Leasehold and Freehold Reform Bill (Third sitting)

Debate between Mike Amesbury and Matthew Pennycook

Committee stage
Thursday 18th January 2024 Public Bill Committees

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

My wife is the joint chief executive of the Law Commission, whose work on leasehold reform we have regularly touched upon.

[Mike Amesbury (Weaver Vale) (Lab)]

I am a member of the all-party parliamentary group on leasehold and commonhold reform.

Leasehold and Freehold Reform Bill (Second sitting)

Debate between Mike Amesbury and Matthew Pennycook

Committee stage
Tuesday 16th January 2024 Public Bill Committees

[Matthew Pennycook]

Q On what is not there, the Government have chosen to include none of the recommendations on commonhold. We very much think that commonhold should be the default tenure going forward. Without enacting all of the 121 recommendations on commonhold, are there any that could be included in the Bill fairly easily, and in a way that would pave the way for commonhold in the future?

Professor Hopkins: During Second Reading, the Secretary of State said that he thinks commonhold is preferable to leasehold, and I concur with that. We concluded that commonhold is a preferable tenure to leasehold. It gives the benefits of freehold ownership to owners of flats—the benefits that owners of houses already enjoy.

Commonhold does of course have a history. It was introduced in the Commonhold and Leasehold Reform Act 2002 and has not taken off. Our recommendations as a whole were designed to provide a legal scheme that would enable commonhold to work more flexibly and in all contexts—to work for complex, mixed-use developments. With commonhold having failed once, there is a risk of partial implementation, meaning that commonhold has a second false start, which would probably be fatal to it. I think that the legal regime for commonhold needs to be looked at as a whole, to ensure that it works properly for the unit owners, developers and lenders who lend mortgages over commonhold. We need the legal regime that works. We need to remove any other blocks on commonhold.

[Mike Amesbury (Weaver Vale) (Lab)]

Q Do you think that it is a missed opportunity not to take those recommendations on commonhold forward?

Professor Hopkins: It is our job at the Law Commission to make recommendations for Government reform and of course we would like to see those recommendations implemented, but ultimately what goes in the Bill is a matter for the Government to decide, not the Law Commission. There is a lot in this Bill that is very positive for leaseholders, albeit the commonhold recommendations are not there.

Leasehold and Freehold Reform Bill (First sitting)

Debate between Mike Amesbury and Matthew Pennycook

Committee stage
Tuesday 16th January 2024 Public Bill Committees

[Matthew Pennycook]

Q My second question relates to managing agents. Lots of the freeholders that leaseholders have to deal with are offshore and hard to reach. Managing agents are the first point of contact, and in many cases are the only point of contact. To what extent do you think that the Bill will function effectively without some kind of regulation of managing agents? Should we be looking to introduce that into the Bill?

Mr Martin Boyd: The RoPA—regulation of property agents—report, which the Government undertook some years ago under Lord Best and which proposed statutory regulation of managing agents in this sector and within the estate agency world, has unfortunately not moved forward. There are proposals in the Bill to bring estate agents within codes of practice, but nothing in particular changes on property management. We have a slightly strange position at the moment. In the social sector, there is now an obligation for a property manager to have a proper level of competencies to look after high-rise buildings, or high-risk buildings, as they are still called. In the private sector, though, we have nothing. There are no requirements to have any qualifications to look after and manage the highest of our high-rise buildings in this country. That is simply wrong, so I would support fully a move to the statutory regulation of agents.

[Mike Amesbury (Weaver Vale) (Lab)]

Q Hello Martin, good to see you. Are there any risks in banning new leasehold houses but not flats?

Mr Martin Boyd: Yes, there are risks. Currently, we do not have a viable commonhold system. Even if the Government were to come forward with the full Law Commission proposals, those had not reached the point where they created all the systems necessary to allow the conversion of leasehold flats to commonhold flats. I see no technical reason at the moment why we should not move quite quickly to commonhold on new build for extant stock. I think it will take longer—and, at the end of the day, conversion will be a consequence of consumer demand. People would want to do it. On my side, I would not want us to convert to commonhold, because I could not yet be sure that it would help to add to the value of the properties. It would make our management of the site a lot easier, but I could not guarantee to anyone living there that it would add to the value of their property—and that is what people want to know, before they convert.

