalf. For all the Caroles, it is critical that this reform begin, and soon.

I therefore thank the noble Lords, Lord Kennedy and Lord Lennie, for Amendment 18, which I have also put my name to. It addresses the critical need for a swift resolution to the problem of existing leaseholders, and therefore asks for the next Bill to be delivered in draft form as quickly as possible. We recognise that the Law Commission has suggested a longer period, but the Government do not always do what it recommends. At present, a third of Law Commission recommendations are not implemented, some due to timing, but others because the Government have decided not to implement them. At certain points, politicians need to decide and act. With chronic unfairness built into the system for 4.5 million leaseholders, this is one of those moments.

Regarding the readiness for this change on the part of the freehold investment sector and the ongoing oligopoly of housebuilders, it is possible to argue that, since the leasehold reforms of 2002 or perhaps earlier, they have been forewarned that the clear intention over time of various Governments, of all parties, has been to move out of the leasehold system. If they are not prepared for that scenario, the problem belongs fully with them and not with the Government.

As my noble friend Lord Stunell—also a member of the former Chief Whips club in our own party—said, we of course support the intention of Amendments 1 and 2, in the name of the noble Lord, Lord Blencathra, to move more swiftly to cover all leaseholds. We also support his Amendment 11, which would limit ground rents with a relevant cap of £250 and provide for reimbursement. It is an interesting approach, given that, as I understand it, a property in London with a ground rent of more than £1,000 a year, or of over £250 per annum in the rest of the country, now falls into the definition bracket of an assured shorthold tenancy. That means that for some aspects of leasehold obligations, the courts do not have jurisdiction, especially regarding forfeiture, which was much discussed at Second Reading. I therefore look forward with interest to the Minister’s response to this issue.

--- Later in debate ---

[Lord Naseby (Con) [V]]

My Lords, I too pay tribute to the noble Lord, Lord Best. I am in my 80s and, from talking among friends, I am aware of at least two couples who are beginning to think about retirement homes. The noble Lord, Lord Best, is quite right. We discussed this issue before I even knew it was coming up in the Bill.

This sector of the market is, first, growing—that in itself is very encouraging—and as a country we have been a bit slow in this area compared with other countries. Secondly, it is growing in the sense that it was clear, back in my days as an MP, that there was a scepticism about retirement homes with all these extra facilities, but now it is taken as the norm and people are particularly fussy. If, as the noble Lord, Lord Best, says, a number are caught by this time dimension, it seems sensible that any business that started by the dates he puts in his amendment should be exempt.

I do not understand why 55 was chosen. The retirement age is still going up, so 55 seems a bit generous, frankly. Another 10 on top of it would not have gone amiss, but that is a minor issue. I hope Her Majesty’s Government take the points made by the noble Lord, Lord Best, very seriously; they need addressing.

[Baroness Grender (LD)]

My Lords, developing adequate housing stock for an ageing population is a significant challenge for this and future Governments. The work of the noble Lord, Lord Best, and the publications by his APPG for Housing and Care for Older People have been essential reading in this area. While we recognise that what is now in the Bill is a compromise achieved following a total exemption for retirement homes in the original consultation, and in spite of the arguments of the noble Lord, Lord Best—whose expertise in this area is significant—when the Minister responds, I still want to understand where the essential difference lies between retirement and other leaseholders, in his or the Government’s opinion. If the straight answer is money required to be spent on common parts, surely a more honest and transparent way to do that is in either the original price or the service charges. However, I hear what the noble Lord, Lord Best, has said today and will study his explanation.

Given that ground rents appear to serve no purpose, as we have already discussed several times and at Second Reading, other than profit for the freeholder or security to borrow to develop more properties, why is this different when applied to retirement homes? I am sure that noble Lords are familiar with the Times investigation into this in November 2019, but it bears revisiting. It uses the example of one retirement property bought for £197,000, in 2009, from the FTSE 250 development company McCarthy & Stone, which was sold for only £26,000 six years later. By the time the flat owner died, she was paying the management company almost £8,000 a year.

The Times went on to say:

“Housebuilders such as McCarthy & Stone argue that without the money they make selling the freehold to management companies they could not afford to provide communal areas for their properties. Yet this is a poor excuse when there are far more transparent ways to raise revenue, such as simply selling their properties for a higher price.”


They often cover that in the service charge. The article continued:

“They insist, moreover, that the majority of their homes have increased in value.”


However, the Times then went on to find that

“one McCarthy & Stone property had lost £45,000 between 2015, when it was bought,”

and 2019. The same investigation found that, as with other leaseholders, elderly relatives are persuaded to use a solicitor who the developer has recommended, who turns out to be the very opposite of an advocate on behalf of the retiree. As the noble Lord, Lord Best, has explained, this group can often be exploited and manipulated.

For those reasons, we are minded to support the amendments in the names of the noble Lords, Lord Kennedy and Lord Lennie, but look forward to hearing the arguments in the closing stages of this debate.

[Lord Lennie (Lab) [V]]

My Lords, the welcome provisions of this Bill will not apply to retirement properties until at least April 2023, despite previous suggestions by the Government that these properties would be included. This is echoed by the contribution of the noble Baroness, Lady Grender. It represents a clear U-turn, without any explanation, and for this reason I have tabled Amendment 25 with my noble friend Lord Kennedy, intended to bring retirement properties in line with all other homes.

