Leaseholders and Managing Agents

Andy Carter Excerpts

Tuesday 28th February 2023 Westminster Hall

[Andy Carter (Warrington South) (Con)]

It is a pleasure to follow the hon. Member for Brent North (Barry Gardiner). I agreed with pretty much everything he said. I am delighted to speak in this debate, because the issue is so pertinent to constituents in Warrington South. I am keen to hear from the Minister about progress on the promised reforms to leasehold that we expect to see announced in the King’s Speech.

My noble Friend Lord Greenhalgh, when he was the Minister responsible, made a promising start to the process when he brought in the first stage of leasehold reform, to crack down on exploitative freeholders by removing escalating ground rents. Now it is time to ensure that the next stage of reform delivers for those who are currently trapped in the leasehold system.

The north-west has one of the highest proportion of leasehold dwellings in the country, next to London. The most recent statistics for 2019-20 put the proportion at around 31%—the highest region outside of London. Throughout my time as the Member of Parliament for Warrington South, residents have raised issues regarding leasehold time and again. There are issues in Chapelford, Edgewater Park, Chaise Meadow—I could list endless developments in Warrington South that have been built over the past 20 years under the leasehold system and where problems have been raised.

Although I of course welcome the Secretary of State’s proposals to address the problems associated with leasehold sales, I say to the Minister that there is a growing worry among many of my constituents that the difficult situations they find themselves in may not be completely addressed by what we have heard so far. The constituents I talk to are concerned about those who have purchased properties in the past 20 years or so and are stuck with problems of ever-increasing service charges, although they receive very little for those charges, as the hon. Member for Brent North said.

If anything, the problems are growing and getting worse. That applies in particular to those who purchase leasehold houses rather than flats. Colleagues may recall that I raised this issue in a speech in the Christmas Adjournment debate, with particular regard to Steinbeck Grange in my constituency. I pay tribute to Mike Carroll, one of the residents who lives there, who was the first constituent to contact me when I was elected. He has persevered for about 14 years in trying to tackle this problem. He has said that it has affected his life so significantly that he has occasionally had to think hard about how to continue with the fight. He has been browbeaten at every opportunity and has required a tremendous effort to keep going.

Residents not only have to pay fees but run into difficulties when they try to approach the freeholder. They are faced with complicated, protracted processes, in which they cannot even get information about the leaseholds for their homes without having to spend money. If those constituents are trapped in leasehold, it makes selling those properties incredibly difficult. A number of solicitors have approached me in Warrington to say that they had been asked to act for people buying the properties and had advised them not to. Developers had then recommended solicitors who disappeared overnight, so that the process could go through. That strikes me as a real scandal.

The Competition and Markets Authority looked at this situation for two years and did not really conclude anything. I say to the Minister that that was a missed opportunity for a deep dive into what is going on, not just with developers but with freeholders. Will he ensure that the proposals that the Department brings forward in the next Session address these problems? It is vital that people wanting to get out of leasehold can do so without facing extortionate fees that either leave them trapped in leasehold indefinitely or result in their being short-changed when they leave the system.

That legislation is desperately needed. I want to see a solution, my constituents want to see a solution, and I sincerely hope that the Department will take heed of that when they present their leasehold reforms in the King’s Speech.

[Several hon. Members rose—]

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Lee Rowley)]

Thank you for the opportunity to talk about this hugely important topic today, Sir George. I congratulate the hon. Member for Brent North (Barry Gardiner) on securing the debate. We have covered a significant amount of ground. I am not sure that I can do justice to the issue in the seven or eight minutes that I have if I am to allow the hon. Member a few moments to comment at the end, but I will try to cover as much as I can.

I am grateful to all hon. Members who have contributed. As hon. Members will know, there is a significant overlap between the people who are in the Chamber today and those who have stood up for their constituents and taken their concerns to the Department over the last few months. As hon. Members will know, we have been in correspondence on a number of occasions, and I am grateful to them for highlighting issues, particularly in my part of the portfolio, around building safety, in the Department for Levelling Up, Housing and Communities. I am grateful for their time and the efforts that they go to on behalf of their constituents in both those areas.

We have discussed two broad areas today. One is the broader situation with regard to leasehold and the reforms that are coming in, and the other is the more specific question of building safety. I will try to take those in two buckets, if I may, then talk about some of the specific points that hon. Members have raised. As numerous hon. Members have highlighted, we made a series of commitments from 2018 onwards on leasehold in general. Reform in this area is necessary, is important and needs to happen. That covers a number of things raised by the hon. Member for Brent North, and other matters.