Renters (Reform) Bill (Fifth sitting)

Debate between Mike Amesbury and Matthew Pennycook

Committee stage
Tuesday 21st November 2023 Public Bill Committees

[Matthew Pennycook]

I thank my hon. Friend for that intervention. It is a point well made, and I think the same point was made by Richard Miller of the Law Society. If this Bill works as intended, there are a number of provisions in it that should relieve the burden on the courts. We all want to see that happen. However, to the extent that the courts do need to act in possession cases, we need to know precisely what the Government mean by the “improvements” that they have been referring to over recent months.

That King’s Speech briefing note would suggest that the required improvements relate only to the court possession action process. However, it is not clear whether the proposed new digital system for possessions is the only improvement that Ministers believe needs to be delivered before the new tenancy system can be introduced, and if so—this is crucial—by what date that new system will be operational.

Can the Minister tell us more about the new digital system for possessions that the King’s Speech briefing note referred to? Specifically, can he tell us whether its introduction is the sole determinant of when the new tenancy system can come into force? Can he also outline when the Government expect work on that new digital system to be completed by the Government and rolled out for use by landlords, given that it appears—on the basis of the King’s Speech briefing note—to have only just commenced?

The White Paper “A fairer private rented sector”, which the Government published in June 2022, set out the Government’s intention, working in partnership with the Ministry of Justice and HM Courts and Tribunals Service, to

“introduce a package of wide-ranging court reforms”.

Those went beyond purely the court possession action process that I have just been speaking to. It was suggested in the White Paper that the package would include steps to address county court bailiff capacity, a lack of adequate advice about court and tribunal processes, a lack of prioritisation of cases and the strengthening and embedding of mediation services for landlords and renters—issues that many of our witnesses in last week’s evidence sessions referred to.

Many of those issues were also identified in the Government’s response to the Select Committee as “target areas for improvement”. What is not clear is whether the implementation of the new tenancy system, and this clause, is dependent on Ministers judging that sufficient progress has been made in relation to each of those target areas for improvement, or whether it is dependent, as I have suggested, solely on improvements in the court possession process.

Can the Minister tell us clearly which one it is? Will the new tenancy system be introduced only when improvements have been made in all the target areas specified, or is the implementation date linked solely to improvements in the court possession process? If it is the former, what are the criteria by which the Government will determine when sufficient improvements have been made in each of the listed target areas for improvement? Those of us on the Opposition side of the Committee, and many of the millions of tenants following our proceedings, need answers to those questions. As we debate the Bill today, we do not know precisely what reform of the courts is required for the new tenancy system to be enacted.

I turn to my third question. Because we have no real sense of precisely what the Government mean by court improvements, and therefore no metrics by which they might be measured, we have no idea whether and when they might be achieved. The concern in that regard should be obvious. Having been assured repeatedly by Ministers that the passage of this Bill will see a new tenancy system introduced and the threat of section 21 evictions finally removed, tenants have no assurances, let alone a guarantee, that the Government have not, in effect, given themselves the means to defer—perhaps indefinitely—the implementation of these long-promised changes.

As I referenced in my response to my hon. Friend the Member for Brighton, Kemptown, we accept that the court system needs to be improved so that, when landlords or tenants escalate a dispute, they can have confidence that it will be determined in an efficient and timely manner. However, since they committed themselves to abolishing section 21 evictions, the Government have had more than four and a half years to make significant improvements to the system to support tenants and good-faith landlords, and they have not succeeded in doing so.

[Mike Amesbury (Weaver Vale) (Lab)]

On that four-and-a-half-years point, can my hon. Friend clarify how many people have been evicted through no-fault eviction since 2019, when abolition was originally promised?

[Matthew Pennycook]

That is a very good point. Every month that the Government delayed tabling the Bill, many thousands of tenants were put at risk of homelessness by a section 21 eviction. I cannot remember the precise figure, but I think the last Government data release showed that just under 80,000 tenants had been put at risk of homelessness as the result of a section 21 notice since the Government first committed to abolishing section 21. And we are talking not just about those 80,000, but about however many tens of thousands more will be put at risk of eviction while the Government delay the enactment of the provisions on the basis of court reforms.

Renters (Reform) Bill (First sitting)

Debate between Mike Amesbury and Matthew Pennycook

Committee stage
Tuesday 14th November 2023 Public Bill Committees

[Mike Amesbury]

Q The Select Committee advocated for specialist housing courts. What is your assessment of that? Would it help matters?

Richard Blakeway: The courts themselves, or some aspects of the courts, have talked about the simplification of the courts and the creation of a housing court. My assessment of that is that an ombudsman is an alternative to the courts. Therefore, you need to be clear about why you might use the redress route, depending on what outcome you are seeking, alongside the court route, and a simplification of the court route, potentially through the creation of a single housing court, for example. That would be really beneficial, by making clear people’s rights, so that they can consider, “Do I want to go through the courts process, because this is the outcome I am looking for? Or do I use the ombudsman process?”