If the Government had placed the April 2023 date in the hope of creating a transition period, the Minister should explain to the Committee exactly why this is needed, when it has been accepted that no period is necessary for other properties, as part of this. Given that over 50,000 people in the UK live in retirement community units, I hope the Minister can explain what consultation has taken place with groups representing those residents and their families.

I am pleased that the noble Lord, Lord Best, who is deeply knowledgeable, has tabled an amendment to consider the application of this legislation to retirement homes where development has begun prior to commencement. I hope the Minister will offer an explanation of what steps the Government will take to support residents, which this clause relates to.

--- Later in debate ---

[Lord Mackay of Clashfern (Con) [V]]

My Lords, this is an amendment on the principles that my noble friend Lord Young of Cookham explained when speaking to his amendment. The only reason why I thought of doing it this way was to make it part of the legislation now, if that was acceptable, with a degree of flexibility in the Secretary of State’s powers to fix the way payment would be adjusted or assessed. I thought it might help to deal with this situation now rather than later. As I said, this is based to an extent on the way feu duty was dealt with in Scotland when it was made compulsory to stop it altogether as we departed from the feudal system. My suggestion may be attractive in the sense that it avoids dealing with a lot of detail now. On the other hand, it may not be very wise to leave it so doubtful, especially when there are other concerns associated with the payment of ground rent, such as the maintenance of insurance policies and so on. I beg to move.

[Baroness Grender (LD)]

As in the earlier group, we support the principle of this amendment. I reiterate that the elegant drafting by the noble Lord, Lord Young of Cookham, in the earlier group is the drafting that we would prefer—and very much look forward to seeing on Report.

On Amendment 5, our concern would be about any kind of delay in this process, which would be driven by having to produce subsequent drafting of regulations for how the amounts would be calculated. Therefore, we would prefer the wording used by the noble Lord, Lord Young of Cookham.

I also take this opportunity, given that the Minister, in his summing up of the first group of amendments on trying to extend to existing leaseholders, made an argument about the proportion and percentage of pension funds that are currently invested in freehold property and the disruption that this might cause to pension funds, to ask him to elaborate on what kind of proportion that might affect, and what the balance is between the 4.5 million leaseholders who currently experience quite a significant negative impact in terms of ground rent in particular in the abuse of this system, and the pension fund system.

[Lord Lennie (Lab) [V]]

My Lords, this amendment returns the debate to the question of existing leaseholders and appears to allow existing leaseholders to pay a fee to exempt them from ground rent. As I said in the earlier group, ground rent arrangements are overwhelmingly balanced to benefit landlords and the system needs urgent reform for all involved.

I am grateful to the noble and learned Lord, Lord Mackay, for explaining that this was based on the Scots departing from the previous feudal system, but I am concerned that his amendment, if applied literally, could lead to landlords charging extortionate termination fees. None the less, I appreciate that he sees the need for reforming the system and I look forward to the Minister’s response.

--- Later in debate ---

[The Deputy Chairman of Committees (Lord Russell of Liverpool) (CB)]

I have received one request to speak after the Minister from the noble Baroness, Lady Grender.

[Baroness Grender (LD)]

I should just like to ask the Minister to perhaps write to all Members involved in this debate to give a bit more detail about what proportion of pension funds are impacted, given that my understanding is that the pension funds are fully aware of the intention to abolish ground rents and extend that to existing leaseholders. I should still like to understand the balance of impact between the 4.5 million leaseholders and the pension funds, if that is to be deployed as a significant argument in this issue. I am very happy for the Minister to write to us later about this.

[Lord Greenhalgh (Con)]

My Lords, I shall try a second time, because obviously I did not manage it the first time. We have not made a commitment to abolish by fiat existing ground rents. We have committed to make it as easy as possible for leaseholders to enfranchise or to buy themselves out of the ground rent obligation. That of course then becomes a phased approach to the 4.5 million people who are paying ground rents. Of course, we are looking to the Competition and Markets Authority to deal with the issue of onerous ground rents. That is the policy position; the noble Baroness is implying something that we have not committed to.

--- Later in debate ---

Moved by

[Baroness Grender]

6: After Clause 2, insert the following new Clause—
“Existing leases: transparency requirement
(1) In this Act an “existing lease” means a lease which meets the following conditions— (a) it is a long lease of a dwelling,(b) it is not an excepted lease, and(c) it was granted before the relevant commencement day of any section of this Act that would make it a regulated lease.(2) Before requiring a payment of rent under an existing lease the landlord must provide the tenant in writing with a justification for the cost of the rent, and an explanation of what the payment will be used for.(3) Section 83 of the Consumer Rights Act 2015 (duty of letting agents to publicise fees etc) is amended in accordance with subsection (4).(4) After subsection (7) insert—“(7A) This section also applies in relation to a payment of ground rent.””Member’s explanatory statement
This amendment would require landlords charging ground rent on leases granted before this Act came into force to explain what the rent is for. It would also require lettings agents to make details of any ground rents available to prospective leaseholders.

[Baroness Grender (LD)]

My Lords, this is a fairly small amendment but may make a big difference for leaseholders. In a way, it is about replicating what I thought was a very successful late-stage amendment to the Tenant Fees Act. We are trying to introduce a greater level of transparency for leaseholders.

