Housebuilding: Target

Lord Best Excerpts

Wednesday 30th March 2022 Lords Chamber

[Lord Greenhalgh (Con)]

I look at whatever it takes to support councils in being able to build and shape their areas. An increasing number of councils are doing precisely that. This Government have enabled councils to borrow more liberally against the housing revenue account, but we will look at whatever measures we can to encourage local authorities to take a leadership role.

[Lord Best (CB)]

My Lords, the skills shortage in the construction industry is set to be a major problem for years to come. A solution is to attract more women into this industry, since, as your Lordships’ Built Environment Committee points out, only 4% of the construction trade’s roles are held by women. Does the Minister agree that, when rejuvenating the failed apprenticeships scheme, it would be particularly helpful if a special effort was made to recruit apprentices who are women?

[Lord Greenhalgh (Con)]

My Lords, of course we want to ensure that we get both men and women, and particularly women, involved in construction, but, as the Building Safety Minister, what I want to see above all is an increase in the quality and competence of the people who build our homes.

Building Safety Bill

Lord Best Excerpts

Lords Hansard - Part 2 & Report stage
Tuesday 29th March 2022 Lords Chamber

Moved by

[Lord Best]

86: Clause 115, in subsection (2) before paragraph (a) insert—
“(za) as if it contained provision authorising the appointment of a person (whether or not a leaseholder or a resident of the building) as a director of the landlord for a building safety purpose,”Member’s explanatory statement
The new clause “Building safety directors of resident management companies” which stands in the name of the Minister ensures that any restrictions in the Articles of Association of a residents management company are disapplied insofar as they conflict with the new power to appoint a professional director to discharge building safety duties. This amendment supplements that amendment by ensuring that any similar restriction imposed by a lease is also disapplied.

Building Safety Bill

Lord Best Excerpts

Lords Hansard - Part 1 & Report stage
Tuesday 29th March 2022 Lords Chamber

[Baroness Bennett of Manor Castle (GP)]

My Lords, I offer Green support for all these amendments, which have been so powerfully and comprehensively introduced. I am not going to go over any of the same ground but shall focus particularly on Amendment 2 in the name of the noble Lord, Lord Crisp, with full cross-party backing, particularly the wording,

“‘safety’ means the risk of harm arising from the location … of buildings”.

In some ways that might be seen to deliver the aims of two amendments that I tabled in Committee but have not brought back on Report, Amendments 132A and 132B, which would have delivered what has been called Zane’s law, targeting the issue of contaminated land and the risks that such land may represent to residents and others in nearby buildings. For those who do not know, Zane’s law refers to the tragic child Zane Gbangbola, who died and whose father was disabled when flooding carried contaminants from nearby land into their home.

If we had a safe location for every building, that would seem to deal with the issue. However, looking at our debate in Committee, I note that the noble Baroness, Lady Hayman of Ullock, kindly offered support for amendments in this direction. What she said then clearly sets out the problem:

“If we can identify the size and scale in every part of the country where contamination is, that would be a very logical starting point to prevent future risk to life and support local authorities in tackling the whole issue of contamination”.


In responding, the Minister suggested that the Building Safety Bill was not the right place to bring in Zane’s law because it would take the focus away from the environment and put it only on buildings. I think that she was right in that supposition, which is why I have not brought the amendments back now; the planning Bill, if indeed we see one, may well be the place to do that. However, where I disagree with the Minister—she was responding to my noble friend Lady Jones of Moulsecoomb, who kindly introduced these amendments as I could not be present—is where she noted that Section 143 of the Environmental Protection Act 1990

“was repealed, but it was replaced by Part IIA of the Environmental Protection Act 1990”.—[Official Report, 2/3/22; cols. GC 333-34.]

However, that was a significant downgrading of the protection and the powers offered by local authorities. It is worth looking at what was known as, perhaps rather unfortunately, the Red Tape Challenge: Environment Theme Proposals from March 2012, which effectively downgraded three-quarters of environmental regulation. Those changes to the guidelines said that they were

“anticipated to save business £140 million a year by reducing uncertainty about when land needs to be remediated”.

“Reducing uncertainty” is a phrase that needs to be re-examined and reconsidered.

I commend all the amendments, particularly Amendment 2, which focuses on the issue of the safe location of buildings. A great deal of regulatory work would have to be done to deliver that, which would include Zane’s law. If this becomes part of the Bill, the Government would have to look at that, but it would be a big step forward if we focused adequately on ensuring that—in this age of the Anthropocene and the climate emergency, in which new risks are emerging that were not present before—no one has a home or building in a place that is dangerous.

[Lord Best (CB)]

My Lords, I will briefly speak to support the amendment tabled by the noble Lord, Lord Crisp, and declare an interest as chair of Oxford University’s Commission on Creating Healthy Cities. I also declare my interest as a vice-president of the Town and Country Planning Association.

An obvious case of building safety impacting on health and well-being is surely the permitted development rights regime. Submissions to the Oxford Commission on Creating Healthy Cities have revealed widespread condemnation of the appalling building standards allowed via permitted development rights, which permit conversions of commercial and industrial buildings into accommodation without the need for normal planning consents. This has led to the creation of some ghastly, substandard new slums often on non-residential business parks full of safety hazards, with no facilities, no play areas for children and danger from traffic. Research at University College London reveals that a very large proportion of the well over 100,000 homes delivered through these permitted development rights have been substandard.

I am pleased that there has now been some regulatory change and requirements for at least some natural light and minimum space standards. However, this controversy has highlighted the importance of adequate space, sufficient daylight, protection from noise and a surrounding environment that is not hostile and unhealthy. That underlines the need for bringing together housing and health issues under the banner of minimum standards that recognise the broader definition of safety in the amendment in the name of the noble Lord, Lord Crisp. This would engage the new regulator in the process and require attention to be paid to health and well-being as essential aspects of the homes that we build and the places that we make. I support Amendment 2.

[Lord Stunell (LD)]

My Lords, it has been an interesting debate so far and I hope that I will not let the standard drop. Three excellent amendments have been proposed. I have added my name to Amendment 2 tabled by the noble Lord, Lord Crisp, but I could equally well have done so to the others as well. I look forward to hearing what the Minister has to say.

