Levelling-up and Regeneration Bill

Debate between Earl of Lytton and Lord Young of Cookham

Report stage
Tuesday 18th July 2023 Lords Chamber

[Lord Young of Cookham (Con)]

My Lords, I add a brief footnote to what the noble Lord, Lord Best, said in speaking to Amendment 71, to which I have added my name, and to what my noble friend Lord Lansley has said about Amendment 311. I endorse what the noble Lord, Lord Best, and my noble friend said about the willingness of Ministers to listen to us throughout the process. The government amendments respond to the concern that we all expressed in Committee about the potential loss of affordable homes.

I shall pick up the point made by the noble Lord, Lord Best, about the so-called viability loophole. What has been happening is that well-resourced developers, half way through a scheme, have turned to the local authority and said, “It’s no longer viable—and, by the way, we cannot build the affordable homes which were due to be built right towards the end of the scheme”. That left the local planning authority with the nuclear option of pulling the plug on the whole scheme or allowing it to go ahead and at least getting the open market houses. At the time, Shelter did some research, which showed that the use of viability assessments in 11 local authorities across England contributed to 79% fewer affordable houses being built in urban areas than would have built if the original agreement had been adhered to. Following that controversy, the Government introduced guidance and tightened up the rules in 2018; the new rules limited the use of viability assessments to reduce affordable housing to exceptional circumstances, such as a recession or similar economic changes. That was a step in the right direction.

My concern, which was echoed by the noble Lord, Lord Best, is that government Amendment 76 seems to go back on the 2018 changes and revert to the position that generated all the criticism about viability. I note in passing that the technical consultation criticised the current Section 106 agreements by saying that the

“planning obligations are uncertain and opaque … they are subject to negotiation (and can be subject to subsequent renegotiation), can create uncertainty for communities over the level of infrastructure and affordable housing that will be delivered”.

Is that not exactly what Amendment 76 does in referring to a development being economically unviable? It seems that what the Government are doing is virtually guaranteeing that no development will ever lose money, while the developer benefits from any gains above expectation. The levelling up Select Committee’s report expressed the same doubts last week.

I want to say a final word on Amendment 311, to which my noble friend Lord Lansley spoke. On 17 March, the Government published their technical consultation. It ran to 91 pages and asked 45 questions; it is not an easy read. The consultation ended on 9 June and the document said:

“Following the closure of this consultation, the government will assess responses. In doing so, a response will be issued that summarises the themes that emerged, before issuing a final consultation on the draft regulations after the Levelling Up and Regeneration Bill achieves Royal Assent”.


This means that we are debating Schedule 12 in a vacuum because we do not know what its structure will be. I am afraid that this is a feature of too much in this Bill.

When it published its report, Reforms to National Planning Policy, the Select Committee in another place picked up the same point. It also said that we are going to have real issues if we run the infrastructure levy and Section 106 in tandem, leading to arguments and complications. I was not wholly reassured by what the Minister in the other place said in response to the Select Committee’s query:

“If they say that it is too complicated and ask to change things, we will consider that”.


I am not sure that that is a great step forward.

So, on both issues—viability and the absence of the structure of Section 12—I hope that my noble friend the Minister will be able to provide the House with some reassurances.

[The Earl of Lytton (CB)]

My Lords, I will intervene briefly. I declare an interest as a chartered surveyor with some involvement in the development process.

I want to speak to the factor that links Amendments 71 and 94 and follows on from what the noble Lord, Lord Young of Cookham, has just said. I have been in the past a technical operator of the dark arts of development appraisal. I would be much less charitable than the noble Lord, Lord Stunell, in my comments about exactly what goes on here; for instance, how land values under option agreements are arrived at and how, with a click of a mouse on a proprietary development appraisal computer package, the matter can then adapt to a viability test for the local authority’s community infrastructure levy or Section 106 contribution purposes. Noble Lords would be astounded at the way in which a yield change here and a cost base there, as well as the adaption of a timeframe or the alteration of a contingency allowance—I mention just a few means—can be used to alter significantly the entire outcome and colouration of what is claimed on the back of it. Further, all this is done by using the same primary data inputs and, unsurprisingly, there are two factors that developers will never reveal to you if they can get away with it. One is the land value that they paid, coloured as it is by all sorts of associated costs before it gets as far as a planning consent; the second is their construction costs, which are entirely opaque.