Before being required to pay a rent under an existing lease, the landlord must provide the tenant in writing with the justification for the cost of the rent and an explanation of what the payment will be used for. I fully understand and recognise, given the arguments made at Second Reading and those made so far today, that in reality, a lot of us would say that the ground rent is used for absolutely nothing—except buying a new Porsche for a very wealthy freeholder, for instance. However, I still believe that there should be an explanation and accountability and that we should use the opportunity of the Bill to ensure greater accountability. A lot of people who campaign in the area of leasehold reform want to see a display of comprehensive, accurate data on properties. They want to see how long the lease is, what the ground rent is and what the nature of the ground rent is. We already heard in the debate at Second Reading that some people are charged a ground rent without any notification; suddenly they are asked for a particular sum and they may then get into dangerous grounds of forfeiture if they cannot pay it.

The sentiment I am particularly trying to push for—I will be very happy if the Minister says that the wording is not quite right, but that he understands and recognises the sentiment and will come back with further drafting on Report—is that people who currently have to pay freeholders ground rent should get some sense of accountability regarding the amount, the future amount and what it goes towards.

I also take this opportunity to point out that ground rent demands already have to be accompanied by a statement of leaseholder rights, so there is absolutely no reason why the Government cannot prescribe a standard form of information to be given to leaseholders in this area.

Also, could the Minister in summing up answer a question I asked on Second Reading about the CMA’s action against Countryside and Taylor Wimpey? I asked whether, if the process the CMA is currently undergoing fails and it has to go to court, the Minister would consider putting more emphasis in the Bill on consumer protection law. With that I mind, I beg to move.

[Lord Mackay of Clashfern (Con) [V]]

My Lords, I support this. It is highly important that a person buying a property which is subject to this kind of rental arrangement should know precisely what its details are, as a necessary condition of the purchase. It seems essential to me to point out the whole nature of the responsibility for ground rent and what can happen, not only next year but in years to come. A person buying a property is entitled to know all the burdens on it at the time of purchase.

--- Later in debate ---

[Baroness Grender (LD)]

I thank the Minister and all noble Lords who spoke in the debate. We have not got to Amendment 13 yet, so I hope we can have a bit more discussion about it in the next group. I thank the Minister, in particular for his point about the CMA. I fully understand what he said. I hope that Ministers feel able to state an intent if the CMA court action is unsuccessful, simply to underline the need for particular developers who are currently on the naughty step to change their ways. I should very much like to revisit that, potentially on Report.

I thank the noble and learned Lord, Lord Mackay of Clashfern, for his support and my noble friend Lord Stunell for his example in Leicester, which I think still holds true in this discussion. I hope to take another look, read the Minister’s words and revisit this on Report. I want to ensure as much transparency as possible for leaseholders. I think we all agree that leaseholders are not given full transparency or provided with full information. That is why so many leaseholders are so aggrieved, particularly the 4.5 million current leaseholders, as opposed to future leaseholders. With all that in mind, I beg leave to withdraw the amendment.

Amendment 6 withdrawn.

--- Later in debate ---

[Baroness Grender]

This group has two purposes. The first would be to remove Clause 6 altogether to ensure that informal extensions come under the regulations proposed in the Bill; the second, less dramatic amendment would increase transparency in both formal and informal renegotiations or extensions of the existing lease. I shall deal with Clause 6 stand part first.

We see informal leasehold extensions as a significant potential loophole and the next obvious area to exploit for the “something for nothing” industry in this area. Therefore, we wish to ensure that informal leasehold extensions are regulated in the same way. I appreciate that there may be extenuating circumstances where there is a need for an informal extension—for example, if someone inherits a home and needs to make a relatively quick sale on a very short lease—but those circumstances should be the exception, not the rule. I fear that this will become standard practice unless the Government find a comprehensive way to restrict its use. If noble Lords who speak after me in this debate have concerns and examples of the advantages that an informal leasehold extension provides, I am more than happy to hear suggestions of better solutions than this, but the key question for this debate is how to prevent informal extensions being used, as they currently are, to exploit leaseholders and how that can be reflected in the Bill.

I will be using, in particular, specific examples provided in a detailed blog on this issue by Louie Burns. Sadly, he died a year ago. He was a trustee of the Leasehold Knowledge Partnership and an expert practitioner in the area of leasehold extensions. I have taken the liberty of sharing the link to his blog with noble Lords participating in the debate on this group of amendments.

Louie Burns called such offers “Trojan horse offers”. He described an offer from a real case he dealt with, made by a large London-based freeholder, on a property valued at £230,000 with a ground rent of £75 a year, doubling every 33 years, and a current lease of 75 years. The cost of extending the lease using statutory legal rights would be a total of £13,250, securing a lease of 165 years with zero ground rent.

Often, the freeholders in this scenario are professional money makers. They make money from licensing fees hidden in the lease, through claiming a finder fee for the building insurance, when people have no choice as to who building insurance is provided by, through service charges and ground rent—and, of course, through money paid to extend the lease.

The freeholder writes to the leaseholder offering to extend the lease back up to 99 years—which means that, 17 years later, the lease will need extending again —for £10,200, plus VAT of £1,000, with ground rent at £250 doubling every 10 years, with a short deadline of 30 days to make a decision offered by the freeholder. In the small print, of course, the leasehold is extended only to 99 years—or the freeholder may offer 125 years, without explaining that the extension is from the date that the lease was originally granted, not the date of the extension offered.

Louie Burns went on to explain how the costs described, over a 24-year period, added up to more than £100,000, which will go to the freeholder. Please remember that this is a specific real case, which he provided as an example. When compared, unfavourably, with the statutory route, costing about £13,000, with zero future ground rent, that is beyond shocking. We need to bring this sharp practice under some form of regulation.