As my predecessor, the noble Lord Greenhalgh, indicated, the Government have committed to abolishing marriage value at the earliest possible opportunity. On service charge transparency, the Secretary of State has highlighted the fact that we are absolutely committed to providing more information, for exactly that reasons that the hon. Members for Poplar and Limehouse (Apsana Begum) and for Ellesmere Port and Neston (Justin Madders) indicated: the importance of transparency in those discussions, so that people know what they are paying for when they are given bills and charges.

I have heard the comments about managing agents. We recognise that, as in all systems, particularly ones where there are multiple individuals and entities involved, there are people who are exemplars and who do things well, there are people who do things less well, and there are people who do things badly. It is important that we call out bad practice and we take the opportunities where we can and where it is proportionate and reasonable to do so, both now and in the future, to be able to reduce the propensity for bad practice. I know that my right hon. Friend the Secretary of State for Levelling Up, Housing and Communities will make that clear when we bring forward more information about our proposed leasehold reforms in due course.

In answer to the questions raised by the Opposition spokesperson, the hon. Member for Greenwich and Woolwich (Matthew Pennycook), while I cannot anticipate what will be in the package, we are committed to bringing forward those reforms. We have said that we want to undertake reform in this Parliament. There is still time to do that and my right hon. Friend the Secretary of State will provide more information in due course, when he is able to do so.

[Andy Carter]

This is a brief intervention. I have invited many of my hon. Friend’s predecessors to Warrington South. None have made it, because they have not been in position for long enough to get there. May I extend an invitation to him to come and meet some of the leaseholders who are facing problems in Warrington South, so that he can hear directly from them before the final piece of legislation is put forward?

[Lee Rowley]

I am grateful to my hon. Friend for his kind invitation to the north-west. I will speak to the Housing Minister, my hon. Friend the Member for Redditch (Rachel Maclean), who has been in post for a couple of weeks, because she is taking forward these specific points on leasehold and I want to ensure the right conversations are had with the right people.

I will respond to a few points on building safety, for which I am responsible in the Department; I am happy and keen to hear more about the issues that have been raised. Important points about significant increases in insurance were made, which we recognise and understand. The Association of British Insurers was asked to look at the issue a number of months ago and find a solution. I meet the Association on a regular basis—I did so most recently at the end of last week—and I will continue to do so. We hope that it will be able to bring forward a scheme on insurance in the coming months.

There was reference to lending. I hope hon. Members are starting to see a change with regard to building safety. I met all six big lenders before Christmas and we have come to an agreement with them through UK Finance. The market should now start to become more functional and successful again. I am receiving data from each of the banks on a regular basis—indeed, just a couple of days ago, I looked at the data I received from Santander and Barclays—in order to understand what is going on and how we can separate out, as much as we are able, the challenges that are known, understood and need to be remediated over a number of years, so that people can live their lives and get on with making choices about where and how they want to live. I welcome views from hon. Members in the months ahead about whether they have seen those changes.

I am conscious that I need to conclude in about two minutes. On building safety, my right hon. Friend the Member for Stevenage (Stephen McPartland) has been a stalwart; I give him huge credit for making progress on the issue with colleagues across the House, irrespective of their party. He made a vital point about lived experience; people have seen this, lived it and breathed it for many years. As the responsible Minister, I have tried to make visits. As my hon. Friend the Member for Ipswich (Tom Hunt), who is no longer in his place, indicated, I visited Cardinal Lofts and spoke to residents. I went to Wicker Riverside in Sheffield within a few weeks of becoming Minister, talking to leaseholders and people who were at the forefront; I appreciate the challenge and difficulty they face. That is reason why my right hon. Friend the Secretary of State is keen that we make progress. From the work we are doing on Vista Tower, my right hon. Friend the Member for Stevenage will know how important it is for us to call out bad behaviour and for us to make progress.

Finally, the hon. Member for Vauxhall (Florence Eshalomi) raised a case where charges have increased exponentially. Without knowing any of the detail, I would be very happy to receive additional information on that. I would be very happy, in principle, to come and visit, or to speak to those leaseholders. It is important, as a Minister, and for the Department, that we look at the macro level, at the changes and how that is occurring, and check that it is working in individual areas, so I would be very happy to see more information on that.

To conclude, these are hugely important issues that affect people’s lives, so I absolutely appreciate the points that have been made regarding both leaseholds and the reforms needed in general. I understand the urgency, and I hope that we can say something more corporately on that soon, particularly on building safety. We need to make progress on remediation, on top of the good progress that we have already made, but there is a long way to go. While I am in post, I am committed to trying to make as much progress as possible so that the people who are affected can get on with living their lives again, as we all want them to.