Housing: Unfair Leasehold Agreements

Baroness Couttie Excerpts

Tuesday 3rd March 2020 Lords Chamber

[Baroness Bloomfield of Hinton Waldrist]

I agree that the legislation has taken a long time in its gestation, but we have done a number of things since Javid’s report in the other place. For example, we have asked the Law Commission to undertake a series of reports, which it will start producing this spring, about standardising the enfranchisement process, so that buying and extending a lease is easier, cheaper and quicker. It is also going to make it easier for leaseholders jointly to obtain the right to manage and review how commonhold works, so that it may become a viable alternative for existing and new homes. Together with the leaseholders’ pledge that we put in place over a year ago in consultation with housebuilders, that has gone some way—but not nearly far enough—towards mitigating the effects of the actions of those housebuilders.

[Baroness Couttie (Con)]

My Lords, what are the Government doing to prevent house owners falling into the assured tenancy trap?

[Baroness Bloomfield of Hinton Waldrist]

I acknowledge my noble friend’s significant interest in and knowledge of this area from her position in Westminster Council. The assured tenancy trap relates to property sold as a lease but where the ground rents, due to escalation, exceed the £250 threshold outside London and £1,000 in London; in effect, it becomes an assured shorthold tenancy, meaning that the owner does not have the same rights as a normal owner and it can be repossessed if they fall into arrears. The Government are committed to addressing this issue via legislation, which will take long leases completely out of the assured shorthold tenancy regime and prevent leaseholders being affected by this issue completely.