The other option is to accept Amendment 13, which would impose an obligation to explain. If leaseholders had the full picture and knew both their statutory rights and the full costs over 24 years, say, they would have much greater control. The alternative is an informal extension to 99 years—which, as I said, would have to be renewed 17 years later, and then in turn makes the flat impossible to sell, and prohibitively expensive to maintain, with the ground rent alone.

An informal extension of a lease also means that the leaseholder is not protected by the law, and the freeholder can make changes by saying things such as:

“We are not looking to amend your lease in any way, we will only modernise the terms of your lease.”


Louie Burns, in his blog, told people to beware of the term “modernise” as used here, because it means “amend”. An informal leasehold extension is a quick route for a freeholder to add additional payment. It is also a quick route for a solicitor to receive a fee—which may explain why, often, solicitors do not give a warning.

The statutory route is slower. With banks and building societies now showing reluctance to lend for such leasehold arrangements, yet again, the person who suffers the most, and is caught between freeholder and lender, and cannot sell, is the leaseholder, who has received minimal information. Sometimes Ministers like to solve such transparency issues through guidance. But if the aim is to ensure that the freeholder complies with the law, I suggest that the transparency approach should be in the Bill. I beg to move.

[Lord Naseby (Con) [V]]

My Lords, the noble Baroness has done us a great service. We have all read about these situations. I am not aware of the details of any of them, but there has been enough coverage in the responsible media for me to see that this is a problem. I hope my noble friend on the Front Bench will be able to address it.

I assume that in this group we are also dealing with my noble friend Lord Young’s Amendment 12, although I notice that it is not listed. It says “After Clause 6”. Is that after this debate?

--- Later in debate ---

[Baroness Grender (LD)]

I thank the noble Lord and all Ministers for participating in this part of the discussion. I fully recognise the need for some level of flexibility and that there is a case for informal extensions. As I said in my opening remarks, I still think there is a danger of this being a loophole through which the industry, which we know is not very responsible or kind to leaseholders, will travel. It will exploit any and every available gap in the law in order to perpetuate itself. For example, when the Government said they were going to ban leasehold houses, the industry rapidly moved to deploy estate rentcharge schemes attached to freehold houses. This ensured that there were still two profits on the sale of every plot and that investors could still access a certain income stream, albeit by a different name. As a result, the consumer—the leaseholder —continues to suffer.

I very much appreciate the Minister’s intention and hope that we continue discussions about how this significant loophole can be closed. I particularly thank the noble Lords, Lord Naseby and Lord Lennie, and the noble and learned Lord, Lord Mackay of Clashfern, for their support for these amendments. Like my noble friend Lord Stunell, I hope that we move to a pragmatic remedy. There is potential for compromise and, with that in mind and an optimistic sense that there will be some compromise on Report, I beg leave to withdraw the Motion that Clause 6 do not stand part of the Bill.

Clause 6 agreed.

Rogue Landlords Register

Baroness Grender Excerpts

Wednesday 26th May 2021 Lords Chamber

Asked by

[Baroness Grender]

To ask Her Majesty’s Government what progress they have made towards introducing a register of rogue landlords; and how many such landlords they have registered.

[The Minister of State, Home Office and Ministry of Housing, Communities and Local Government (Lord Greenhalgh) (Con)]

My Lords, I declare my residential and commercial property interests as set out in the register. The Housing and Planning Act 2016 introduced a database of rogue landlords and property agents as part of a package of measures to tackle poor standards within the private rented sector. This included banning orders, civil penalties of up to £30,000 and rent repayment orders. The database went live on 6 April 2018 and currently contains 43 entries.

[Baroness Grender (LD)]

Given the Government’s original estimate that there are well over 10,000 rogue landlords and that there would be 600 banning orders a year—not seven, as is currently the case—and given that every one of these criminal and rogue landlords getting away with it means untold misery for thousands of tenants, what was the Minister’s response when he found out it was such a small number? As a Minister, what did he then do to put this right?

[Lord Greenhalgh (Con)]

My Lords, this database is not meant to be a metric of local authority enforcement work. In its current form, it is targeted at only the very worst and most persistent offenders who have been convicted of a narrow range of offences or have received two civil penalty notices within a 12-month period. I have satisfied myself that the Government have provided a lot of support regarding improving enforcement against the most egregious and rogue landlords.

Leasehold Reform (Ground Rent) Bill [HL]

Baroness Grender Excerpts

Monday 24th May 2021 Lords Chamber

[Baroness Grender (LD)]

My Lords, as many noble Lords have said, this Bill is most welcome. I thank the Minister for the meeting that he held with me last week, but I think all of us would recognise that this is a first tentative dip of the toe into the vast lake that is leasehold reform. We all hope and are impatient to see the full-blown dive, and we want it to come soon.

It was five years ago that the Leasehold Knowledge Partnership warned the Government of the pending ground rent and leasehold scandals; that was before the tragedy of Grenfell and before the pandemic of the past year, cited as the reason for the latest delay. I believe that we should pay particular attention to its recommendations regarding this Bill; it wants this Bill as a first small step. We must beware the powerful lobby of freeholders and investors who will try to widen the Bill then find loopholes to change it; we should pay attention to the Leasehold Knowledge Partnership’s recommendations with great care.

