Leasehold Properties: Building Insurance

Baroness Thornhill Excerpts

Thursday 15th June 2023 Lords Chamber

[Lord Evans of Rainow (Con)]

My noble friend is absolutely right, and I pay tribute to the work he does on housing. The Government remain determined in their promise better to protect leaseholders and empower them to challenge unreasonable costs, and to make it easier and cheaper for them to extend their lease or buy their freehold. We wish to extend the benefits of freehold ownership to more homeowners, and in line with our manifesto commitments, we will continue leasehold reform within this Parliament. We are working closely with the Law Commission to bring forward game-changing reforms to the system and we thank the commission for all the work it has done in this area to date. However, the Government cannot pre-empt the King’s Speech, which we expect by the autumn, by confirming what will or will not be in future legislation.

[Baroness Thornhill (LD)]

My Lords, insurance costs and service charges are rocketing for the group known as non-qualifying leaseholders, who are not eligible for support from the Government to remediate their fire safety issues, which they played absolutely no part in creating. Can the Minister say what the Government are doing to support this group of people, who are facing not only massive bills but mental and physical health problems as a result of the prolonged stress that this is causing?

[Lord Evans of Rainow (Con)]

The noble Baroness is right: premiums have increased, on average, threefold for buildings with identified fire safety issues. The FCA, which regulates brokers and insurers, reported in September 2022 that the insurance premiums increased by 187%—that is completely unacceptable. The Government will ban commissions and press insurance brokers to reduce and clarify charges as a matter of priority ahead of reforms coming into force. However, the Government cannot pre-empt the King’s Speech at this moment; later, I will report back to noble Lords.