Leasehold Reform and New Homes

Adam Holloway Excerpts

Wednesday 28th February 2024 Westminster Hall

[Adam Holloway (Gravesham) (Con)]

It is a great pleasure to serve under your chairmanship, Ms Harris, and I thank my hon. Friend the Member for Harborough (Neil O’Brien) for securing the debate. He is doing a great service to leaseholders in every constituency and I can see that the Minister is determined to improve the situation for them. All Members receive loads of emails about this issue from constituents, who are often in very stressful situations regarding their leaseholds, and I hope that the wide-ranging reforms that the Government are pushing through will change that. Of course, for many, those changes cannot come quickly enough.

I want to raise one discrete issue that I urge the Minister to consider. When constituents contact me about an issue with leasehold, be it a service charge dispute or a problem with lease extension or parking, a theme that comes up far too frequently is that the leaseholder is required to receive advice on their purchase from a conveyancer recommended to them by the estate agent, who is of course the representative of the seller-freeholder. Although I understand that there is nothing unlawful or improper about that arrangement, its practical effect seems to be that the buyer does not get the robust and impartial advice that they need.

We have a particularly upsetting case in my constituency involving the purchase of a new build shared ownership flat using solicitors that the seller told the leaseholder to use. At no point was the purchaser told that if they wanted to extend the lease, they would have to do so before it dropped below 80 years—the marriage value threshold. They have missed that chance and now face a huge bill to extend the lease. That case may yet be greatly assisted by the abolition of marriage value, although I think the Minister should consider some of the unintended consequences that may come from that—but that is a separate question. The point remains that leaseholders, and particularly first-time homeowners, need clear and impartial advice about their rights and responsibilities, and any pitfalls and possible expenditures, during their lease term.

When I wrote to the Minister on this point, I was told:

“We can also say that we would expect conveyancers to deliver an effective service to their clients, including making them aware of any changes or conditions attached to the property before a purchase is finalised. It is essential that conveyancers deliver an effective service to their clients.”

Of course it is, but the problem is that few people have the means to take action when they do not receive an effective service, so the opportunity to hold conveyancers to account is limited for many people.

The Government should act to ensure that leaseholders have access to high-quality, unbiased legal advice. It must be relatively straightforward for the Government to prevent sellers from recommending conveyancers, simply leaving buyers to choose their own conveyancer, as most purchasers do already. One possible route to achieving that, alongside looking again at the rules relating to referrals to conveyancers—we actually need tougher rules—is an enhanced role for the Leasehold Advisory Service. As many people will know, that organisation provides brilliant advice to many leaseholders, but with additional resources it could perhaps do more to provide bespoke support in cases where it appears that the legal advice has somehow been dud. There does not necessarily need to be a cost to that; it might operate as a deterrent and straighten people up a bit.

Alongside new legislation, access to impartial advice and support when things have gone wrong would hugely empower leaseholders across my constituency, particularly in areas such as Denton and Springhead, and indeed across all constituencies, and we would spend less time late at night answering emails from people who find themselves in an unhappy and stressful situation.