Leasehold Reform

Danny Kruger Excerpts

Tuesday 23rd May 2023 Commons Chamber

[Danny Kruger (Devizes) (Con)]

I agree with what the Minister said about the Government’s plans. It is good that we have cross-party consensus on the need to radically reform leasehold. I recognise and agree with the points that have been made by Members on both sides of the House. It is a feudal system that ultimately needs to be abolished, in ways that I will come on to describe.

There is a danger, perhaps, that we leap straight from one extreme to another: we Conservatives have a bit of a fetish for property ownership, and there is a small danger of our making a cult of freehold and the principle of owning one’s house outright. I understand why we do this—we all want to own our homes, and we believe that a free market will help to grow the supply of new homes that we urgently need—but there is a limit on the supply of new house building, and that limit is land. It is possible to release more land into the market, and we need to do that, but there do need to be limits; I hope that even the most extreme libertarians on the Conservative Benches will recognise that there must be limits to the release of land for house building.

The free market must have some limitations, because without limits, or with limits that companies with deep pockets can game at the expense of local communities, it is not a free market at all; it is a speculator’s charter. We need a system that is both better than the feudalism of leasehold and better than the perversion of capitalism that we sometimes see in our communities.

We need to grow supply, and I recognise that we need more freehold and more traditional ownership, but as I say, land is finite, and the price of a house, which we all worry about, is really the price of the land underneath the house. There are two effects of this. The first is that the building—the bricks and mortar—hardly matters to the house builders. We see the way they knock up buildings without beauty, without quality and without much innovation. I pay tribute to the work that my hon. Friend the Member for South Norfolk (Mr Bacon) has done on self-build and the opportunities for far better innovation, beauty and quality in house building if we recognise that the quality of the structure matters more than the land it is built on.

The second effect of the system we have at the moment, whereby the price of the land is the real factor, is that the overall price of housing rises. We now have the highest house prices in history. That has a reinforcing effect, because it privileges the volume house builders—the speculators in land—who can afford to bid at these auctions and who bet on rising prices, hoard sites and hold back land from development; they game the development system. I mention in passing the egregious five-year land supply rule, which is such a gift to developers, who ride roughshod over local plans and the wishes of local communities. There are a number of cases in my Wiltshire constituency where that is a problem.

[Sir Peter Bottomley]

May I add one point, which I hope my hon. Friend will not regard as discordant? People ought to know the sums that public affairs companies and lobbyists get paid by the developers, those involved in exploiting leaseholders and those who buy freeholds, for lobbying the Prime Minister’s office, the Treasury, the Department and the media. If equal resources could be given to the National Leasehold Campaign, the cladding groups and the Leasehold Knowledge Partnership, we would have equality of arms.

[Danny Kruger]

My hon. Friend is right: the way these companies operate is shameful.

The price of land is the issue. There is a way to get through this, and it is along the lines of what we are debating today: not leasehold and not pure freehold, but a form of commonhold. I want to end by mentioning a particular form of commonhold that I would like to see much more of and that we see a little of around the country. My hon. Friend the Member for Worthing West (Sir Peter Bottomley) mentioned the need for housing providers that can be trusted. They do exist, and they exist using leasehold: it is the community land trust model. Community land trusts act as long-term stewards of community housing, and they often use ground rents as a way to finance their work, with the consent of leaseholders.

We need to worry about scrapping leasehold without replacing it; that would be bad. We need to replace it with something along the lines of commonhold. Around the country, we see brilliant innovations of community land trusts in pockets of rural and urban areas. The Government have indicated in previous debates that any ban on leasehold would include an exemption for community-led housing, and I hope that consideration will be given to ensuring that community-led housing is also protected under any changes to leasehold and any replacement with commonhold.

I pay tribute to the Community Land Trust Network. The Secretary of State came to an event that I hosted in Parliament a few months ago. A number of really inspiring CLT groups came to talk about their experience. I encourage the Government to listen to the Community Land Trust Network and to use the ongoing consultation on the national planning policy framework to make real changes, such as reopening and extending the community housing fund and, crucially, helping local CLT groups and community groups to buy land. At the moment, they find it so difficult to outbid the speculative developers, because they intend to make a large proportion of the housing affordable, and they simply cannot make the numbers add up in the way the speculators can.

We need to find ways to give more land to CLTs, and my suggestion is quite simple: we need to transfer public land quite deliberately to community land trusts. At the moment, legislation states that public landowners who want to divest themselves of those assets need to seek “best consideration”, which local authorities or other public landowners often interpret as simply seeking the highest price. We need to specify that “best consideration” means the objects set out by the Secretary of State, which I suggest should include affordability and community ownership. We also need to enable CLTs to buy private land at agricultural prices, not speculative prices.

I welcome the cross-party consensus on reforming leasehold—I think that is absolutely right. I hope consideration will be given to ensuring that these community-led housing models will also be protected in the new plans and will be able to thrive. I welcome the debate, and I give thanks to the shadow Secretary of State, the hon. Member for Wigan (Lisa Nandy), and to Members on the Opposition Benches who are campaigning alongside Government Members for these sorts of reforms. I also share my hon. Friend the Member for Worthing West’s wish that we do not push this rather partisan motion to a vote.