Leaseholders: Management Companies

Lord Campbell-Savours Excerpts

Monday 20th May 2024 Lords Chamber

[The Lord Speaker (Lord McFall of Alcluith)]

My Lords, the noble Lord, Lord Campbell-Savours, is participating remotely.

[Lord Campbell-Savours (Lab) [V]]

My Lords, in conditions where leaseholder landlords living overseas remain uninterested in block management—their only interest being the rent—where in the Bill is the legal obligation on managing agents to supply management committees with the valid names and contact details of these overseas landlord owners, enabling the seeking of their support for an RTM? Where, with notice, absentee landlords fail to indicate whether or not they support an RTM, surely their interests should simply be ignored. Indifference should not block progress.

[Baroness Scott of Bybrook (Con)]

My Lords, we are looking more closely at this issue, because the noble Lord is right—sometimes it can be more difficult. We have also recognised the participation rates, which can be affected by foreign owners. We have listened to the arguments raised in Committee and by MPs in the other place, and we will continue to consider the issues raised.

Social Housing: Right-to-buy Sales

Lord Campbell-Savours Excerpts

Thursday 18th April 2024 Lords Chamber

[The Lord Speaker (Lord McFall of Alcluith)]

My Lords, the noble Lord, Lord Campbell-Savours, will be participating remotely.

[Lord Campbell-Savours (Lab) [V]]

Has not the now overreaching transfer of housing from public to private sector landlords led to an explosion in rents, costing billions in increased housing benefit? Why should housing authorities be forced to pay for problems created by this strategy, when there is talk of losing a proportion of the capital receipts they desperately need to help fund housing for the homeless—a problem created by the Government? It seems to me that the only beneficiaries are to be private landlords and the Government’s PSBR, while the losers are the poorest in society.

Leasehold and Freehold Reform Bill

Lord Campbell-Savours Excerpts

2nd reading
Wednesday 27th March 2024 Lords Chamber

[Lord Campbell-Savours (Lab) [V]]

My Lords, I congratulate my noble friend on the Front Bench on her very comprehensive canter around the course of reform, and I look forward to meeting her during the proceedings on the Bill, if at all possible. I too give a cautious welcome to aspects of the Bill. I say “cautious” because I believe that a lack of political courage and clarity of purpose at this stage at least to commit to the issue of enfranchisement under a more acceptable form of tenure has created a lot of anxiety. I will return to this issue later in my brief contribution.

I should confess to some experience in some areas covered by the Bill. In the 1970s, I purchased the freehold on my London home, a seamless process which worked fairly well. Also in the 1970s, on acquiring offices in a Lancashire town, I found myself in a quagmire of lease complications over leased accommodation with both office and residential leases. It seems I had inadvertently acquired a series of subleases, which I managed to dispose of to a number of grateful lease-holders at no cost to them. I have never had any desire to be a landlord.

More recently, I, along with other flat owners, after protracted and expensive negotiations and days in a leasehold tribunal, acquired the freehold to our flats outside London. The experience of sitting through days of these hearings at great expense has given me front-line experience of the process of enfranchisement. However, a far greater interest in terms of this Bill is the experience and knowledge I gained while an MP over attempts to purchase the freehold of a London flat used for attending Parliament.

In that case, over half the block concerned was owned by persons overseas, and many of these owners held their London assets in the name of nominee companies, either in tax havens or in the Far East. At that stage, there was no way to crack that wall of secrecy. The managing agents pleaded client confidentiality. In effect, they could do what they wanted. So why did we want to buy? I saw the service charge rise in 17 years, from just over £2,000 a year to nearer £10,000 today, so I just sold up. The scandal of escalating service charges is not only hitting London, it is now hitting flat resale prices in many of our great northern cities. The evidence is to be found in property auction prices at Cluttons, Nationwide and Savills, to name but a few. Escalating service charges are at the heart of arguments over the Bill, and I greatly welcome those provisions in it that provide for greater transparency.

I have always believed that transparency influences conduct. It stands at the heart of my whole approach to political life. For example, just imagine what arguments are going to break out when leaseholders learn of the percentage uplifts being added to their bills for contractual services, maintenance costs, insurance premiums and variable admin charges. I have never seen a leasehold title service charge notification which reveals top-slicing percentages. The question is: how will service charge companies compensate for their lost revenues? Will it simply fall on increased account-handling charges?