It has taken too long; the timetable outlined by the noble Baroness, Lady Ritchie of Downpatrick, was helpful with respect to the history of this. This Leasehold Reform (Ground Rent) Bill cannot come soon enough for the leaseholders of tomorrow. As many noble Lords have mentioned, this of course leaves the question of what happens next to the 4.5 million current leaseholders who have been treated as commodities or income streams to be sold to the highest bidder in a feudal system—as brilliantly explained by the noble Lord, Lord Blencathra—in what I will describe as “the peppercorn peroration”. The system, reinvented by wealthy Victorian landowners, is almost unique in the world, in which third-party ground rent investors or landlords often sit in direct conflict with the interests and needs of the leaseholders—the families and individuals who have bust a gut to own a home but, sadly and tragically, been screwed by the small print.

The noble Baroness, Lady Bowles, shared one example of charges of £1,000 per property on a 250-unit site with five-year reviews, while the noble Baroness, Lady Wheatcroft, shared an example of service charges. On Friday, on BBC Radio Four’s “You and Yours”, a lady called Jane Hewland, who bought in 2006, described how she started with service charges of £12,000, which are now £30,000 per annum. I appreciate that, for Boris Johnson, this is an annual takeaway bill, but it is the equivalent of an annual salary for a health worker. The noble Baroness, Lady Pinnock, also described an extraordinary figure that rose from £5,000 to £16,000 on a £170,000 flat in London.

Ever since the attempt in 2002 so ably described by the noble Lord, Lord Best—I am sure I am not the only Peer in this House who is reassured that he has got something wrong, given that he is such an expert in this area—to encourage more commonhold, it has been clear that, in this so-called free market, the people who are not free are the leaseholders themselves. Indeed, government incentives, subsidies and ideology have pushed people into home ownership with unclear leases and hidden charges. Little wonder that the Leasehold Advisory Service, a Government-funded body, has found that 57% of leasehold purchasers have regretted becoming owners—or alleged owners, because of course they have soon discovered that they are not. As one leaseholder said to me last week, “With the fire safety costs and the additional charges for leaseholders, England is the very opposite of a free-market home-owning economy”. Jane Hewland put it this way: “You own nothing, you control nothing and going to court means you end up paying all the charges”.

I therefore support the strong words of my noble friend Lady Pinnock and the noble Earl, Lord Lytton. Alongside my noble friend, I will continue to test every sinew of each law coming through this place to ensure that leaseholders—who, as she always says, did nothing wrong and everything right—get a fair deal when it comes to cladding and the fire safety issue. As she also says, clearly we are dealing with highly unethical freeholders. I also welcome the reform of the regulation of property agents suggested by the noble Lord, Lord Best, and look forward to hearing the Minister’s response on that issue.

I place on record my thanks to the Leasehold Knowledge Partnership, the National Leasehold Campaign and the Building Societies Association for their briefings on the Bill. It is clear from the charities that fight for the rights of leaseholders that this legislation is welcome, albeit a small step. The particular advantage that we in the Lords have is that across parties and with the Government we can sometimes, in Committee and in more informal discussions, have useful conversations that will rule out loopholes and tighten some of the language. This was particularly successful for the then Tenant Fees Bill under the strong leadership of the noble Lord, Lord Bourne, and I hope we can repeat that exercise with this issue so that the fears of the noble Lord, Lord Young of Cookham, about three days of Committee may not come to pass and we can find some easier ground.

We need this legislation soon so that we can get to the main Bill with greater reforms. It is a good first step to strip out of the market the ability for a third party to acquire a freehold and levy charges, so Clauses 3 and 4, which make the permitted rent a peppercorn rent, have our support, although I look forward to hearing the Minister’s answer to the excellent question from my noble friend Lord Stunell and the noble Baroness, Lady Andrews: in the face of all the evidence, why are we settling for this? That said, it is also welcome that there will be no administration fees for the cost of collecting that peppercorn rent. This is an achingly slow process. When it was changed in Australia in the 1960s, it took decades for the inherently unfair system of leasehold to be removed.

In Clause 5, we will look at whether there are some unintended exceptions of shared ownership, and will watch to ensure that a developer cannot use this clause to circumvent the original intention of the law.

In Clause 8, what support will local government have to enforce these changes? I particularly note the comments of the noble Baroness, Lady Jones of Moulsecoomb, and my noble friend Lord Stunell. Will the Minister perhaps consider some pump-priming to get enforcement started? He will already be aware of the current abysmal failure to register rogue landlords, so what can be done to improve enforcement and resource it in the first stage? After all, it is a bit of a chicken-and-egg situation.

That takes me on to some of the things that are missing from the Bill. In his opening remarks, the Minister confirmed that informal lease extensions can continue and can be chosen to include a ground rent for the remaining period instead of a larger up-front sum. There is significant concern that freeholders will put in massive multipliers when offering informal lease extensions just to make the premium look more attractive and lower. In other words, in the period running up to the introduction of this Act, what kind of dodgy deals are going to be done to extend leases where the consumer will come a cropper?

The current, almost barbaric, system of forfeiture for a level of arrears that bears little relation to the overall value of the property is, as my noble friend Lady Bowles said, the only system under which total forfeiture of an asset is allowed when the debt may be only a small part. I look forward to hearing from the Government that there are further reforms on this in the pipeline, particularly following the Law Commission’s recommendations. I wonder whether we should try to put this into primary legislation.

