Leasehold and Freehold Reform Bill

Lord Stunell Excerpts

2nd reading
Wednesday 27th March 2024 Lords Chamber

[Lord Stunell (LD)]

My Lords, it is a pleasure to follow the noble Lord, and I am sorry that his speech was somewhat interrupted by technological problems.

I declare an interest as a vice-president of the LGA simply because it is one of many organisations which have contributed evidence and views on the Bill. I also want to declare that I am the joint leaseholder of just one residential flat, which I occupy during my parliamentary work, and I am in the same block of construction that the noble Baroness, Lady Andrews, referred to, with exactly the same issues; I shall certainly work alongside her at later stages of the Bill. However, that will not be the central point of what I want to say. There have been some powerful contributions so far, and many of the things I want to highlight have already been properly drawn into the debate by people who have created the policies I want the Government to advocate, never mind persuading them to join with me.

Unfortunately, the Bill comes from the same stable as the levelling up Act. With that Act, all the promise was in the title; the delivery part was the problem. We have exactly the same tendency here. With the leasehold reform Bill, the promise is in the title but the delivery is not in the Bill. The Bills have other things in common. Both suffered—in this Bill’s case, it is still suffering—from a headlong rush by the Government to introduce new material into the Bill as it goes along. In many cases, as we see in the report from the Commons, it was not controversial enough for the Commons to think that it should be divided on. However, it came at such short notice that the Commons did not have the opportunity to examine whether the stuff brought in front of it was going to work. We have heard enough evidence so far today that the Government are spending an increasing amount of time chasing their tail, trying to make their legislation work. We saw that with the levelling up Act, and some of us think that, however hard they chased, they did not succeed in catching their tail on that one.

During the passage of the Building Safety Act, which I and other noble Lords spent a good deal of our time trying to steer through and improve, on all sides there was a broad level of consensus as to what should be in it. However, in many cases the Government were somewhat resistant to the sensible improvements suggested by Members on all sides of the House, including their own Back-Benchers. Some of those things have had to be put right through further amendments, both to the levelling up Bill and now to this Bill, where loopholes and omissions have come to light.

We had a hint in what the Minister said that we will have some more tail-chasing in subsequent stages of this Bill. Capping ground rents and forfeiture may be coming back to us—I hope they do. However, I hope also that they will come sufficiently soon for us to spend a reasonable amount of time examining the material the Government bring forward, so that we do not have to have follow-up Bills chasing the Government’s legislative tail.

Having said all that, I welcome the Bill before us, despite the fact that it suffers from some major flaws. They have already been spelled out by others, so I will not rehearse them. Some of the worst were set out by my noble friend Lady Thornhill earlier. Can the Minister give us some positive information about the Government’s consultation on capping ground rents and on service charges? The noble Lord, Lord Young of Cookham, rightly brought both matters into play earlier on.

There are also some missed opportunities for real reform. The regulation of property agencies is clearly right up there near the top, and the omission of flats from the creation of new leases is just absurd. Some 70% of leaseholds are flats. The biggest growing market is flat-building in inner urban areas, and all such flats are leaseholds. The problem is getting bigger; it is becoming a larger fraction of the housing market as we speak. The idea that it is not appropriate, timely or sensible to tackle that seems strange in the extreme and difficult to justify, and it certainly needs to be challenged.

I will not say that the failure to make more progress on commonhold is a mystery; the problem with commonhold is that it is broadly seen as a neat solution, but nobody has quite grappled with how you bring it into force. It is a pity that the Government are still struggling when there is so much good information available from the Law Commission and others about what needs to be done to make that happen.

The barriers to the right to manage are being tackled in the Bill. However, as the noble Baroness, Lady Andrews, pointed out, there are some serious tripwires for potential enfranchisers to get to grips with, and I am sure we will want to discuss that in more detail.

However, I want to pick up a point that my noble friend Lady Thornhill raised about the right to manage. The right to manage works well if you have managers who are tenants or leaseholders in those blocks. Therefore, if you like, it is an upper middle-class project enfranchisement. If your leaseholders are solicitors and accountants and so on, you are well made—you can do it, but surely the right to manage needs to go much further through the socioeconomic pyramid than that. This means that, to be workable, there will be not just right-to-manage projects but residential management agents who can do that work effectively on behalf of leaseholders. Surely they then have to be of good quality and integrity—in other words, regulated. I hope that the Government, in responding to the noble Lord, Lord Best, on his point about property agents, will also pick up the residential management agents question as well.

There is a deeper philosophical debate to be had about who in a mature democratic society should have the right to monopoly exploitation of the scarcity value of land. The balance of that debate has moved over the last 250 years substantially in the direction of providing better protection for the weak and minimising harm to the common good. Both are at the expense of the monopoly holders of the scarcity of land. The Government are fond of saying that Britain is world leading but in this area of policy we are world trailing. Only England and Wales, which this Parliament is responsible for, and Australia, have anything like our anachronistic leasehold system tainting the whole property market. It is time that we caught up with the rest of the pack, even if it is too much to hope that the Bill will get us somewhere near the front of it.

The Bill is just a skirmish in a much bigger battle for fair property rights and access to decent housing for all. I very much welcome that when introducing it today the Minister said that she will be ready and willing to engage with us on improving the Bill because, my goodness, it does need improving.