Alongside all this and of much longer standing is what I describe as the commoditisation of residential property, which started in the 1990s. It has since financed ever more of the items society wishes to have, in terms of affordable housing, infrastructure, schools et cetera. But that policy has created a consistent and ever more bankable asset within an enhanced lending sector. This results in the very unfortunate situation of driving up house prices and creating a model that is less than satisfactory. Core to this is the issue raised by the noble Lord, Lord Stunell—transparency. Without it, none of this will be demonstrable to anybody, at any time.

Building Safety Bill

Debate between Earl of Lytton and Lord Young of Cookham

3rd reading
Monday 4th April 2022 Lords Chamber

[Lord Young of Cookham (Con)]

I thank my noble friend for his very kind words, and, in return, I commend him for the progress which he has made with the Bill, with his statement on 10 January, the amendments he tabled on 14 February and the further amendments he tabled last week on Report. I also commend him for his engagement with those who have sought to improve the Bill; he engaged with patience and humour despite, from time to time, considerable provocation from two former Chief Whips.

I will make two very brief points. First, I hope the amendments that were carried last week will not be overturned in the other place: amendments protecting those in buildings under 11 metres; amendments protecting leaseholders from making any contribution; and amendments that seek to protect the position of enfranchised leaseholders and put them on a par with unenfranchised leaseholders.

Secondly, there is still some unfinished business. We need to make progress on so-called orphaned buildings. I know my noble friend recognises the problem, which he believes, I think, can be dealt with administratively, and in an exchange on Report he pointed to the funds available, but it remains to be seen whether those funds will be sufficient and who will take on the responsibility of remediating these buildings given that the leaseholders —at the bottom of the waterfall—will not have the resources to do this, particularly if they are expected to litigate first.

I hope that, in the other place, some thought might be given to this and, in what is entirely a matter for the other place, I hope they recognise that they have never seen these clauses at all and therefore allow adequate time for consideration of Lords amendments.

[The Earl of Lytton (CB)]

My Lords, your Lordships will of course know that I have one principal abiding fear about this Bill, which is exactly the point that has been made by the noble Lord, Lord Young—who I regard, along with the noble Lord, Lord Blencathra, as my co-conspirator on this Bill.

To put a little more flesh on that bone, in a case where the original developer or builder cannot be identified or is identified but has gone bust, the question is about getting the remediation cost from these defunct individuals. Given that we have effectively removed the liability of leaseholders for remediation costs—and rightly so, in my view—what then happens when those freeholders and leaseholders are faced with no other option going forward? That is my abiding fear about the overwhelming financial odds that might face these occupiers.

Whether is it possible for the Minister to clarify that, I do not know. However, I add my voice to those of others who have expressed their appreciation for what the Minister has done: he has tackled this with a real sense of purpose, with an open-door policy to talking with those who have concerns, and I appreciate that very much. Behind him is the Bill team, to which I pay tribute as well.

I pay tribute to my co-conspirators, and also all those across the House, on all sides, who have supported me in Divisions—I appreciate that very much indeed. I particularly pay tribute to fellow Cross-Bench Peers, the noble Baronesses, Lady Finlay and Lady Grey-Thompson, and the noble Lord, Lord Best, who, on individual aspects, have campaigned tremendously effectively to have this Bill altered, very much for the better.

Beyond this House, I pay tribute to the efforts of organisations such as the Leasehold Knowledge Partnership, which has been very helpful in many respects. Most of all, I thank the perpetrator pays team, Steve Day and Daniel Greenberg; as far as I am concerned, their input has been absolutely fantastic and totally indispensable.

My last point has to be for all those who wrote to me: the couples who had put off having a family, or even getting married; the distraught pensioners; the families with their hopes and finances on hold, whose children have had their education disrupted and who have been unable to move because their properties were unsaleable for work or for any other purpose; and those facing bankruptcy and repossession. They have been my driving force. In all my years of experience as a chartered surveyor, I do not think I have had so many people write to me, and I hope that I have been able to give a voice to the voiceless in that respect and some glimmer of hope that, at the end of a really long dark period for them, there might be a little bit of light. I remain committed to the principles that I have held to throughout the course of the Bill.

