Leasehold Reform (Ground Rent) Bill [HL]

Lord Young of Cookham Excerpts

Monday 24th May 2021 Lords Chamber

[Lord Young of Cookham (Con)]

My Lords, like others who have spoken, I very much welcome this Bill. It is another step along the road of reform that, as my noble friend Lord Blencathra said, began in 1967 with the Leasehold Reform Act, which gave tenants of houses the right to buy the freehold. That was followed in 1993 by the Leasehold Reform, Housing and Urban Development Act, which gave leasehold tenants of flats the right collectively to buy the freehold.

I modestly remind the House that I put that piece of legislation on the statute book nearly 30 years ago. The junior Minister who skilfully piloted it through your Lordships’ House was my then youthful noble friend Lord Strathclyde. This was subsequently amended by the Commonhold and Leasehold Reform Act 2002, which introduced commonhold. In my view, the destination of this journey should be the eventual elimination of leasehold. Here I agree with my noble friend Lord Blencathra, who spoke without restraint a few moments ago about the feudal form of tenure, which exists nowhere else in the world and has no place in a modern society.

Switching metaphors, the Bill before us today is the appetiser for the main course—a more comprehensive piece of legislation to remove some of the inequities of the present leasehold system, which I look forward to and, along with other noble Lords, hope will not be delayed too long. I accept what my noble friend the Minister said right at the beginning: that we should not use this piece of legislation to shoehorn in parts of the more substantial legislation that I hope will follow soon. I applaud the role that my noble friend the Minister has played behind the scenes in moving this whole debate forward. While I am delighted that many builders such as Barratt Homes have abandoned ground rents and are establishing resident management companies, not all are following—hence the need for the Bill.

As many noble Lords have said, although the Bill has “Ground Rent” in the title, nowhere in the Bill is this defined; I will refer to that again in a moment. However, given that “Ground Rent” is in the long title, the Government could have included in the Bill the Law Society’s recommendation that existing leaseholders should be able to buy out ground rents. At the moment, they can in effect extinguish the ground rent but only by extending the lease, which of course involves paying a premium. Many may not be able to afford this but they could buy out the ground rent on the basis suggested by the Law Commission. Might my noble friend include that as a government amendment in Committee, which I am sure would be very popular?

As I said, the Bill does not define “ground rent”; this was raised in the Zoom meeting that the Minister was kind enough to hold with a number of us last week, and it is being raised again today. Clause 22 is headed “Interpretation”. It tells us what a dwelling and a peppercorn rent are, but not what ground rent is. Instead, it says that

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

That is very broad and, as my noble friend Lord Hammond said, may capture other elements that are not ground rents. What it calls a “permitted rent” is defined in Clauses 4 to 6, but that definition may go wider than ground rent.

The Explanatory Notes say that the Act is intended to capture any payment under a lease which does not impose an obligation on the landlord to provide a service, but this is not in the Bill. However one defines ground rent—there are definitions in the Law of Property Act 1925, and the Law Society in its helpful briefing for this debate suggests another definition—it is important that ground rents do not reappear under another name. Could this happen by specifying a fixed service charge rising in line with inflation to cover the landlord’s expenses in arranging buildings insurance? This point was made by my noble friend Lord Bourne before he was excommunicated. As the law currently stands, fixed service charges cannot be challenged by leaseholders, but they could be used by freeholders as the basis for secured lending, thus perpetuating the ground rent investment industry. Also, as my noble friend Lord Hammond said, in modern leases and modern case law, rent often has a broader meaning, including ground rent and service charges. Perhaps, as the noble Baroness, Lady Andrews, suggested in her speech, the Bill intends all future residential leases to be drafted so that only the peppercorn rent is described as a rent. Perhaps my noble friend the Minister could deal with that in his wind-up.

I am also concerned at one of the exceptions in Clause 2(1)(b), which my noble friend mentioned in his opening speech. The right in the Bill does not extend to premises where the nature of the business purposes demised by the lease as a dwelling

“significantly contributes to the business purposes”.

In the case of a block that has offices on the ground floor but flats above it, where there is a head lease, does this mean that the flats are excluded from the provisions of the Bill? Speaking from memory, the 1993 Act excluded from enfranchisement premises where more than 25% was non-residential; I wonder why that definition is not used here.

On the commencement date, the noble Lord, Lord Best, made a valid point about retirement homes in the process of being sold, where there was the risk of a two-tier system of ground rents. Hopefully, Wales will move at the same pace as England, but I see that the Bill allows a separate commencement date. Perhaps the Minister can clarify.