I also look forward to further news regarding the CMA’s enforcement action, particularly against Countryside and Taylor Wimpey for their use of terms that double the ground rent every 10 or 15 years. It is suggested that this breaks consumer protection law. Can the Minister clarify whether it is the Government’s intention to tackle this issue in primary legislation or to wait for the courts if the CMA’s action fails?

We also all wait with some interest and impatience to hear the results of the deliberations of the Commonhold Council set up by the Government and chaired by the Minister. Frankly, as we have heard from almost every speaker, until that thorny issue is concluded, until we end a system almost unique in the world and until we follow in the footsteps of Australia, Scotland, Canada, New Zealand and the USA—to name but a few—the claim that these are the most significant reforms will at least be on hold.

I stress the words of the noble Earl, Lord Lytton, and my noble friend Lady Pinnock, who asked about the unintended consequences of a two-tier system in the market where long leaseholds end up having a bad press and cannot be sold on by the people who own them.

Also missing from the Bill are unfair terms and conditions, unfair estate charges, the imposition of unfair insurance, as described by my noble friend Lord Stunell, redress schemes and commission fees. These are all things we will want to examine in Committee, as well as some of the late changes in transparency of reporting, which Opposition Peers successfully introduced in the final stages of the then Tenant Fees Bill. Therefore, we will look for opportunities to have, for example, a register of reasonable charges, enabling consumers to understand fair pricing and challenge unreasonable costs.

Like the noble Baroness, Lady Andrews, and the noble Lords, Lord Bourne and Lord Young of Cookham, we will also want to explore further how clear the definition of rent is. The Explanatory Notes say that the Act will capture any payment under a lease that does not impose an obligation on the landlord to provide a service but, in modern leases and case law, rent may have a broader meaning. I thank the Law Society for its briefing and concerns on this issue; I also thank Liam Spender of the LKP for his helpful blog on this matter. I look forward to the Minister’s clarification of the use of “assured shorthold tenancies” as described by the noble Lord, Lord Hammond of Runnymede.

This week, Jane Hewland, who I mentioned earlier and who was on “You and Yours”, will receive a bill of around £30,000. She has a flat with no facilities and no garden, and has had no explanation and no warning in advance. For her, and for millions of future leaseholders like her, we need to get on with this Bill and get to the main issue of the current 4.5 million leaseholders as soon as possible. Yes, these are baby steps, or piglet steps for the purposes of the noble Lord, Lord Blencathra, but I look forward to them being fully grown—and soon, please.

Social Housing

Baroness Grender Excerpts

Monday 24th May 2021 Lords Chamber

[Lord Greenhalgh (Con)]

My Lords, I have set out our programme, which is designed to increase the amount of social rented homes. I also point out that, over the last decade, the number of social homes has remained broadly static at around 4 million households.

[Baroness Grender (LD)]

Does the Minister accept that, if house prices rose by 2.1% in April—the highest monthly increase since 2004—making homes more affordable is simply not working? Those 4 million who are waiting for homes deserve a better answer. If this Government are all about levelling up, why are all the subsidies currently pushing up house prices? Would levelling up not be more achievable and better value if a greater subsidy were redirected into social housing?

[Lord Greenhalgh (Con)]

It is not all about demand-side subsidies. We have pointed out that the Government are committed to increasing the supply of affordable housing and are investing over £12 billion in the affordable housing programme over the next six years, which is the largest investment in affordable housing in a decade.

Rent Arrears: Covid-19

Baroness Grender Excerpts

Thursday 20th May 2021 Lords Chamber

[Lord Greenhalgh (Con)]

My Lords, we are aware of the exhortations from many organisations, but we consider that the increase in rent arrears is not statistically significant between the two surveys. It went from 7% to 9%. We also recognise that we have provided a substantial package of support for renters during the pandemic, including legislative protections and unprecedented financial support.

[Baroness Grender (LD)]

Does the Minister accept that loosening restrictions when 353,000 private renters are in arrears risks making families homeless, particularly while no-fault evictions are still in use? Even at this late stage, will he agree to meet Generation Rent to discuss a Covid rent debt fund, enabling renters to clear their debts and landlords to claim up to 80% of income lost, all at a fraction of the current subsidies for home owners?

Covid-19: Poverty and Mass Evictions

Baroness Grender Excerpts

Thursday 22nd April 2021 Grand Committee

[Baroness Grender (LD)]

My Lords, I congratulate the noble Lord, Lord Bird, on his moving opening speech, on securing this all-important debate and on his work during this pandemic, in particular the Ride Out Recession Alliance. As he rightly said, the greatest danger of homelessness is among people leaving the rented sector, particularly the private rented sector, but I align myself totally with the comments of the noble Lord, Lord Whitty, and the noble Baroness, Lady Blower, about the all-important safety net of housing for social rent.

On Monday, in this very Room, we debated the latest piecemeal approach to evictions—or “stopgap actions”, as the noble Lord, Lord Bird, described them. While there is a stay on bailiffs enforcing evictions at present, it is the mere tip of the iceberg. According to Generation Rent, as the noble Lord, Lord Whitty, just said, around 700,000 people have received an eviction notice since March 2020. Can the Minister tell us what information he is using to ensure that only the most egregious cases are currently ending in eviction? When Tim Farron MP asked for a process, such as a register of evictions from landlords, he was told that that was not an option. Why not?