In different ways, the amendments all look at the strategic vision for what building safety should be and how it should perform. The noble Lord, Lord Foster, made a strong argument for widening the purposes of building regulations from the simple protection of life to the protection of property.

The noble Lord, Lord Aberdare, has renewed his persistent and well-justified point that there is a terrible shortage of performance from the construction industry, driven by its dysfunctional character—in particular, as he highlighted, the use of retentions in building contracts, which makes a collaborative process difficult to achieve in the industry. He referenced the Construction Playbook and what BEIS is doing. If the Minister is just going to say kind words to the noble Lord, will he also undertake to get the Department for Education to follow the Construction Playbook and get rid of retentions in the contracts that it signs? All the questions that I have asked of the Department for Education have been answered in a rather injured tone. It says that it is doing its best for the public purse—not while it continues to insist on retentions, which undermine the collaborative way the construction industry has to go.

--- Later in debate ---

[Baroness Fox of Buckley (Non-Afl)]

My Lords, I will speak to Amendments 36 and 46. I was pleased to hear the noble Lord, Lord Blencathra, be so kind about my previous comments, but then I remembered that it was not him speaking. I thank whoever said something nice about the points that I was making.

I feel slightly awkward because, in some ways, I should be saying that I had a win in Committee, but here I am again. Amendment 36 seeks to insert a clause that would mean that

“an accountable person must take … steps to achieve best financial value”

for leaseholders. It would require the Secretary of State to issue guidance to ensure that this duty is taken seriously. This is to focus the mind on the danger that we have seen throughout this Bill where, in the name of safety in a Bill taking on the grave injustice suffered by leaseholders of having to pay for building safety remediations, sometimes the solution inadvertently creates even more layers of disproportionate, overly cautious and risk-averse regulation and bureaucracy, which result in spiralling and never-ending sets of additional costs for leaseholders.

After Committee, when announcing the changes that the Government were making to the Bill, the Secretary of State, Michael Gove, said that they had listened to leaseholders’ concerns and were

“removing the requirement for a separate building safety charge and scrapping compulsory building safety managers, to help avoid unnecessary costs.”

Brilliant, I thought. When the Minister then told me that there would now be no building safety managers, I must confess that I was delighted. My amendment to abolish the building safety manager role was the first amendment that I had ever tabled and I had had a win. However, before I got the bunting out and allowed myself to indulge in any backslapping, I was brought to a pause by leaseholders, who noted:

“Small gains towards fairness, decency & common sense do not equal an overall ‘win’, the battle is v much ongoing!”


It is important that the Government have listened. A little like the noble Lord, Lord Blencathra, I should say that any caveats that I raise now are not intended to be churlish. However, it is precisely because I accept the assurances of the Minister and Michael Gove that they want to ensure that there are no unintended outcomes from the Bill in terms of avoidable unnecessary costs that I have tabled this amendment, which gives guidance a chance to push home the point that value for money for leaseholders is a very important thing.

This is not just about my fears around what might happen or leaseholders being paranoid. At a sector conference—Leasehold London 2022—Shaun Lundy, a chartered health and safety practitioner and a supporter of building safety managers, reflected on what removing that role would mean. He said that what worries him a bit is that some of the onerous duties are still there so, even if you get rid of the role, it still leaves a void over who will do the work. He worried out loud about the danger of creating “a disproportionate industry” and “another layer of bureaucracy”, especially in relation to the new duty to create safety case reports. He noted that, although some reports he had seen were sensible, others were completely over the top; he gave the example of a 50-page report costing £50,000 but with no tangible benefit. The building safety manager may therefore be dead but, for some, it is “Long live the building safety manager and their duties”. Dame Judith Hackitt’s call soon after Grenfell that it was not good enough to wait for a change in the law and that freeholders had to act has led to something of a panic reaction and has often been taken literally.

Just to give you an example, I will tell you the story of Aviva leaseholder Sarah from the Quadrant in Salford. With no law passed, her managing agent, Contour Property Services, has charged her and her fellow leaseholders for a building safety manager. What is more, it has appointed an additional building safety co-ordinator. In correspondence with the lease-holders, Contour writes of balancing “value for money” against taking

“appropriate measures to meet new safety requirements”.

Then the killer line tells them, almost casually as an afterthought:

“As a result of these appointments, there will be an increase in your service charges.”


There they are, in the small print, for the forthcoming year from April 2022 to March 2023. If you look at the small print in the bill, as I have, the building safety manager is there at £21,249.50. The cost of the part-time safety co-ordinator is £11,702.56 and this is charged to the leaseholders.

This might be blatant but, even if there is no direct mention of the building safety manager, it seems that they are lurking in the shadows, rebadged or slightly in disguise, but ever present none the less. The heavily administrative substance of the duties that they were meant to take part in remains in the Bill. Many of these duties are based on the precautionary principle, sadly interpreted through the prism of zero risk and often disproportionately focused on myriad possible risks rather than clearly defined dangers. In Sarah’s case, one of the listed duties is writing and maintaining the building safety case for the building, which shows that all the potential risks have been considered and mitigated. Never mind the cost of the building safety case itself, who will pay to resolve all the potential risks?

The question is whether the removal of the legal requirement to appoint building safety managers is strong enough to, in effect, stop them being imposed. This amendment asks the Government to note that the genie is out of the bottle, but the Secretary of State has the opportunity to ensure, in guidance, that the sector should not just rush to risk-averse costly solutions because they have once been suggested, but should instead focus on whether costs are proportionate to real risks and ensure that value for money is a barrier to costs just being dumped on leaseholders via service charges or other nefarious routes.

Of course, it is not all about money. We have to consider human costs, too. There is no point in knowing the cost of everything but ignoring the non-monetary value of homes for people, discussed so eloquently in the group beginning with Amendment 1.

Amendment 46 focuses on tightening the ability of freeholders, landlords and managing agents to force entry into leaseholders’ homes. When I raised this in Committee, there was understandable concern. People wanted to say, “What if there is an emergency? You need to be able to enter.” We can all think of such instances. I know that that happened with a burst pipe in a flat above mine, with water pouring into the flat below. You need to be able to get in to turn the water off, but this should be a last resort. This modest amendment simply aims to reinforce that point and to give leaseholders some power in that decision.