I return to the issue of title. This appears to me to be the issue of most concern in the property market. I have had some very interesting conversations on this area of thinking, as set out by Michael Gove over recent days. The letter from the Residential Freehold Association is what alerted me. I quote:

“The proposed cap on ground rents would represent a retrospective interference in the value of legitimate investments made by institutional and private investors, and could wipe out almost the entire value of investments into ground rents. The Government cannot illegitimately reduce the value of these investments without compensating the investors, who will be entitled to, and will seek, compensation for the loss of value they will suffer. Interfering with investors’ existing contractual income streams will lead to a high rate of insolvency for landlords, leaving thousands of buildings in England and Wales without a functioning landlord”.


I do not think the association has really grasped the scale of public anxiety and abuse deployed in property portfolio administration by some of its members. There is a very controversial message there, and while it may be exaggerated, it does need a response from the Government. I think it needs to be corrected. We now hear reports of ground rent investments falling. They are increasingly being offered on property auction sites, and I worry that innocent buyers are picking them up in the expectation of long-term income returns, without realising the possible long-term negative effects on their investments.

The Government are not sending out a clear message. I have been able to talk to auctioneers marketing these products, who all report a nervousness in the market, with the only real interest, interestingly, coming from those investors who lack the savvy to do their homework —primarily investors from overseas. I have also had the opportunity to talk to one investor who commands a very substantial portfolio in the area that we are talking about. It was a difficult message for me, as he described in detail his concerns over what he regarded as expropriation. He foresees the collapse of his portfolio. The question is: what are we to do with this group of investors, some of whom are ethical in their dealings, and others whose approach has been thoroughly exploitative?

I want reform and an end to exploitative leasehold practices, but, equally, I want fairness. Confiscation cannot be on the agenda, but I want reform. This is obviously a very difficult issue for the Government. I suspect it will be all left to the incoming Labour Government to sort out. I suppose, in truth, that I want a review of all forms of title. The system removes the speculative [Inaudible]. That is a tall order.

I speak in the [Inaudible]. After about 4.30 pm each day, I start believing [Inaudible]. Reliability of transmission to the Chamber is impossible in terms of participation, especially in Committee, which invariably comes later in the day on all Bills going through Parliament. I will do my best to intervene when I can, although I shall be following the whole debate, which I find extremely interesting.

Leasehold Reform

Lord Campbell-Savours Excerpts

Thursday 11th January 2024 Lords Chamber

[The Lord Speaker (Lord McFall of Alcluith)]

My Lords, the noble Lord, Lord Campbell-Savours, is participating remotely.

[Lord Campbell-Savours (Lab) [V]]

Is not the simple, unvarnished truth that, on leasehold for flats, the Government are under intense pressure from powerful institutions, which have sunk millions into freehold title, to duck the big decision and delay? The Government’s response is to leave it to the next Government to sort out. Is it not no more than an income stream for lazy investors, greedy developers and pension funds, all of which are squeezing the Government through political pressure to back off, while leaseholders pay the price? Labour will sort this out.

[Baroness Scott of Bybrook (Con)]

That is not the case. If noble Lords have listened to some of the things that the Secretary of State has said in the last many months, they will know that we are committed to changing this. It is complex, and we will take our time and do it properly.

Homelessness

Lord Campbell-Savours Excerpts

Monday 18th December 2023 Lords Chamber

[The Lord Speaker (Lord McFall of Alcluith)]

My Lords, the noble Lord, Lord Campbell-Savours, is participating remotely.

[Lord Campbell-Savours (Lab) [V]]

Does this Question not take us right back to the price of land for affordable housing? In Nijmegen in Holland, the Waalsprong urban extension of 11,000 homes is being built on 3,000 acres of land acquired at agricultural prices. Similar is happening at Hammarby, near Stockholm in Sweden. Why do we insist on paying landowners inflated land compensation prices when the country needs to house our growing population? We need new thinking on land for affordable housing—it is quite simple.

