Leasehold Reform

Andrew Gwynne Excerpts

Tuesday 23rd May 2023 Commons Chamber

[Lisa Nandy]

I pay tribute to my hon. Friend for the work that his Committee has done on this issue over a long period of time. As he said, there is no reason that this should continue except for a lack of political will to do what we have all acknowledged is the right thing.

Into this absurd scenario steps the current Secretary of State. I know that the right hon. Gentleman has the right intentions—indeed, his record has been clear. On 9 June last year, he told this place:

“it is absolutely right that we end the absurd, feudal system of leasehold, which restricts people’s rights in a way that is indefensible in the 21st century.”—[Official Report, 9 June 2022; Vol. 715, c. 978.]

On 30 January this year, he said in response to a question I posed to him:

“Finally, the hon. Lady asked if we will maintain our commitment to abolish the feudal system of leasehold. We absolutely will. We will bring forward legislation shortly.”—[Official Report, 30 January 2023; Vol. 727, c. 49.]

Now, we are told that the Secretary of State was being too maximalist. We have had grumbling from Government Back Benchers that the Secretary of State is being too socialist. Downing Street has stepped in, plans are being rowed back and he is not even able to set foot in the Chamber today. It is a bit of a mess, isn’t it?

In just a few months, the Government’s whole housing policy has completely unravelled. As my hon. Friend the Member for Hornsey and Wood Green (Catherine West) said, they crashed the economy and sent mortgages through the roof. They caved in to their own Back Benchers and, in one stroke, ensured that their own housing targets were not worth the paper they were written on. That led to dozens of councils reducing or halting altogether their house building plans, and a collapse in the projected number of houses built in coming years, in the middle of a housing crisis. The Home Builders Federation warned earlier this year that new housing supply in England would soon fall to its lowest level since the second world war.

While the Government are locked in internal battles on making basic improvements for renters, their Levelling-up and Regeneration Bill—their flagship legislation that was supposed to reform an archaic planning system—is stuck in the House of Lords, where it is commonly referred to as the Christmas tree Bill, as it has so many amendments attached to it. It does make us wonder what is actually the point of this Government.

The Secretary of State was clear that he would abolish leasehold. No one thought that it would be done overnight. The Law Commission report sets out a clear road map on enfranchisement, commonhold and the right to manage. The major leasehold groups have always recognised that it would take some time to phase out this archaic system, and so have we, but there is no excuse for inaction on the manifesto commitment to end the sale of new private leasehold houses, or for delaying the start of the process of phasing out existing leasehold and making commonhold the default of the future, as my hon. Friend the Member for Greenwich and Woolwich (Matthew Pennycook) has often said.

[Andrew Gwynne (Denton and Reddish) (Lab)]

My hon. Friend is setting out a compelling case for why leasehold needs to be consigned to the dustbin of history. It is not just the feudal system that needs to go but the sharp practices that go along with it. I have constituents who live in their own home. They do not own the land it is built on—they rent it—but they are not able to make even the most basic alterations to their house without getting the permission of the landowner, who then charges extortionate fees. That is just wrong, isn’t it?

[Lisa Nandy]

My hon. Friend is right. People who have bought their own home should have the right to change their doorbells and make basic alterations without seeking the permission of someone they have never met and will never meet. In many cases, they do not even know who that is. I pay tribute to him for his campaigning on this issue and for standing up for his constituents.

I ask Ministers to take this issue back to the Secretary of State when they next see him. He will know that the delay is a significant setback for leaseholders, who have been left waiting for far too long, and for all of those who have campaigned so hard and for so long and thought they could finally see the light at the end of a very long, very dark tunnel. Let me place on record our thanks to Katie Kendrick at the National Leasehold Campaign and Commonhold Now for all they continue to do. Tireless advocates in this place include my hon. Friends the Members for Weaver Vale (Mike Amesbury) and for Ellesmere Port and Neston (Justin Madders), and the father of the House, the hon. Member for Worthing West (Sir Peter Bottomley).

I hope that the Minister will be keen to talk about legislation that we are told will be forthcoming in the autumn. The Labour party strongly believes that it is a no-brainer to crack down on unfair fees and contract terms, to require transparency on service charges and to give leaseholders the right to challenge rip-off fees and conditions or poor performance, along the lines we have heard about from many Members present.

--- Later in debate ---

[Matt Western]

My hon. Friend is absolutely right. It is incredibly complex and extremely expensive to go through that process.

The last Labour Government’s Commonhold and Leasehold Reform Act 2002 introduced commonhold as a new tenure, which this Government should have pursued over the past 13 years. Progress was not made for two reasons: the conversion from leasehold to commonhold requires consent from everyone with an interest in the property, as my hon. Friend just said; and developers do not want to build new commonhold developments because there is no incentive and no financial upside, as my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders) highlighted. This Government have ignored these exploitative practices, and the ever-louder calls from the public to end them, for 13 years. They launched the Commonhold Council two years ago, so will the Minister update us on what has happened with that? It appears to be nothing.

The public are aware of the Conservative Government’s broken promises. Their 2019 manifesto promised to address this issue by implementing a

“ban on the sale of new leasehold homes”.

That has not happened. Even the Housing Secretary admitted that they should end this “absurd, feudal” system, but we are 13 years on from the last Labour Government and nothing has happened. This Government have let down the public. I appreciate that there is a high incidence of these cases in the north-west England, but there are also some in my constituency. Groups of residents across my local towns are keen to take control of the development of their blocks, but it is too expensive and complicated to do so, as many Members have been saying. In one block of 70 flats, the residents have managed to take that on, but the previous managing agent took £76,000 from the residents’ account and they have not been able to recover the money. The residents are keen to ensure that managing agents are better regulated in any proposed legislation.

As my right hon. Friend the Member for North Durham (Mr Jones) said, there is so much sharp practice out there. That is why Labour would implement the three Law Commission 2020 reports in full. They included measures designed to make it easier for leaseholders to convert to commonhold; to allow shared ownership leases to be included within commonhold; to give owners a greater say over how the costs of running their commonhold are met; and to ensure that they have sufficient funds for future repairs and emergency works.

[Andrew Gwynne]

My hon. Friend mentioned sharp practices, which I mentioned to those on the Labour Front Bench at this debate’s opening. I can give many examples from my constituency, but one of the latest involves leasehold companies, or their agents, sending out innocuous questionnaires to people about improvements they may have had done to their homes. People are filling those in and sending them back in good faith, and then getting a bill for the privilege.

[Matt Western]

My hon. Friend is absolutely right about that, and I have examples of that in my constituency; letters will suddenly appear demanding, let us say, £13,000 from each and every resident for changes that have been made and claims of service.

For some time, Labour has been pressing the Government to bring forward the promised leasehold reform part 2 Bill and to ensure it contains those recommendations set out in the Law Commission reports of 2020. As I mentioned at the outset, we have had so many scandals associated with property and mis-selling over the years, including endowment mortgages. There is now an entire parasitic industry surrounding home ownership in this country and it needs to be addressed. The situation is so much better in other countries around the world.

Twenty-one years ago, Labour introduced the Commonhold and Leasehold Reform Act 2002. For the past 13 years, the Government have not seen this issue as a priority. The developers are profiteering and there is a correlation between the profits being made by those companies and the exploitative practices that go on around leasehold developments. This is a scandal and Labour in government will bring an end to it.