At present, despite limited rights for leaseholders, which have become increasingly clear since building safety issues came into the public realm, landlords have been under an implied obligation—as the ideal—to give the tenant or leaseholder “quiet enjoyment” of the property and they should not interfere with that. If you read the literature around building safety, you will discover an increasing clamour to challenge the idea that leaseholders have any rights to stop entry into their homes, presenting leaseholders as obstacles to safety.

For example, in the Safer People, Safer Homes: Building Safety Management report of a couple of years ago, there are complaints of

“Leasehold … units … purchased by their owners, who are not culturally accustomed to the notion that the owner … has any jurisdiction over their home.”

The landlords complain that access for owners and their agents is just too difficult. Extraordinarily and insultingly, the assumption is that, behind leaseholders’ front doors, they all behaving as fire hazards, irresponsibly ignorant of risks. Leaseholders are painted as ill-informed problems:

“Most will have no comprehension as to fire (or other safety) principles and their place in the matter.”


The report demands:

“Timely intervention on a statutory basis is needed to enable prompt access”


in order to

“monitor or assess risk and condition.”

My concern is that all these checks, monitoring and assessment will mean demands for entry beyond any reasonable bounds of common sense. Leaseholders themselves are anxious that the Government press home that this is not encouraged, and that the Government ask key questions of landlords.

Amendments 46 and 47 would restrict the power to enter people’s homes unless it was essential and would make it clear that the court must be satisfied that it was necessary to grant entry only in extreme circumstances, not just because an accountable person had sent a notice demanding entry for building safety purposes so vaguely defined that they could include anything from the overuse of scented candles to fridge inspections. I am just waiting for smoking in one’s home to become a listed fire risk, although I do not want to give that idea to the Government.

I make a final plea that leaseholders’ property rights are not just to be shooed away and a final reminder—one that I will return to later—that we should avoid pushing a narrative that assumes that all blocks of flats are inherently dangerous and at high risk of fires, creating a climate of fear that then justifies the surveillance and monitoring of leaseholders in their homes and the reorganisation of everyone’s lives around hypersafety and zero risk at great cost, both financially and in the human sense of civil liberties and privacy rights, to those homeowners who are unfortunate enough to be leaseholders as well.

[Lord Best (CB)]

My Lords, I shall say a few words on behalf of my noble friend Lady Grey-Thompson in respect of Amendments 13, 20 and 35, to which her name is attached. As the noble Baroness, Lady Brinton, explained, my noble friend sends her apologies; she is attending the thanksgiving service for His Royal Highness the Duke of Edinburgh in her capacity as chair of the wonderful Duke of Edinburgh’s Award scheme. I think we all agree that that event should take priority.

She wanted her thanks to the Minister and his officials to be recorded for the new amendment, which will require the regulator to report regularly on engagement with residents who are disabled. She has greatly welcomed constructive talks outside the Chamber and is keen to keep working with the Minister on personal emergency evacuation plans to meet the needs of people with disabilities so that they have correct and useful information and can feel safe where they live.

Amendment 86 in this group is in my name and that of the noble Baroness, Lady Neville-Rolfe. I will also comment on government Amendments 73, 85 and 263. In Committee, I raised the issue of leaseholders managing their own blocks of flats who would be given onerous new responsibilities for safety issues by this Bill. These new duties and liabilities could deter many from acting as the voluntary unpaid directors of their resident management companies and right-to-manage companies. These self-managed blocks depend on their volunteer directors to give up their time—and, indeed, risk falling out with their neighbours since not all their decisions will be popular with everyone—but who wants to risk a criminal prosecution and a criminal record for failing to carry out all the correct safety actions required of an accountable person by the Bill? Recruiting and retaining volunteers to be directors of resident-run companies is already difficult yet there is widespread agreement that more, not less, leaseholder control should be strongly encouraged.

The Minister has recognised the issue and brought forward government Amendment 73 to enable lease-holder-controlled companies to take on board a paid expert building safety director to provide this service to the company if, and only if, the leaseholders wish to delegate the job. Amendment 85 means that the cost of engaging that professional as the person responsible for building safety can be included in the service charges for all residents. These government amendments are very welcome; I thank the Minister very much for listening to the arguments and acting accordingly.

However, the Institute of Residential Property Management and the Association of Residential Managing Agents—they are now becoming a single entity, to be known as the Property Institute—noticed one obstacle to the Government’s otherwise excellent solution: quite a few resident-controlled companies prohibit the appointment of any director who is not themselves a leaseholder in the block. My amendment would address that point and enable an external expert safety director to be appointed in such circumstances, with necessary protections on costs and the ability to get rid of the building safety director if the arrangement does not work out.

Building Safety Bill

Lord Best Excerpts

Committee stage
Monday 28th February 2022 Grand Committee

Moved by

[Lord Best]

45: After Clause 72, insert the following new Clause—
“Appointment of third parties
(1) This section applies where—(a) a RTM company within the meaning of section 113, Commonhold and Leasehold Reform Act 2002,(b) a body corporate of whatever description where the majority of the shares are held by leaseholders of dwellings, or(c) a body corporate of whatever description which is limited by guarantee and the members of that company are also leaseholders of dwellings,is either the accountable person or principal accountable person.(2) Where this section applies, notwithstanding any provisions of the Memorandum or Articles of Association or any rule of law to the contrary, the company may appoint a third party to discharge all the functions of the accountable person or the principal accountable person who will assume all duties, powers, liabilities and penalties under this Act in place of the company, and this Act is to have effect as though references to the accountable person or principal accountable person were references to the third party appointed under this section.(3) If such a person is appointed then the company is empowered to re-charge and apportion the costs charged by such a person as if they were a service charge under the leases of the dwellings.(4) Such charges will, for all purposes, be deemed to be service charges within the meaning of section 18 of the Landlord and Tenant Act 1985, save that the provisions of sections 20 and 20ZA of the Landlord and Tenant Act 1985 do not apply.(5) The Secretary of State may by regulations impose conditions which must be satisfied before an appointment can be made under subsection (2).(6) Without prejudice to the generality of subsection (5), those regulations may include—(a) provision for a minimum level of professional qualification to be held by the third party,(b) provision for minimum levels of professional indemnity provision.”Member’s explanatory statement
This provision would enable leaseholder-owned or controlled companies to appoint an external professional to discharge the functions of the Accountable Person or Principal Accountable Person and for the costs of the same to be recoverable (and regulated) as if they were a service charge under the lease.