[Baroness Penn (Con)]

My Lords, the issue of land ownership and transparency is one that we have debated before. One measure that the Government have taken forward in the Levelling-up and Regeneration Act is greater transparency over not just land ownership but the contractual controls over land that allow councils, developers and other people seeking to build more affordable housing to have a better idea of what land is available and in whose control it is, so that they can take forward their plans and be more effective.

Local Government Finance

Lord Campbell-Savours Excerpts

Tuesday 21st November 2023 Lords Chamber

[The Lord Speaker (Lord McFall of Alcluith)]

My Lords, Lord Campbell-Savours is participating remotely.

[Lord Campbell-Savours (Lab) [V]]

Why should people pay inflated rents to private landlords who are coining it in conditions of scarcity? Is not the answer to secure selectively land for housing development at agricultural prices, as has happened in parts of Europe, in particular Germany, and to back up that land purchase policy with a mass building programme of housing for both rent and purchase, but under a new form of title which restricts speculative gains and yet protects the value of freehold title? Speculative markets in land are denying millions a home.

[Baroness Penn (Con)]

My Lords, I believe that part of the solution to this problem is an increase in supply and quality in the private rented sector, which our Renters (Reform) Bill will help to deliver, and also in the affordable housing and social housing sectors. That is why this Government have put so much money into the affordable housing programme, to increase the supply of that housing and relieve the pressure that we see on temporary accommodation.

Housebuilding

Lord Campbell-Savours Excerpts

Wednesday 7th June 2023 Lords Chamber

[Lord Campbell-Savours (Lab) [V]]

My Lords, could not a land commission be established to research what the impact would be of building on land acquired at agricultural prices, as proposed by Lisa Nandy, and sold for housing of a new form of ownership title, as I proposed in previous debates in the House? Only by that means can we guarantee the target of the noble Lord, Lord Young of Cookham, thereby providing affordable housing to a new generation of young people who, without inherited wealth, may never be home owners.

[Baroness Scott of Bybrook (Con)]

The Government need to look at all opportunities for housebuilding but we have to look at brownfield land first, before agricultural land.

Supported Housing (Regulatory Oversight) Bill

Lord Campbell-Savours Excerpts

2nd reading
Friday 21st April 2023 Lords Chamber

[Lord Campbell-Savours (Lab) [V]]

My Lords, we have just heard a very well-informed contribution from my noble friend. I greatly welcome this Bill. It provides me with the opportunity to comment on the accompanying Commons report, which I have been sitting on for something like five months, awaiting this debate.

After 43 years in Westminster, I can recall only a small number of occasions where the publication of a Select Committee report has caused so much anguish and concern to committee members about the state of a publicly funded provision and the use of public expenditure. I sat on the Commons Public Accounts Committee for 10 years, and I cannot recall even a National Audit Office report on such a breakdown in the use of public funds. I was shocked to read this devastating report last year, and I congratulate the Commons Levelling Up, Housing and Communities Committee, under the chairmanship of Clive Betts, for its brilliant exposure of a problem which I suspect most Members of both Houses were completely unaware of. I certainly was unaware of it.

For the anoraks outside the House who are following this debate—there are many—the report is numbered HC 21. It was published on 27 October last year and is entitled Exempt Accommodation. In its summary, it refers to a system which

“involves the exploitation of vulnerable people … while unscrupulous providers make excessive profits by capitalising on loopholes”.

That has already been referred to by the noble Lord, Lord Best, but I repeat it for emphasis, because it is a very important statement to include in the report. It also says that

“some residents’ experiences of exempt accommodation are beyond disgraceful … Where the very worst experiences are occurring, this points to a complete breakdown of the system”.

This is hardly the language of reports we have heard from other Select Committees over the years. It continues:

“Areas with high concentrations of exempt accommodation can also attract anti-social behaviour, crime—including the involvement of organised criminal gangs—rubbish, and vermin”.


We have to remember that people have been living in these appalling circumstances. The report then reveals that

“organisations with no expertise are able to target survivors of domestic abuse and their children and provide neither specialist support”

nor a safe environment.