Gemma Marshall, who lives in the West Country, has recently been served with her second Section 21 in two years. She has an autistic son aged nine who struggles with change. She and hundreds of thousands like her have been forced to move during this pandemic. What advice does the Minister have for those tenants, and when will we see an end to this arbitrary eviction process?

Finally, arrears are now one of the most significant challenges for both tenants and landlords, as we heard from the noble Baronesses, Lady Warwick and Lady Gardner of Parkes, and the noble Lord, Lord Whitty. Citizens Advice tells us that it would take an average of seven years for the people who come to it to pay off their debts. They desperately need a financial package; I support the noble Lord, Lord Young of Cookham, in asking for an investigation into the viability of the kind of packages that we have seen in Wales and Scotland. As the noble Baroness, Lady Andrews, and the noble Lord, Lord Shipley, said in reference to the Commons Select Committee, this modest financial package of between £200 million and £300 million pales into insignificance in comparison with the subsidy for home owners during this period. As the Resolution Foundation has pointed out, the majority of tenants now in arrears do not qualify for the current system of DHP support. By the way, on DHP, the £180 million has not been increased since the pandemic began.

We will hear some arguments about balance between landlords and tenants where the Government are somehow acting as the honest broker. I dispute that because, as the National Residential Landlords Association says, this Government are clearly breaking their promise that

“no renter who has lost income due to coronavirus will be forced out of their home.”

It is time to fulfil that promise and, as the noble Lord, Lord Bird, said, deliver a long-term plan.

Housing Strategy

Baroness Grender Excerpts

Wednesday 24th March 2021 Grand Committee

[Baroness Grender (LD)]

My Lords, it is always an honour to follow the noble Baroness, Lady Andrews, who gave us a very timely reminder of some of the Select Committee reports that have pushed the very issues we have discussed this afternoon. I congratulate the most reverend Primates the Archbishops of Canterbury and York—his return is most welcome—on securing this “Easter is the new Christmas” debate and thank other noble Peers for their valuable contributions. I also congratulate the most reverend Primates and their commissioners on this excellent report, Coming Home; long-term strategy and politicians are often complete strangers, and this is a valuable way of getting all parties to the table.

Having first worked with Professor Christine Whitehead at Shelter in the mid-1990s, it comes as no surprise to me that she and others on the commission have not, as the most reverend Primate the Archbishop of Canterbury said in his introduction, shied away from challenging the Church. I think that all parties which have had their hands on the levers of power over the past 40 years need to take a look back, challenge their own moments of power, take off the rose-tinted spectacles and understand how we got here and what we need to do to improve the situation.

When I first met Christine in the mid-1990s, the picture was very different. There were other challenges—new builds of social housing were rapidly disappearing and housing associations were increasing and coming into their own—but the private sector was not the wobbly and widely used crutch that it is now is for a whole host of poorer families who should not be there in the first place, as the noble Baroness, Lady Stroud, described, and it has doubled in 20 years, as the noble Lord, Lord Best, described so well. As we have seen with some of Shelter’s campaigns, they are often unwelcome customers when landlords refuse to accept anybody in receipt of benefits.

It is particularly sad to be debating this issue given the loss of one of our own yesterday: Lord Greaves, a champion of local government. I associate myself with the many tributes we have heard today. He was a strong advocate of localism and believed profoundly in community politics: the empowerment of individuals in communities to have a say over their own lives and destinies. I see that theme echoed in the report we are discussing today.

That this report lays down the challenge for parties to all work together is so important, and the answer to all the questions is of course “yes”, including on working together to change the charity rules.

Both the Conservative and Liberal Democrat 2019 manifestos committed to building 300,000 new homes per year. Labour, the Liberal Democrats and the Green Party also set an annual target of 100,000 new homes for social rent although, as my noble friend Lord Shipley pointed out, only 7,000 were built last year. The precise mechanisms by which we get there may vary, but the target remains the same.

However, just like social care, this debate often drops into the “too difficult” or “too expensive” column. As the noble Baroness, Lady Warwick, made clear, the disproportionate and eye-watering expenditure—the current expenditure on benefits, for instance, rather than the capital expenditure on bricks and mortar—continues to be such a waste and limits our potential to save. Why do you have to go back over 50 years, to 1969, to find the last time that over 300,000 new homes were built in the UK? All too often, landowners and developers are incentivised to sit on their hands and watch as their assets increase. If any Government change the rules, they will just hold tight until the next Government change them back.

The speeches today showed considerable agreement that the only way to crack the housing crisis is with a bold, long-term, cross-party commitment. I, too, pay tribute to the excellent conclusions of the Affordable Housing Commission of the noble Lord, Lord Best—and let us not forget that commissions of the charities Shelter and Crisis. All have concluded that building social housing is critical to underpinning any of these future strategies so that, regardless of tenure, people have safe, secure and affordable housing.

As I was writing this speech, I thought of the themes of this report as the six “S”s, or maybe the five “S”s plus. We agree to those standards; they are well put. On sustainability, I fear the cladding scandal of the future as today—right now—homes that are not up to the zero-carbon standard are being built. As the noble Baroness, Lady Warwick, pointed out, the cost of retrofitting will be disproportionately high and, yet again, a whole cohort of people will be placed in a shocking position. It will cost today’s new homeowners thousands to put right and I fear that we have learned nothing from the cladding crisis.