--- Later in debate ---

[Lord Best (CB)]

My Lords, this group should not detain us too long, for three reasons. First, the group has only one amendment, this one. Secondly, the issue here is not of the same complexity or magnitude as the all-important matters that the Committee discussed last Thursday. Thirdly, I think that the Minister will not take too long to accept it. Amendment 45, in my name and the name of the noble Baroness, Lady Neville-Rolfe, concerns the impact of the Bill on the management of leasehold property, in particular the management by the leaseholders who live there.

The amendment has the backing of leaseholders and of bodies representing those managing leasehold flats, the Institute of Residential Property Managers and the Association of Residential Managing Agents. I declare an interest as chair of the Government’s regulation of property agents—RoPA—working group, whose 2019 report provides insights into the arrangements for managing blocks of residential apartments. Amendment 45 seeks to prevent the Bill from creating a major problem where residents of blocks of flats have responsibility themselves for the collective management of their homes. It covers the residents management companies, where the developer has handed over ongoing management to the leaseholders, and the right to manage companies, where residents have exercised their right to take control under the Commonhold and Leasehold Reform Act 2002, on which, incidentally, I gave my maiden speech 20 years ago.

These resident-controlled companies will have a board of unpaid volunteer directors. The directors will sometimes decide to employ managing agents to carry out the usual management and maintenance tasks, but the legal responsibilities for their company’s actions will remain with the directors. The Bill as it stands places a new layer of responsibility on these resident directors: they must, together, assume the role of the accountable person or principal accountable person responsible for building safety. This makes each individual director personally liable if things go wrong. They may engage expert help, but they cannot shed their accountable person status and the full liability remains with them.

The directors will now have to identify safety hazards, decide on the remedies and procure the necessary works. There are plenty of opportunities for mistakes and the new building safety regulator could discipline them, fire them or fine them, ruining their personal reputations. Fellow residents could sue them for mismanagement or misjudgment. Indeed, under Clause 131, if residents do not feel that the residents management company has done enough to recover money from third parties, they can take them to court.

The entirely predictable but unintended consequence of placing this serious new burden on resident directors is surely that no one will volunteer for the role. Already it is often a hard job to recruit and retain willing volunteers, who must not only give up their time but risk falling out with neighbours when taking decisions that cannot please everyone. It is commonplace for directors looking for a new volunteer to be economical with the truth: “It won’t be very time-consuming or onerous”, they say. How much more difficult will the recruitment of new and the retention of existing directors become if this Bill adds considerably to the obligations placed on anyone who dares to volunteer?

Amendment 45 seeks to resolve the problem. It has two parts. First, it would allow the residents management companies and right to manage company directors, if they wish, to pass on the functions and liabilities of the accountable person or principal accountable person to an external, competent, qualified third party with proper professional indemnity insurance, which the directors could never obtain. Secondly, it would enable the directors to pass on the costs of so doing to the residents via the service charges. With this amendment in place, a significant barrier to leaseholders managing their own affairs will be avoided.

Successive Governments have consistently encouraged residents to assume mutual responsibility for managing their blocks of flats. Indeed, moves are in the pipeline to relaunch the so far unsuccessful commonhold arrangements, whereby the occupiers own the freehold as well as handling the management. So I am sure that there is no intention to impose a huge disincentive for leaseholders to participate in residents management companies and right to manage companies. By enabling the duties imposed by this Bill to be transferred from the volunteer residents to professional experts, a potential exodus of volunteers can be avoided and the encouragement for more resident control can be sustained. I hope, therefore, that the amendment is helpful in correcting an unintended oversight and that it will appeal to the Minister. I look forward to the contribution of the noble Baroness, Lady Neville-Rolfe, and I beg to move.

[Baroness Neville-Rolfe (Con)]

I support the noble Lord in his Amendment 45. He has described the issue very well—and given his huge contribution to the House, I shall look up his maiden speech.

I worry that unless we can find a way out for leaseholders who are also owners, no leaseholder in their right mind would contribute to the management of a building jointly owned by leaseholders. This has been a direction of travel in recent years, which I support. I believe it to be particularly valuable for smaller housing developments, of which we need more. As my noble friend Lord Young of Cookham said in Committee on 24 February, successive Governments have encouraged leaseholders to buy their freeholds. Indeed, he himself played an important part in that process. As I understand it, the leaseholders who have enfranchised and bought their freeholds are excluded from support under the Bill. That seems very unfair.

I know from direct experience in my own family that it is already very difficult to secure volunteers to run leaseholder-owned buildings, given the onerous duties involved and the time requirement. The Bill, with its additional duties and tensions, will, I fear, make it impossible. Here we have yet another perverse effect. I agree with the noble Lord, Lord Best, that a solution must be found by Report, either by accepting his amendment or, if need be, in some other way. This is an unintended consequence that nobody wants.

--- Later in debate ---

[Baroness Scott of Bybrook (Con)]

We absolutely understand the issue We are working on it. As I said, if we have a meeting, maybe we would have some ideas. I do not know about guidance yet, but we will make sure that we can have that discussion. I hope that we will get something better in place before Report.

[Lord Best (CB)]

Those final comments were the ones that I hoped to hear: that, with a bit of discussion, we may be able to find a way around this. The test for me is a real one. My son in a block of flats says, “Dad, should I think about being one of these directors?” My answer at the moment is, “Steer well clear. It is not a good idea to volunteer for this at the moment.” I look forward to those discussions and hope that we can come to an agreement. I beg leave to withdraw the amendment.

Amendment 45 withdrawn.

Building Safety Bill

Lord Best Excerpts

Committee stage
Thursday 24th February 2022 Grand Committee

[Lord Blencathra (Con)]

My Lords, I rise to move Amendment 13 and to speak to Amendments 14 and 15 standing in my name. First, I declare a personal interest in that I am a leaseholder in a block of flats near here which qualifies for remediation work; we may have wooden balconies and other bits and pieces not technically covered.