The report is scathing on the availability of data. It accuses successive Governments of having been “caught sleeping”, with a scarcity of data. It cites, for example, the inability to establish how widespread the very worst experiences are and how many exempt accommodation claimants and providers there are. I am sure we can all agree that these shocking revelations demanded action. Clive Betts’s committee’s report, followed by the Blackman initiative, have delivered what I would argue successive Governments of all persuasions have failed to deal with.

I want to flag up a number of issues arising from both the Betts report and the subsequent debate in the House. I make it clear that it is not my intention to seek to amend the Bill before us in any way; we need its swift passage into legislation. However, there remain some issues on which we need further assurances. For example, there was talk in the Commons of the requirement for new planning powers for local authorities to be able to proactively manage the market. The Government have responded with a review, which needs to be followed up.

There was a call more generally for greater national monitoring and oversight powers and of a reformed regime of enforcement. There were calls for the establishment of a system of evaluation and improvement notice orders. This needs to be followed up with a comprehensive consultation process. Of particular concern to my Labour colleagues when it was considered in the other place was the issue of limited resources and the effect on cash-starved, overburdened local authorities, some of which may choose not to license. They may be the very authorities with the greatest problems. The Government’s consultation has highlighted the problem but not dealt with it. But the issue of resources goes wider. For example, what of the funding of the cost to local authorities of adopting licensing schemes? The schemes will cost money, and the money will have to come from somewhere.

Finally, on a wider issue that falls slightly outside the remit of the Bill, there is a need to close the regulatory loophole whereby unscrupulous, exempt non-profit-making providers who let both at below market rents and at market rents are able to operate outside consumer legislation. That was partly dealt with during Commons proceedings, but it remains outstanding. My people have proposed a solution. Will Ministers follow this up at some stage after the Bill’s passage? Could the Minister assure me that the matters that I have raised will be followed up, perhaps in a letter to me?

According to MP research, we are now told that there are 153,000 households in exempt accommodation, with escalating numbers in recent years. Some people argue that that is an underestimate. The problem is that the stats reveal little, as local authority returns are limited in scope. That certainly needs rectifying.

Finally, I want to say a few words of appreciation to Mr Bob Blackman, Member of Parliament. He is not of my political persuasion—we differ politically on many issues, I am sure—but on this issue he has undertaken a fine piece of work on which he should be congratulated, and we are all indebted to him. I hope that this Bill proceeds unamended, without further debate, to the statute book. Equally, I hope that the Government will give clear instructions to their officials to get on with it. We need to deal expeditiously with this appalling state of affairs.

Housebuilding

Lord Campbell-Savours Excerpts

Thursday 30th March 2023 Lords Chamber

[The Lord Speaker (Lord McFall of Alcluith)]

My Lords, the noble Lord, Lord Campbell-Savours, is participating remotely.

[Lord Campbell-Savours (Lab) [V]]

My Lords, if, prior to planning approval, land for both high-density public and private housing development was acquired at agricultural acreage prices, as has happened in parts of Europe, and then allocated for both social rental and restricted leasehold sale to housing associations and housing trust development programmes, would that not be a huge incentive for construction levels not seen since the 1970s, as against today’s numbers, where scarcity is driving up prices and denying millions a home?

[Baroness Scott of Bybrook (Con)]

The noble Lord brings up a very interesting idea. We are looking at different ways of land use in the levelling-up Bill, and I am sure that there will be more discussions on those sorts of issues.

Leasehold Reform

Lord Campbell-Savours Excerpts

Thursday 23rd March 2023 Lords Chamber

[The Lord Speaker (Lord McFall of Alcluith)]

My Lords, the noble Lord, Lord Campbell-Savours, is participating remotely.

[Lord Campbell-Savours (Lab) [V]]

My Lords, have Ministers noted the large number of leasehold ground rent investments on property auction sites, as landlords, aware of potential changes in the law affecting valuations, offload their leasehold ground rent investments? Innocent non-professional buyers, ignorant of potential changes in the law, are now buying them—caveat emptor—placing themselves at risk of substantial loss. Should government not consider secondary legislation which would alert an innocent market to the dangers of buying these leasehold ground rent investments?

[Baroness Scott of Bybrook (Con)]

The noble Lord brings up a very interesting point. I will take it back to the department and we will discuss it further. These are the sorts of issues that LEASE will be helping potential buyers work their way through.