Leasehold Reform

Derek Twigg Excerpts

Thursday 21st March 2019 Commons Chamber

[Mr Betts]

I am tempted to say yes. What we said in the report was that we need to move to a whole new approach, where commonhold becomes the default option for flats, we abolish leasehold for houses, and if we put the sorts of restrictions on ground rents and permission fees that we have been talking about, there will not, ultimately, be any incentive for freeholders and that will drive it out of the market. I think the issue is twofold: stopping it on new properties and removing the incentive for freeholders, so their income streams, which are wrongly obtained now, will not be available in future.

[Derek Twigg (Halton) (Lab)]

I congratulate my hon. Friend and the Select Committee on an excellent report. Like many other colleagues here today, I have many constituents who are affected by this terrible scandal. The Committee rightly addresses how people can get redress and compensation. Clearly, there is still a lot of uncertainty. For those who have already been hit, how they get redress and compensation is a big issue. During his presentation, my hon. Friend said that he does not think retrospective legislation should in any way conflict with human rights legislation. Can he say a bit more about that?

[Mr Betts]

We took evidence on that. There are caveats and conditions on human rights legislation. If there is a general good to be obtained, that can outweigh the particular interest of private owners of property. The Government have already got around that on enfranchisement. They have asked the Law Commission to recommend a simple enfranchisement that could mean that the freeholder receives less compensation when the leaseholder enfranchises. In that case, the Government are already considering reducing the value of enfranchisement to freeholders. That is no different from a recommendation to reduce the value of ground rents to freeholders in principle. That probably needs further work, but we had advice that it is possible. There will be a requirement for some compensation, but it need not be full-value compensation.