Yesterday, I spoke to someone who, just over a year ago, was encouraged and enticed to be a first-time buyer by this Government through the Help to Buy scheme. She saved everything she had to buy a flat in Manchester but, following the Grenfell tragedy, its cladding is now deemed unsafe, with a hefty bill of £50,000 to put it right. On what planet is she liable for that? Our party fully supports the words of the right reverend Prelate the Bishop of Manchester today and the earlier description of the vote in the Commons this week as a “grave error”. My noble friend Lady Pinnock will continue to work across all sides of the House to ensure that leaseholders are not made liable for the incompetence of others. I look forward to hearing the Minister’s response on this.

The most intriguing of the six “S”s is the aim of sacrifice, which is almost the opposite of nimby. I very much enjoyed the insight from the noble Lord, Lord Lilley, into the experience of being a constituency MP, where this area is often a challenge, and from the noble Baroness, Lady Bakewell, of being a local representative.

The sacrifice the Church of England has made is to offer more of its land for truly affordable housing developments. As we have already heard, 200,000 acres of land is enough to cover New York City. I applaud the Church’s change in strategy on the use of its land. In a debate in the Commons on 10 March, the Minister, Eddie Hughes, said that the Government are reviewing their land. Can the Minister share with us the planned timetable and methodology for this? Will it follow the pattern set by the work of the Church of England and Knight Frank? As the noble Lord, Lord Crisp, also mentioned, where is the other potential for this? What is the latest news on, say, MoD land, given our recent reduction in boots on the ground?

Land is a critical part of this equation, as my noble friend Lord Shipley described. I particularly welcome the description of community land trusts by the noble Baronesses, Lady Bakewell and Lady Stroud. If anyone has not been to see the development in Tower Hamlets, I would thoroughly recommend it; it is well worth a visit.

The value of a home goes beyond pounds and pence. That the Church might now be now free to decline the highest bid from deep-pocketed developers—and that “value” can be determined by impact on people, not profit—is a great example.

The past year in particular and the Covid pandemic have, as the noble Baronesses, Lady Goudie and Lady Andrews, said, thrown into the spotlight the significance of a home—a real home. Young children whom I know of in my community were incarcerated in small high-rise flats for the whole of lockdown. Older children went from bed, then got up and worked at their laptop —if they had one—then back to bed again. This is happening and has been happening. It is shocking. There have been even worse experiences in temporary accommodation, as described by the most reverend Primate the Archbishop of York.

Too many flats are wholly inadequate and many are unhealthy, some with social landlords from whom we should all expect better—like the Croydon flats featured on ITV this week—but often with the more unscrupulous, rogue and unregulated private landlords. Local housing is not set as a median rent, as is so rightly recommended in this report, but at the bottom 30%—and with a freeze coming down the track. This completely constrains tenants, particularly poorer ones, from exerting any kind of buying power or choice to hold their landlords to account. What a far cry from the decency and dignity described by the right reverent Prelate the Bishop of Newcastle. While the threat of Section 21 no-fault evictions continues, tenants in the PRS will not have the security that they need. Over the winter lockdown alone, even with a stay on the use of bailiffs, there were, I understand, 500 private renters evicted.

As the noble Baroness, Lady Warwick, pointed out, 8 million people live in unsuitable, unaffordable or unsafe housing, and are currently in need. That these homes may have contributed to higher rates of death due to overcrowding and poor conditions is something that the Government must fully commit to examining in any future inquiry into Covid-19; I hope that the Minister will do so today. As Inside Housing recently reported through its own work and through research by the Health Foundation, one in three households in England had at least one major housing problem related to overcrowding, affordability or quality going into the coronavirus crisis. Housing conditions have affected people’s ability to shield from the virus. We know of the success of Everybody In, which got rough sleepers off the streets and into accommodation. It saved hundreds of lives and avoided 20,000 infections, according to the NAO, in stark contrast with what happened in, say, New York City, where rough sleepers were put together into emergency shelters and the infection spread with dire consequences.

I hope that this commission’s ambitions—particularly for 20 years’ time and the visualisation of what it will look like—will become a reality. I simply ask the most reverend Primate the Archbishop of Canterbury to explain in a little more granular detail how he intends to knock heads together and get politicians round the table if all three of us say “yes” in answer to his questions.

I was surprised in the post-World War Two scenario that we were not given a sense of Macmillan—someone who was a businessman and understood the value of bricks and mortar and created truly affordable homes. It would be great to see something like that.

Joy and expectation is something that everyone should have when coming home. I hope that this becomes a reality.

Levelling Up

Baroness Grender Excerpts

Thursday 18th March 2021 Lords Chamber

[Lord Greenhalgh (Con)]

We can be very clear that the objective of levelling up is to deal with all the issues the noble Lord raises. The metrics are clear: for instance, the performance metric that I mentioned in my previous answer concerns the

“Economic performance of all functional economic areas relative to their trend growth rates”.

[Baroness Grender (LD)]

My Lords, in answer to Clive Betts on Tuesday, the Minister, Eddie Hughes, clearly stated that the way of measuring the success of this programme will be at a general election. Is it the intention to circulate table 2H, as previously mentioned? What is the open, accessible way that the electorate will be enabled to judge whether this programme is a success—or, indeed, not a success, as some of us suspect may well be the case?

[Lord Greenhalgh (Con)]

My Lords, I refer to my previous answer: there is a series of provisional outcomes and metrics. I just pointed to table 2H as an example of one that affects my department. Those metrics are then captured by departments in their outcome delivery plans.