Quite simply, I have tabled these amendments because I believe that the penalties for big building corporations are ridiculously light. I accept that for the single trader plumber, electrician or brickie, the magistrates’ court might suffice, but I say to my noble friend the Minister that it is preposterous to permit the Persimmon or Berkeley Homes of this world to be taken to a magistrates’ court for breaches of the law and fined a mere £200 per day that the breach continues. Theoretically, a magistrates’ court could impose an unlimited fine for breaches of the amounts imposed, but those amounts are trivial. Contrast that to the Health and Safety Executive, where last year the average fine was £140,000 and it fined the National Grid £4 million. Not a single person was killed in that incident, but the HSE believed that the National Grid’s records were inadequate and fined it £4 million.

In 2019, the Competition and Markets Authority fined three construction firms £25 million, £7 million and £4 million for indulging in a concrete pipe price-fixing ring. In 2021, another two firms were fined £15 million for fixing groundworks contracts—and these companies were not the large, mega housebuilding firms we all know and love. If the CMA can impose those levels of fines on small and medium-sized companies which have not compromised safety, why on earth should we even countenance four construction monoliths—which, in 2020, posted profits of £3.8 billion—getting a fine of £200 per day for breaching building regulations? That is why I believe we need to hit them hard, and the penalty in my amendment is the construction cost of the building they broke the law constructing, and that cost would double for each month that they fail to remedy it.

Let us emulate the CMA, which says:

“In calculating financial penalties … the CMA takes into account a number of factors including the seriousness and duration of the infringement, turnover in the relevant market, any mitigating and/or aggravating factors, deterrence and the proportionality of the penalty relative to each company’s individual circumstances.”


I simply suggest, in conclusion, that if that is the modus operandi of the CMA, it should be the modus operandi when we are tackling huge building firms which have breached building regulations. The big corporations need to be hit hard. Our penalties at the moment may be appropriate for the single plumber and electrician but not for the Berkeley Homes of this world, to name just one. I beg to move.

[Lord Best (CB)]

In the absence of others, I rise to speak to Amendments 94A, 94B and 97A, which seek to strengthen the hand of the new homes ombudsman. At Second Reading, I congratulated the Government on introducing this new dispute resolution service. I noted just how important it was for consumers to have an accessible and effective means of handling their numerous complaints against shoddy workmanship, building defects and appalling service in rectifying these problems, not least by the oligopoly of volume housebuilders.

My concern has been that the new homes ombudsman will not have sharp enough teeth to deal with these powerful players, and at Second Reading I posed a number of questions to the noble Lord the Minister accordingly. He was able to give me some reassurance on the independence of the new ombudsman from the industry. The housebuilders will be required to fund the ombudsman’s costs and will have a major say on the New Homes Quality Board, which will oversee the ombudsman service and agree the code of practice to be used, but the Minister assured me that the independence of the ombudsman will be preserved.

Subsequently, I have received a lengthy and extremely helpful briefing from the chair of the New Homes Quality Board, Natalie Elphicke MP. From that it is clear that considerable effort has gone into ensuring the genuine independence of the new arrangements from the influences of the housebuilding industry. I am grateful for those reassurances and for other details of the work that has been going on behind the scenes, which I hope will now receive the publicity it deserves.

Only Parliament in statute can endow the ombudsman with legal powers, and two of my amendments before the Committee today are intended to bolster the ombudsman’s jurisdiction to achieve better behaviour by the housebuilders. At present, the Bill makes provision for the ombudsman to make “make recommendations” about changes that developers and housebuilders should make to improve standards of conduct or standards of quality of work where,

“following the investigation of a complaint the ombudsman identifies widespread or regular unacceptable standards of conduct or standards of quality of work”.

This is good stuff, and making recommendations to this end is an admirable task for the ombudsman. However, making recommendations is not the same as placing requirements upon the builders to up their game. Amendments 94A and 94B add a power for the ombudsman to go further and place “improvement requirements” on the members of the scheme—that is on all the builders and developers selling homes, where widespread unacceptable standards of conduct or quality of work are found.

Amendment 97A seeks to strengthen the ombudsman’s hand in another way. At present, the remit of the ombudsman only covers any faults, defects, snagging problems and so on during the first two years after a new-build home is purchased. Certain defects that emerge after two years would be the subject of a claim under the 10-year warranty, which is a compulsory part of the sales process. The trouble with this cut-off of two years for the ombudsman is that the warranties thereafter do not cover all kinds of issues that may not be catastrophic defects but are, none the less, aggravating problems that can cause endless anxiety, annoyance and cost to the purchaser.

One example is that roofs are not covered when properties are converted into new homes. A more commonplace example might be a buyer trying to get a French window repaired or replaced who raises this with the builder within the first few months but does not take it to a formal complaint to the ombudsman until after the two-year time limit is up. Or the buyer has a plumbing problem that gets fixed but returns, gets worse and finally leads to an ombudsman complaint, only to discover that the issue is now too late to be considered.

Amendment 97A would enable the owner to take a complaint to the ombudsman up to six years after the property was first purchased, where the complaint cannot be dealt with under the warranty. It will not be possible to complain about the warranty to the Financial Ombudsman Service, which handles redress in relation to warranty providers, because these warranties do not cover snagging and minor defects. Most warranties are pretty tightly drawn and some are worse than others. There is a strong case for giving the ombudsman the power to insist upon all warranties satisfying proper quality standards.

But specifically in relation to the housebuilders, what the consumer needs is for their complaint about the multiplicity of things that the builder gets wrong to be handled by the new homes ombudsman without the buyer being told that they are out of time. The purchaser may simply have been giving the builder the benefit of the doubt, or the particular defect may not have emerged immediately, or the buyer was just not sure of their rights. Two years is simply not long enough. Six years matches the traditional time for liability in other circumstances, as in the Defective Premises Act. The Legal Ombudsman, for example, will investigate claims up to six years after a relevant incident is reported.

While not detracting from my congratulations to the Government on bringing forward the proposals that will create a much-needed new homes ombudsman service, I believe that these amendments—which would place requirements for better behaviour on all house- builders and support the consumer for six years, instead of two, after their purchase—would sharpen the ombudsman’s teeth and help ensure that the new arrangements can make a real difference to the performance and behaviour of this industry.