I was going to end by saying that I did not see why we needed three days in Committee but, having listened to today’s debate, I am not sure that three days will be enough. However much time is spent in Committee, I hope that this will not delay too long the arrival of the Bill on the statute book.

[The Deputy Speaker (Baroness Garden of Frognal) (LD)]

My Lords, the noble Lord, Lord Thurlow, has withdrawn so I call the noble Lord, Lord Bhatia.

Rent Arrears: Covid-19

Lord Young of Cookham Excerpts

Thursday 20th May 2021 Lords Chamber

[Lord Greenhalgh (Con)]

My Lords, I point out that two-thirds of the tenants identified in the survey have two months or less of rent arrears. We have preferred to avoid encouraging further debt, instead providing non-repayable financial support through furlough and the welfare system.

[Lord Young of Cookham (Con)]

My Lords, in the debate in Grand Committee on 22 April on poverty and mass evictions I asked my noble friend whether his department would do a quick review of the schemes in Wales and Scotland of grants and loans that prevent evictions to see whether any lessons might be learned for England. He replied:

“I will encourage my officials to look at what we can learn from the devolved Administrations”.—[Official Report, 22/4/21; col. GC 402.]


What was the outcome of that review?

[Lord Greenhalgh (Con)]

My noble friend is quite right. I have asked my department to do that. My officials carefully studied the Scottish and Welsh schemes to support tenants with rent arrears. I understand that a relatively small number of loans have been made by these schemes. Indeed, the Government continue to believe that it is right to provide non-repayable financial support rather than encouraging further debt.

Leaseholders and Property Management Companies

Lord Young of Cookham Excerpts

Thursday 29th April 2021 Lords Chamber

[Lord Greenhalgh (Con)]

My Lords, we believe very strongly that any fees and charges should be justifiable, transparent and communicated effectively and that there should be a clear route to challenge or address things if they go wrong. That is why we commissioned the noble Lord, Lord Best, to do his report.

[Lord Young of Cookham (Con)]

My Lords, on 5 January, when I described leaseholders as

“a relic from a feudal age”,

my noble friend replied:

“There is no doubt that in this country we are unique in having leasehold. We need to focus on reform, which will take this forward to a position similar to that in Scotland or on the continent, where people are co-owners of their property.”—[Official Report, 5/1/21; col. 9.]


Is legislation on its way so that everyone can benefit from my noble friend’s ambition?

[Lord Greenhalgh (Con)]

My Lords, my noble friend knows that the Government wish to extend the benefits of freehold ownership to more homeowners; that is why we are establishing a commonhold council to prepare homeowners and the market for the widespread take-up of commonhold. We share that same drive and ambition to change things.

Covid-19: Poverty and Mass Evictions

Lord Young of Cookham Excerpts

Thursday 22nd April 2021 Grand Committee

[Lord Young of Cookham (Con)]

My Lords, I am grateful to the noble Lord, Lord Bird, for initiating this short debate. He mentioned that it was 30 years ago that he launched the Big Issue. I was the Housing Minister at that time, which was the first time that I met the noble Lord, and it is a pleasure to join forces with him again this afternoon in the campaign to prevent homelessness.

This debate follows on closely from Monday’s debate on the prevention of eviction order, answered by my noble friend Lord Wolfson. When he replied to that debate, he very modestly said that he was a humble Justice Minister and that many issues raised were for MHCLG, hence the welcome opportunity to follow up those issues this afternoon.

I welcome the Government’s decision to extend the ban on most evictions in effect until mid-June, which aims to strike a balance between the needs of tenants and those of landlords. I also welcome the generous support that the Government have extended to renters: the LHA increase, the UC uplift, the one-off payment of £500 and the increase in discretionary housing payments. These will enable the majority of tenants to cope, with some forbearance from their landlords.

However, as noble Lords have said, when the temporary arrangements come to an end, there will be a problem. Of course, each time the Government for understandable reasons extend the eviction ban, the greater the amount of arrears that are likely to build up. This is a particular problem for the 56% of families with arrears who are not in receipt of benefits and therefore are precluded from discretionary housing payments.

The noble Lord, Lord Shipley, had some estimates. Roughly one-quarter of a million social tenants and the same number of private renters were estimated by the Resolution Foundation to be behind with their rent in February. This poses a particular problem for the courts, which are already under pressure due to the pandemic backlog, but much more important is the problem for families facing eviction.

