Housing: Unfair Leasehold Agreements

Lord Naseby Excerpts

Tuesday 3rd March 2020 Lords Chamber

[Baroness Bloomfield of Hinton Waldrist]

As I said in a previous answer, the Competition and Markets Authority report updating its investigation into the extent of mis-selling and onerous lease terms will address this issue—maybe not the profit motive but the consequences of past actions. I note that in an action of Cardiff Council v Persimmon, Persimmon was forced to give 55 properties sold as leasehold on the St Edeyrns estate back to freeholders in an out-of-court settlement, so they were given their leaseholds as freeholds for nothing. We would like to see more of this happening. Regrettably, it was settled out of court before it became a court case so we cannot use that settlement as a legal precedent.

[Lord Naseby (Con)]

We recognise that the Government are taking action on a number of aspects, but there remains the problem of couples who have bought—particularly in the north and Midlands—and want to move home but find that their property is totally unsaleable. The noble Lord who raised this Question is absolutely right to do so. Will my noble friend have a closer look at this? We cannot have a situation where young couples buy what they think is a home and are stuck there unable to move.

[Baroness Bloomfield of Hinton Waldrist]

I agree with my noble friend. That is why we are working closely with the Law Commission and the CMA to inform future legislation. This has become a particular problem in the north of England. In answer to that question and that of the noble Lord, Lord Foulkes, I say that what is most disappointing is the governance of the housebuilders that have been escalating these charges. The non-executive directors of these companies should have taken a longer, harder look at their policies.