[Baroness Pinnock (LD)]

My Lords, we were waiting for the government Minister to introduce his amendments, so that we can then respond.

Building Safety Bill

Lord Best Excerpts

2nd reading
Wednesday 2nd February 2022 Lords Chamber

[Lord Best (CB)]

My Lords, my contribution to this debate relates to the new homes ombudsman, the scheme that will be established by the provisions in Part 5 of the Bill. I declare past interests as the previous chair of the Property Ombudsman and chair of the Government’s working group on regulation of property agents.

Among the catalogue of criticisms of this country’s major housebuilders, redress for buyers of defective properties and victims of shoddy workmanship, scams and dodgy deals deserve our urgent attention. We are all familiar with the long list of ways in which the volume housebuilders have let us down—building safety, yes, but also poor design, low space standards, soulless estates, broken promises to provide affordable homes, exorbitant profits and bonuses for bosses, leasehold scams, sales agreements that contain unfair conditions and excessive charges, lack of investment in training, skills, and apprenticeships, building on greenfield sites when brownfield development would be far more appropriate, and building out only at a speed which ensures continuing scarcity and ever-higher prices. We need also to confront housebuilders’ defective workmanship and dreadful consumer/customer service in responding to entirely justified complaints by home buyers. It is excellent that the Government are seeking in this Bill to address this issue.

The proposal for a new homes ombudsman came from two reports by the All-Party Parliamentary Group for Excellence in the Built Environment, supported by the Construction Industry Council. I declare my interest as a vice-chair of that APPG alongside my noble friend Lord Lytton. Our first report, in 2015, entitled More Homes, Fewer Complaints, commended the idea of a new homes ombudsman. Our second inquiry, in 2018, spelled out how an ombudsman could drive up standards and improve consumer rights. It was skilfully chaired by Eddie Hughes MP, who is now the very Minister responsible for implementing the initiative. He says in his foreword to our report:

“I have been contacted by many MPs with despairing constituents who have implored them to help achieve redress from housebuilders refusing to rectify poor workmanship … Consumers desperately need greater leverage to drive a change in this culture”.


Submissions received by the inquiry from home buyers described how builders failed them, making buying a new home, as one first-time buyer said,

“the worst decision of their life.”

Surveys show that well over 90% of home buyers have experienced snags or defects when moving in, and in over 70% of those cases the problem has never been fully resolved. We are a very long way from zero-defect construction. It is quite extraordinary that the new house buyer has to expect snagging difficulties, problems with doors and windows not fitting properly, leaks and cracks. If cars—vastly more complicated things than houses, with thousands of working parts and the capacity to travel safely at speed—can be purchased without defects then why not static, solid, basic houses?

So it is very good news that we are now to have an ombudsman to whom the home purchaser can turn. There have been concerns over the suggestion that the industry-based New Homes Quality Board, rather than the Secretary of State, might appoint the ombudsman and write their code of practice. This could undermine public trust and lead to accusations that the housebuilders were pulling the strings.

My short list of questions today to the Minister, whom I congratulate on bringing forward this legislation, relates to the powers that the new homes ombudsman will possess. In essence, I am asking: will the ombudsman have real teeth?

First, could the Minister confirm that the new homes ombudsman will have the power to expel a housebuilder from the redress scheme—for example, for non-payment of compensation to a buyer—and that this would mean, quite properly, the ombudsman having the power to stop any further sales by a builder since they could not continue to sell homes if no longer in the scheme?

Secondly, will the ombudsman be able to award high enough levels of compensation to deter bad practice?

Thirdly, in common with many ombudsman schemes, will this ombudsman have the power to undertake own-initiative investigations around issues likely to justify multiple complaints, without each complainant having to make a separate case, and will it be able to publish guidance accordingly?

Fourthly, to avoid sharp practices and eliminate detrimental clauses in the small print, will the ombudsman be able to require the use of standardised sales contracts?

Fifthly, can it be that the ombudsman will have jurisdiction only for the first two years after a purchase, bearing in mind that defects often emerge after that date and that warranty providers exclude all the builder’s smaller defects that can make life miserable? The Legal Ombudsman, for example, can take action up to six years after a problem has been identified.

Sixthly, will the ombudsman be able to specify that builders use only approved warranty providers that have passed a rigorous assessment?

Seventhly, will the ombudsman be able to ban non-disclosure agreements—“gagging orders”—which some builders, for fear of gaining a poor reputation, have insisted on from buyers whose homes have been subject to remediation?

Eighthly, will the ombudsman publish its decisions, to name and shame offenders and exonerate the others?

Lastly, will the ombudsman be able to extract a sufficient levy from the housebuilders to resource all the work necessary to deal with what I suspect will be a multiplicity of complaints from all over the country?

I look forward to hearing the Minister’s response and, I hope, to being able to support this important ingredient in the Bill.

Regulation of Property Agents Working Group

Lord Best Excerpts

Wednesday 20th October 2021 Lords Chamber

[Lord Greenhalgh (Con)]

My noble friend should note that the Government welcome the final report of the independent Regulation of Property Agents Working Group, chaired by the noble Lord, Lord Best. The Government have been clear about the need to raise professionalism and standards among property agents, which is why we tasked a group of experts from across industry, led by our highly experienced chair, to advise on the best way to secure this objective. The working group’s report and recommendations are an important development towards ensuring that all consumers are treated fairly and all agents work to the same high standards.

[Lord Best (CB)]

My Lords, as noble Lords have mentioned, I chaired the Government’s working group on regulation of property agents. I am very grateful to the noble Baroness, Lady Hayter, for her sterling ongoing work on this issue. Bearing in mind that the leading industry bodies for estate, lettings and managing agents were all on our working group, as well as consumer experts; our recommendations for a regulator of property agents were unanimous and favourably received by Ministers; the cost of a regulator would fall on the industry rather than on the Government; and I delivered our report over two years ago, may I press the Minister to confirm that there will at least be news of the necessary legislation within six months?