I know that Scotland and Wales are different, but the problems that confront private tenants with Covid-related arrears are basically the same wherever they live. The Welsh scheme was launched last autumn. The tenancy saver loan scheme is repayable over five years with interest at 1% and is operated by credit unions. It is paid direct to the landlord, and is available only if the credit union believes it is affordable. Once tenants have applied for the loan, they can access support and advice services to help them manage their financial situation. It was welcomed by housing charities and landlord representatives alike. In Scotland, they have a very similar scheme, launched last September. Its tenant hardship loan fund offers interest-free loans to those unable to access other forms of support for their housing costs.

I know there is an argument for grants rather than loans. They are simpler to administer and avoid adding to debt, but they are more expensive for the taxpayer and unfair to those tenants who made sacrifices to pay their rent while their neighbour next door, who made no such sacrifice, may get a grant to wipe out the debt. Loans avoid that moral hazard. I do not expect the Minister to change government policy when he winds up, but will his department carry out a quick review of the Welsh and Scottish schemes to see whether there are any lessons which we might learn in England?

Levelling Up

Lord Young of Cookham Excerpts

Thursday 18th March 2021 Lords Chamber

[Lord Young of Cookham (Con)]

My Lords, I welcome the Government’s commitment to levelling up those parts of the country that, by general consent, have been left behind. I also welcome the very substantial sums of money that the Minister has just referred to. Further to the question of the noble Baroness, Lady Pinnock, when the Minister in another place was asked how we would know whether levelling up was achieving its objectives, he basically said that the next general election would provide the answer. Are the Government working on a measurement, or system of measurements, that would enable us to measure value for money for the levelling-up agenda in the meantime?

[Lord Greenhalgh (Con)]

I reassure my noble friend that the Government have established a series of provisional priority outcomes and metrics, which has been published as part of the spending review. Table 2H is a particular example of an outcome that will help to measure the success of the fund.

Rough Sleeping

Lord Young of Cookham Excerpts

Tuesday 2nd March 2021 Lords Chamber

[Lord Greenhalgh (Con)]

My Lords, all I can say in addition to my response to earlier questions is that the Government are committed to expanding Housing First. That commitment was made in our latest manifesto, but it is important to take on board the lessons from the three pilots.

[Lord Young of Cookham (Con)]

My Lords, like others, I welcome the Government’s commitment to end rough sleeping by the end of this Parliament and the progress being made towards that. But the Statement says, of those sleeping rough:

“Many of the individuals will have been offered accommodation but will not have chosen to accept it, for a wide range of reasons.”


How, then, will the commitment be delivered?

[Lord Greenhalgh (Con)]

My Lords, I commend my noble friend on his tireless work that started in the early 1990s with the launch of the Rough Sleepers Initiative. Recognising that the moral mission of ending rough sleeping will be difficult shows the need to work in harness not only with our health partners and others in local authorities, but also with the community voluntary sector to deal with the underlying problems. The Housing First principle is first to find secure accommodation, then to deal with issues so that the person involved does not return to the streets.

Building Safety

Lord Young of Cookham Excerpts

Monday 22nd February 2021 Lords Chamber

[Lord Young of Cookham (Con)]

My Lords, in welcoming the extra support for leaseholders, I commend my noble friend on the role that I know he personally played in shifting the Government’s position. On the developer levy, which I called for last year, can he explain why it is going to be levied on future developments—which, as he has just explained, will not have the same problems, and where indeed the developers may be new to the market—rather than on those developers that are responsible for the defects and that did very well on the proceeds?

[Lord Greenhalgh (Con)]

I thank my noble friend for recognising that this announcement includes a developer levy, which he was lobbying for. It will be on future buildings, but at the same time we recognise the role that a number of developers have played in creating the cladding crisis. That is why the Secretary of State also announced that a new tax would be introduced for the UK residential property development sector that will ensure that the largest property developers also make a fair contribution to the remediation programme. We think that these measures taken together will ensure that the industry does more to contribute to the remediation of historical cladding defects and will play its part in dealing with this crisis.

Covid-19: “Everybody In” Scheme

Lord Young of Cookham Excerpts

Monday 11th January 2021 Lords Chamber

[Lord Greenhalgh (Con)]

Vulnerability is incredibly important to understand. That is why the Government have put £10 million on the table for local authorities, which know their communities best, to come up with plans to target those rough sleepers and give them the wraparound care needed. That is how we will proceed: in partnership with local leaders at a local level.

[Lord Young of Cookham (Con)]

My Lords, like others, I welcome the Government’s instruction on Friday to local authorities to redouble their efforts to accommodate those sleeping rough. This will help achieve the target by 2024. Might I ask my noble friend about numbers? In 2019 the Government estimated the number of rough sleepers to be 4,000. As a result of Everybody In, we now know that, of the 15,000 people supported, 7,000 people had been sleeping rough. Does this not underline the need for a better measurement of rough sleepers if we are going to hit our target?