One thing I would stress is that an ombudsman should not be perceived as dealing with leaky taps or broken windows. These are not low-level disputes; we deal with some complex disputes in our current casework, as Committee members will have seen through our decisions. That approach needs to be applied here. The more you can apply that approach, the greater confidence people will have in a free and impartial alternative to the courts, or a free alternative to the courts, rather than feeling that their only effective route to redress is the courts process, given all the pressures on it.

Paul Dennett: Just to respond to the point about a housing court, we have to be careful that it is not a distraction from getting on with legislation. First, we do not believe the court backlogs are severe enough to warrant a delay in making progress with this legislation. We are therefore calling on the Government to publish that evidence, based on the court backlogs, in order to inform how best we implement the abolition of section 21. If courts are found to be in sufficient need of improvement to delay the ban on section 21 evictions, we call on the Government to commit in law to delivering a strategy based on evidence to reduce the backlog, backed up by sufficient funding and a specified date. To go down the road of considering a housing court would delay all that, and would be of real concern to many people in the country.

[Matthew Pennycook]

Q I want to ask a niche question about local authority investigatory and enforcement powers; I hope I explain myself clearly enough for you to understand. There is the issue we have discussed about the new duties and responsibilities in the Bill, which, assuming they are sufficiently resourced and supported, should work well, and which we support.

The White Paper also committed the Government to exploring and bolstering local authority enforcement to tackle a wider range of standards breaches. That is not in the Bill. We have a commitment in the King’s Speech, as one of three areas for the Government to bring forward amendments to make it easier for councils to target enforcement action and arm them with further enforcement powers. Could you speculate on what we might expect the Government to bring forward in that area? What would you like to see? Should we seek to weave into the Bill the more expansive measures outlined in the White Paper?

Paul Dennett: The Bill deals with enforcement for local authorities quite adequately. It is about how we resource that and develop the workforce within local government, and how we ensure that this legislation is genuinely resourced and empowered to deliver on what we are setting out here. At the end of the day, any legislation and regulation is only as good as our ability to enact it.

To enact it requires a trained, skilled and developed workforce. I say that against our losing many people from regulatory services, certainly since 2010-11. It also requires the resources to employ people to do the work, gather the data and intelligence, prepare for court and, ultimately, work with landlords, ideally to resolve matters outside of the courts, if we can do that. That is the LGA’s position on all this.

We would like to be in a position of having a working relationship whereby we resolve matters outside of complaints systems, outside of courts, working through local authorities. Nevertheless, if that is required, it is important to have a skilled, resourced workforce. I stress the importance of resource, because local authorities spend an awful lot of money these days on children’s services and adult social care. Those are responsive budget lines that ultimately consume a lot of our budgets and that therefore diminish our ability to get on and do some of that regulatory activity in local government. The legislation is there for enforcement; we just need the resources to get on and do it, and we need the workforce strategy to train the people of the future to enact this and, ultimately, to prepare to support landlords and tenants in this space.

Richard Blakeway: That is a really interesting question, Matthew; I have a couple of thoughts in relation to it. It is perhaps worth testing—if, for example, the ombudsman is seeing repeated service failure in a particular area—what powers there might be to address those kinds of recurring systemic issues, and whose role and responsibility it should be. That goes to the heart of your question about clause 29 and the relationship between the various parties.

The second thing, which goes back slightly to your first question, is how redress is scoped in the Bill. The one area that I would highlight—I can understand why it has been introduced, but it might not stand the test of time—is the cap on the financial compensation that an ombudsman can award. At the moment, we do not have a cap. The Bill proposes a cap of £25,000. I can understand the motivation there and, as an ombudsman, we are always proportionate, transparent and clear about the framework in which we work when awarding compensation. None the less, in time to come, £25,000 might not seem an appropriate sum. It also slightly incentivises people to think of the courts, which do not have a cap, to solve their dispute, rather than using an ombudsman.

It is critical that the ombudsman has sufficient power to enforce its remedies, as well as the council being able to enforce its role and responsibilities, but the cap might be something to re-examine.

Future of Social Housing

Debate between Mike Amesbury and Matthew Pennycook

Wednesday 19th April 2023 Westminster Hall

[Mike Amesbury]

rose—

[Matthew Pennycook]

rose—

[Rachel Maclean]

I give way, first to the hon. Member for Weaver Vale, who first asked me to.