[Lord Greenhalgh (Con)]

I take this opportunity to pay tribute to the work undertaken by the noble Lord on the wide-ranging recommendations contained in the final report from his working group. I am grateful to him and to all those who contributed. However, he will appreciate that this is a complex area with many interdependencies. Having paused work on it at the height of the Covid-19 pandemic, we continue to consider the recommendations in the noble Lord’s report.

Leasehold Reform (Ground Rent) Bill [HL]

Lord Best Excerpts

Committee stage
Wednesday 9th June 2021 Grand Committee

Moved by

[Lord Best]

4: Clause 2, page 3, line 7, at end insert—
“Retirement homes where development has begun prior to commencement
(12) A lease is an excepted lease if it is a lease of a retirement home, and—(a) a contract to purchase the land to develop retirement homes was agreed before 1 April 2021, and(b) development of the homes began before the relevant commencement day under section 25(4).(13) A lease is a lease of a retirement home if—(a) it is a term of the lease that the premises demised by the lease may be occupied only by persons who have attained a minimum age, and(b) that minimum age is not less than 55.”

[Lord Best (CB) [V]]

My Lords, I thank the Homes for Later Living group for its briefing on the issues that I shall raise. I greatly welcome the Bill, and congratulate the Government on taking the bold step of getting rid of ground rents. I know there is more to come in this space, and I look forward to further legislation to assist existing leaseholders in the future.

This amendment is intended to tidy up an anomaly in the Bill relating to the provision of retirement housing. I declare my interest as co-chair of the APPG on Housing and Care for Older People, and chair of the five inquiries flowing from the so-called HAPPI initiative—Housing our Ageing Population Panel for Innovation.

I shall set the amendment in context. Retirement housing is an important but very small part of the housing scene. It seeks to meet the needs of older people who want to “rightsize”, usually from a family house and garden to somewhere easy to manage and inexpensive to heat, with space and light and without stairs and obstacles, where care can be delivered if need be—and, importantly, with the opportunity for company and companionship, in these times when loneliness is a problem for so many.

By moving in later life, older people not only avoid the struggle and cost of maintaining a large property, and prevent the need for an expensive and unpopular move into residential care, but bring a much-needed family home on to the market. The house buying and selling chain that follows means that a young family, too, can access the home they need. The nation gets two for one. Yet in the last year before Covid, of around 200,000 homes built, only about 7,000 were tailor-made for later living—down from 28,000 in the recent past. That output is far short of the numbers needed, with surveys indicating that nearly 4 million people over pension age would be interested in downsizing—or rightsizing—if the opportunity were there.

I have been anxious to see whether the Bill assists or undermines the already very low level of new home building for older people. As it stands, there is a danger that it will have a negative effect on that sector, because ground rents currently play a special and different role in such schemes. The specialist developers of retirement housing have had a tough time competing with the volume housebuilders, which make bigger profits, and so pay more for sites, by concentrating on younger buyers who are less discerning and often desperate to move.

Retirement housing cannot take advantage of Help to Buy subsidies, or the ongoing stamp duty relief for first-time buyers. Importantly, retirement accommodation must include extra space for communal facilities—a clubroom, a garden area and a range of other facilities in assisted living and extra care schemes, such as a restaurant, a treatment room, accommodation for care staff and a guest room. Space for those items can add up to 30% of the total cost of a residential development.

The cost for a scheme of 40 apartments is likely to be between £1 million and £2 million. This is where ground rents come in. They have not been, as they are in other housing schemes, payments of “something for nothing”. When capitalised and sold to investors, they have been the means of funding the extra capital costs of the communal spaces inside and out. As I said at Second Reading, they have been “something for something”, and have represented an alternative to a higher purchase price, which would be entirely justified, but which can put off buyers in this sensitive marketplace and debar those unable to afford the extra cost.

Why, you may ask, cannot service charges cover the capital costs in retirement housing, instead of using ground rents? The existing rules on what goes into a service charge—which can, of course, cover the ongoing revenue costs of communal facilities—mean that it is impossible to use a service charge to pay for these extra capital costs. This is as it should be.

--- Later in debate ---

[Lord Best (CB) [V]]

My Lords, I am grateful for all the contributions to the debate on the amendment. Perhaps I may respond to them all.

The noble and learned Lord, Lord Mackay, and the noble Lord, Lord Naseby, asked whether an age limit of 55 is sensible. It was chosen by the Government and is the age chosen by a number of retirement housing schemes. I agree entirely with the sentiments expressed by the noble Lords on that. Having had some responsibility for developing such schemes, I know that people actually move in in their 70s, not their 50s. The sometimes vain hope is that the scheme will attract a few younger people in order to get a mix of ages throughout. Indeed, sometimes people with disabilities who are in their late 50s are ideal people to move in. But the reality is that despite an age restriction of 55, people will only actually move in in their 70s. However, the flexibility has worked quite well also.

Other noble Lords were more sceptical. I hope that perhaps if they have a good look at Hansard, they might be convinced that there is a “something for nothing” versus a “something for something” debate here and that this particular kind of housing has achieved something for something with ground rents in the past and the transition to a future in which it has to do without that will present some problems.

As the noble Lord, Lord Lennie, and the noble Baroness, Lady Grender, said, it is probably the case that, in the longer term, there will be more transparency in a higher purchase price. It means that people will have to fork out more at the beginning—they cannot spread it over a period of years with a ground rent—but it will be more transparent. If some people cannot afford it, that is a casualty along the way, which I am sorry about, but it will lead to greater transparency in the longer term.

In the meantime, there are developments in the pipeline that are a cause of actual concern and difficulty. I am grateful to the Minister for his comments. He made it clear that this sector was given quite a clear steer back in 2019 that it could carry on as it was with new developments because this ban on ground rents would not affect it and it would be exempted. I agree with the change of mind that followed. It is right that all people are dealt with the same, younger and older alike, and that there will be no ground rents in the future.

I am happy with that, but it does leave the providers of later living housing rather high and dry. Although they have been given until April 2023—a similar period to that for housebuilders building for younger households—it is a fact that they need a bit more time. The buyers in this particular marketplace are right to be discerning, but it does take longer and there will be a problem for the relatively small number of 180-odd developments and about 4,200 homes affected, for which the transition is just not long enough. We will have weird situations where there are two kinds of occupier in the same development, some paying ground rents and some not, and the producer of the scheme having some financial and management difficulties accordingly. It would be quite simple to help them on their way and encourage this sector to develop, rather than discourage it, which I fear is the outcome at the moment. However, I am happy to withdraw the amendment at this stage and thank all noble Lords who participated in the debate.