[Lord Greenhalgh (Con)]

My Lords, I thank my noble friend because I agree that, through this pandemic, we have got much more of a grip of the quantum involved if we want to end rough sleeping. We also know there are people who may not be rough sleeping in the truest sense of the word—but they are sofa surfers on the edge of being rough sleepers. Understanding more about the cohort and what it will take to resource this is the only way to deliver on the Government’s moral mission to end rough sleeping for good.

Leaseholders: Properties with Cladding

Lord Young of Cookham Excerpts

Thursday 7th January 2021 Lords Chamber

[Lord Greenhalgh (Con)]

My Lords, I absolutely accept that a generation of people have built buildings that are not fit for purpose and, under any regime, should not have been built in this way. In recent years, developers have made profits of between 20% and 30%, so of course they should step forward and do the right thing. I absolutely share that view. The leaseholders who find themselves in this position are victims. I have said that at the Dispatch Box and am happy to commit to do everything we can to ensure that this does not fall heavily on leaseholders.

[Lord Young of Cookham (Con)]

As my noble friend Lady Neville-Rolfe rightly says, this problem has dragged on too long. We need a solution that avoids the costs and delays of the courts. Should the package of measures not include further support from the Government, as with PRC houses in the 1980s, and a major contribution from the developers, as was just implied by the noble Baroness, Lady Kennedy, which have a moral responsibility and should be subjected to a levy?

[Lord Greenhalgh (Con)]

My Lords, I think the solution will include a levy on the development community, but I also want to talk about construction products. Look at the margins made by those who sold some of the construction materials used on high-rises such as Grenfell Tower. They made astronomical profits. Profits have been made and the result was products that are not fit for purpose. We have seen total regulatory system failure and construction practices that require significant regulatory change. As Buildings Safety Minister, I am committed to that.

Provisional Local Government Finance Settlement

Lord Young of Cookham Excerpts

Wednesday 6th January 2021 Lords Chamber

[Lord Greenhalgh (Con)]

My Lords, I have never heard so many questions poured in with such economy, but I refuse to give advice to any council, or any councillor, on how they should tax their local communities. I could point to my own record as the leader of Hammersmith and Fulham Council. For six years we cut council tax by 3%, and for one year we froze it. That was because I believed that our council tax level was too high. I did not understand why neighbouring boroughs such as Wandsworth and the Royal Borough of Kensington and Chelsea had substantially lower council tax than Hammersmith and Fulham. I chose the route of being able to tax less and provide better services, through more efficiency and driving greater productivity. So I would say that it is down to local leaders to decide how they set their council tax. My advice would be: what do you think is in the interests of your people? I agree that council tax is a regressive tax—but it is particularly ridiculous to see how some councils have to raise their funds largely through council tax increases, because they receive so little grant as a proportion of their combined budget. I shall give more examples of that later.

[Lord Young of Cookham (Con)]

My Lords, in the Statement we are discussing, the Secretary of State said:

“I want local government to emerge stronger, more sustainable and better able to meet the needs of those it serves.”


Does my noble friend, with his local government experience, recognise that the current tax base for local government is unsustainable, with domestic rates 30 years out of date—and, as he has just admitted, regressive—and commercial rates killing the high street? Will the White Paper on devolution and local recovery, promised for last autumn, set out a firmer and broader basis for local government, so that it can be empowered as the Secretary of State wishes?

[Lord Greenhalgh (Con)]

My Lords, I have saved my data, which I carefully put together—although I will not be able to read it very well—for my noble friend’s question, of which he kindly gave me notice. I shall tell a tale of two boroughs—the London Borough of Richmond upon Thames, a Liberal Democrat authority, and the London Borough of Hammersmith and Fulham, now, sadly, a Labour borough. It was taken over after I was leader of the council—but that is democracy for you. Things can change back again, I hasten to add, for the benefit of the noble Lord, Lord Kennedy. Things can swing both ways. For those two boroughs, exactly the same budget base was estimated, through both council tax and grant. Richmond upon Thames had £173 million and Hammersmith and Fulham £174 million—pretty much the same amount. Yet 83% of the money in Richmond upon Thames is raised through council tax, whereas only 31% of the money in Hammersmith and Fulham is raised through council tax. That is patently absurd. Of course we need to think about a more sensible system of local government finance. It is very hard to estimate via complex formulae, and I am sure the devolution White Paper will look into some of the vagaries of local government financing, whereby a river can separate, and thus create such great differences between, two neighbouring authorities.