Leasehold Reform (Ground Rent) Bill [Lords]

Debate between Desmond Swayne and Christopher Pincher

2nd reading
Monday 29th November 2021 Commons Chamber

[The Minister for Housing (Christopher Pincher)]

I thank the Front Benchers from the official Opposition for their support for the Bill. I am grateful to them, as is the whole House. It is a pleasure to see them still in their places. We know there is an Opposition reshuffle going on. It must feel to them that it is taking as long for the Leader of the Opposition to conduct his reshuffle as it is to reform leasehold. We trust that we can get on a little bit quicker than he can.

It has been a real pleasure to listen to the debate unfold. We have had a valuable and considered set of speeches. One of the ornamentations, one might say, of our Standing Orders is that they allow right hon. and hon. Members to range freely across the terrain in a Second Reading debate, and that is what has happened tonight. As the House will know, the Bill is narrowly focused on leasehold ground rent reform, but the debate has allowed the House to debate more freely the wider question of leasehold reform, retrospection and other matters. We will be addressing them in future, but let me say, before I make some further and more detailed points, that I am grateful to the hon. Member for Reading East (Matt Rodda) for his very thoughtful contribution. It sounds to me as though he is going to write me and the Under-Secretary of State for Levelling Up, Housing and Communities, my hon. Friend the Member for Walsall North (Eddie Hughes), a very long letter. We look forward to working with him to resolve the issues he raised.

I am grateful to my right hon. Friends the Members for Chipping Barnet (Theresa Villiers) and for New Forest West (Sir Desmond Swayne), and my hon. Friend the Member for Loughborough (Jane Hunt) for raising the issue of retirement sector ground rent reform. As the Under-Secretary of State for Levelling Up, Housing and Communities, my hon. Friend the Member for Walsall North, said, we have made it absolutely clear that the retirement sector has had an exemption of a further 12 months to get its business model in order. We believe that that is a right and proper amount of time, because there are a number of business models that the sector can use to effectively and appropriately levy reasonable charges that are transparent and fair on residents. It sounds as though my right hon. and hon. Friends may be interested in amendments. They know the process by which to pursue those, if they so wish. However, there will always be disparities between one set of buildings and another and between new buildings to which ground rents will not apply and older buildings to which ground rents will apply. I suspect that those differences will be factored into market calculations or will have little effect on the actual challenges that face residents.

[Sir Desmond Swayne]

The case for an amendment—I thank the Minister for his guidance in that respect—on the retirement sector is that it was clearly given an exemption and was assured throughout last year that that exemption would hold, but that exemption was suddenly withdrawn in January this year. Given the time that it takes to change the model and to sell such properties, this is crying out for amendment.

[Christopher Pincher]

I am grateful to my right hon. Friend; he is not so much an ornament as an energetic battery in this House. We look forward to seeing what further proposals he has in due course.

My hon. Friend the Member for Wimbledon (Stephen Hammond) put his finger on it when he described how complicated the matter of wider leasehold reform is. He asked whether the Solicitors Regulation Authority and conveyancers will be engaged; whether tighter definitions will be employed; what happens in more complex developments to repair charges; and what the interaction is with the Building Safety Bill. That is why the Bill is so narrowly defined, as the Law Society advised—so that we can get on and deal with the most egregious offences on ground rents and then move on to the more complicated matter of wider leasehold reform.

As my right hon. Friend the Member for Newark (Robert Jenrick) said in what I thought was a very eloquent and forceful speech, making it clear without saying a word how integral he has been to the advancement of these reforms, they are really quite challenging. We know that leasehold is woven into the tapestry of our law and our tort. We know that in parts of the country, particularly the north-west—I think you know it as well as anybody, Mr Deputy Speaker—businessfolk of yesteryear, factory owners, would buy land in order to build houses and tie workers to those factories. Unpicking those sorts of complicated arrangements needs to be thought through carefully. With an all-you-can-eat feast, as the hon. Member for Weaver Vale (Mike Amesbury) knows full well, if someone stuffs themselves rather too quickly and rather too much, there may be unfortunate consequences down the line. We want to avoid those sorts of challenges with this Bill.

A great deal of thought has gone into the definition of rent to avoid the sort of loopholes that the hon. Member for Manchester Central (Lucy Powell) mentioned. We want to ensure that we close loopholes that would allow freeholders or landlords to collect ground rent. We considered a closely defined meaning for “ground rent”, but at the end of the day, we came to the conclusion that that would be something of a fixed target, because experience teaches us that clever operators with clever lawyers often find loopholes in such circumstances. A flexible definition of rent will help us to ensure that the tribunal will have the flexibility to consider what actually represents a prohibited rent, even if it is not explicitly called “ground rent”—the sorts of prohibitive and prohibited charges to which she referred.

We have made it absolutely clear that we will introduce legislation to ban leasehold houses; we have made that manifesto commitment and will introduce legislation as soon as we are able. We will also ensure that the second part of our legislative reform addresses the challenges with respect to existing leaseholders and retrospection, because we are committed to addressing the historic imbalance in the system.

Meanwhile, I am grateful for the work that the CMA has done, which I hope the whole House will welcome. We want to make sure that the CMA moves as quickly as possible to tighten up on egregious practices; we look forward to its report and to the next steps that we will then undertake. I assure the House that we will move as rapidly as possible.

My hon. Friend the Member for Blyth Valley (Ian Levy) is not in his place, but he has certainly raised with me the issue of ground rent in future long leases. In January, we announced that we would legislate to change the way in which the cost of buying a freehold or extending a lease is calculated to make it cheaper and easier for leaseholders. I hope that that gives my hon. Friend some reassurance.

The Bill is the beginning of a process that we, the Conservative Government, have started and that others, for too long, have shirked. It will ensure fairness and transparency in our leasehold system. I look forward to working with right hon. and hon. Members across the House in the coming weeks to get this vital legislation on the statute book and working for leaseholders. I commend it to the House.

Question put and agreed to.

Bill accordingly read a Second time.

Leasehold Reform (Ground Rent) Bill [Lords] (Programme)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Leasehold Reform (Ground Rent) Bill [Lords]:

Committal

(1) The Bill shall be committed to a Public Bill Committee.

Proceedings in Public Bill Committee

(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Thursday 9 December 2021.

(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.

Proceedings on Consideration and Third Reading

(4) Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.

(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.

(6) Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and Third Reading.

Other proceedings

(7) Any other proceedings on the Bill may be programmed.—(Craig Whittaker.)

Question agreed to.

Leasehold Reform (Ground Rent) Bill [Lords] (Money)

Queen’s recommendation signified.

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the Leasehold Reform (Ground Rent) Bill [Lords], it is expedient to authorise the payment out of money provided by Parliament of any increase attributable to the Act in the sums payable under any other Act out of money so provided.—(Craig Whittaker.)

Question agreed to.