Amendment 4 withdrawn.

Social Housing

Lord Best Excerpts

Monday 24th May 2021 Lords Chamber

[Lord Greenhalgh (Con)]

My Lords, we have set out a distinct part of the programme to deliver more social rented housing. We are looking to deliver some 32,000 units over the course of the programme.

[Lord Best (CB) [V]]

Has the Minister considered the Affordable Housing Commission’s proposal for a fund to enable private landlords who want to exit the market to sell to housing associations or councils, which can carry out the necessary upgrading and re-let the property at affordable social rents, thereby achieving a much-needed increase in social renting and saving public funds spent on unsatisfactory temporary accommodation, while rescuing private landlords who want to sell up?

[Lord Greenhalgh (Con)]

My Lords, the Affordable Housing Commission’s September report proposed a fund to support social housing landlords to acquire both existing private sector stock and new-build stock from private developers. Through the affordable homes programme, we already allow social housing providers to use grants to acquire from developers market-sale properties that are above their existing planning requirements.

Leasehold Reform (Ground Rent) Bill [HL]

Lord Best Excerpts

Monday 24th May 2021 Lords Chamber

[Lord Best (CB) [V]]

My Lords, I congratulate the Government on bringing forward this Bill, with its central proposition to get rid of ground rents for leaseholders. These charges represent payment of “something for nothing” and, when capitalised and sold on, have netted an undeserved windfall bonus for the housebuilders. As the Minister noted, some of the housebuilders have exhibited greed and a complete lack of transparency in charging ground rents that escalate alarmingly.

My maiden speech in your Lordships’ House, nearly 20 years ago, was in the Second Reading debate on what became the Commonhold and Leasehold Reform Act 2002. I expressed the view that this legislation would mean that commonhold would, in time, largely replace conventional leasehold, to the great benefit of occupiers. How wrong I was. Commonhold has never taken off because the oligopoly of volume housebuilders has prevented its growth by offering only leaseholds with ground rents that give them spurious additional profits.

I greatly welcome the imminent end to ground rents. This will enable a much-needed reawakening of the commonhold model, and I am delighted that the Minister has set up a task force to explore the next steps for commonhold. Of course, ground rents will remain problematic for existing leaseholders, so we must look forward to the Government introducing measures to help these occupiers too.

I have two, more specialist points. First, there are some different considerations relating to ground rents for developments exclusively for older people. I declare my special interest as co-chair, with Peter Aldous MP, of the All-Party Group for Housing and Care for Older People. There is a dearth of purpose-built accommodation designed specifically to provide the manageable, accessible, comfortable and sociable retirement accommodation for older people wanting to “right-size” and avoid loneliness and isolation. I am keen, therefore, not to undermine those companies selling well-designed new retirement homes.

Although I know of serious complaints in times past about service charges from the less reputable of these housebuilders, their ground rents can represent “something for something”. When the freeholds are sold on to investors, the sum raised can pay for the capital costs of more spacious communal areas: perhaps a meeting room with kitchen facilities, shared garden areas and so on. While these capital costs could be funded by a higher purchase price, there is a sensitivity that the total price may then deter some purchasers. Moreover, as I read it, the Bill means that these extra costs could not be covered by any form of ongoing charge, any addition to the service charge. So meeting the additional costs of extra space and amenities could be problematic.

This is compounded by the issue of timing for sales of retirement housing schemes. Because the Bill provides a breathing space right through to April 2023, most of the homes where a site has already been acquired will be sold before the ban on ground rents becomes law, so, in negotiating the land purchase, the developer can take account of the absence of any ground rent. But the sales process is often very slow for retirement properties, as I know from experience in housing associations that have sold retirement homes, because older people are much harder to please than young buyers. They will take their time before committing themselves to a purchase. Almost always, and very properly, they want to inspect their potential home when it is fully finished, rather than buying in advance after seeing a show home. They may even want to meet up with the scheme’s manager before taking a final decision.

This means that there will be some retirement housing developments that have not been fully sold out by April 2023, but for which the land had been bought in good faith, with planning consent, before the Government’s decision to end all ground rents was announced in January 2021. In these cases most of the apartments in a retirement development are sold, but a handful are yet to go. Where that happens there will be the anomaly of most occupiers continuing with a ground rent, but later purchasers living next to them not paying these charges. Could the Minister see whether it might be relatively simple to incorporate an amendment to the Bill that exempts from the ban on ground rents that small number of retirement apartments where the developer/housebuilder had started construction works by January 2021 but has still not sold all the apartments by April 2023?

My final issue concerns the property agents handling leaseholds: the estate agents who sell them and the managing agents who collect the ground rents. I had the pleasure of chairing the MHCLG working group on regulation of property agents—RoPA—which, as requested by the then Housing Minister, reported in July 2019. We raised concerns about leasehold and freehold charges, and we made recommendations to government for improvements to this unregulated sector to protect consumers and raise standards.

Improving the lives of leaseholders depends not just on the legal framework, of which the ground rent issue is an important aspect, but on the performance of the property agents who, day by day, manage the properties. Indeed, these managing agents are in the front line of the new arrangements for fire and building safety, for which other legislation is before Parliament and which will involve spending billions of pounds, much of it public money, on leasehold property. Although there are some highly professional and thoroughly commendable firms of managing agents, shocking tales abound of managing agents who behave badly, often with leaseholders ignorant of the misdemeanours because of a lack of clarity, transparency and accountability on the part of the agents.

The RoPA report spelled out exactly how this sector could be properly organised and regulated to protect consumers by licensing agents, requiring qualifications and adherence to a code of practice. Our report was unanimous and came from a group representing the key professional bodies, trade associations and consumer representatives. I believe that the Government remain committed to professionalising this sector, and it would be very helpful if the Minister could tell the House where his Ministry has got to in progressing the RoPA 2019 recommendations.

In conclusion, it is great that the Government are now on the case and taking forward significant improvements for leaseholders. This is the start of an important journey, with more yet to come.