Building Safety Bill

Debate between Earl of Lytton and Lord Young of Cookham

Committee stage
Monday 28th February 2022 Grand Committee

[Lord Young of Cookham (Con)]

My Lords, the instructions on the sheet of paper in front of me are not “crescendo” but “diminuendo”—some gentle accompaniment on the bass to the forte soprano that we heard from the noble Baroness, Lady Fox. But seriously, I want to add a brief footnote to the excellent speeches made by the noble Baroness, my noble friend and the right reverend Prelate.

I make the point that they all underline the need for the next stage of leasehold reform which the Government have promised, which does away with this feudal system of leasehold which exists nowhere else in the world. Once we have done that, all these problems that we have been talking about this afternoon will disappear: there will be an identity of interest between the freeholder and the leaseholder because they will be the same person. At some point, perhaps the Minister can shed some light on the next stage, confirming that that is indeed the Government’s objective and that they want to move in that direction as fast as possible.

I add a brief footnote to the excellent speech the right reverend Prelate made on Amendment 50A. In particular, I draw attention to the radical proposal in subsection (3)(a) of the new clause proposed in his amendment, which places an obligation on the landlord for

“where there is no recognised tenants’ association in existence before the coming into force of this section, creating a recognised tenants’ association and consulting with it about building safety”.

Because of the Long Title of the Bill, the right reverend Prelate had to confine it to building safety. However, it is a radical proposal. It places the obligation for establishing a tenants’ association not on the tenants, which is the position at the moment, but on the landlord, evening up the terms of trade. As I said, it is a very radical proposal indeed. An indifferent landlord does not want a residents’ association or a tenants’ association with whom he has a statutory obligation to consult, although I happen to believe that it is in his best interests to have such a dialogue. So the terms of trade are dramatically altered by the right reverend Prelate’s amendment.

In an earlier incarnation, I recall helping establish an organisation called Tpas—the Tenant Participation Advisory Service—I see the noble Lord, Lord Best, nodding sagely; he has a similar vintage to myself when it comes to housing legislation. That was focused primarily on tenants of social landlords, but I believe it has subsequently expanded into the private sector. It would be very well placed to advise landlords and tenants on how to set about establishing such an association, were the right reverend Prelate’s amendment to be accepted.

Finally, on this group of amendments, I reread chapter 4 of the Hackitt report last night, entitled “Residents’ voice”, and it has a whole series of recommendations about enfranchising the resident and the tenant in exactly the way that we have underlined. So, as I said at the beginning, I add a small a complement on the double bass to the excellent speeches that have been made on this group of amendments—or perhaps I am a tenor.

[The Earl of Lytton (CB)]

My Lords, I will try to be brief here. This is an extremely valuable group of amendments, and I entirely relate to the point made by the noble Baroness, Lady Fox, and the noble Lord, Lord Blencathra.

I will comment on something that the noble Lord, Lord Young of Cookham, said. He introduced the question of, if I paraphrase him right, the undesirability of the long-term continuation of conventional long leasehold, and I understand that. For some years I chaired the Leasehold Advisory Service when it was first set up, which was in response to a ministerial commitment that it should be put in place and that there should be advice to leaseholders.

--- Later in debate ---

[The Earl of Lytton (CB)]

I said commercial developers, but I meant to say “developers of commercial property”. However, I will leave that point for the next debate.

[Lord Young of Cookham (Con)]

My Lords, as the Committee enters its sixth hour of sitting, this is not the time for a comprehensive wind-up. However, I thank all those who have taken part in this debate.

My noble friend Lord Naseby made a valuable point about buy-to-let investors. Over the past 10 or 20 years, buy to let has become an alternative to a conventional pension for many people. I am grateful that my noble friend the Minister said that he is open to discussion on this; we count that as a win.

My noble friend Lord Blencathra had a series of amendments on the theme of protecting leaseholders. I am grateful for them.

My noble friend Lord Leigh of Hurley made a legitimate point about the freeholder who had not claimed the money he could have. I wrote down the solution that my noble friend the Minister arrived at. He said, “We will fix it at the political level.” The mind boggles as to what exactly that involves but I am sure that, with his robust physique and experience of government, he will come up with a satisfactory outcome on that.

The amendment in the name of the noble Baroness, Lady Pinnock, would remove the cap for leaseholders. I have a lot of sympathy with that. New paragraph 2(1), proposed by government Amendment 92, states:

“No service charge is payable under a qualifying lease in respect of a relevant measure relating to a relevant defect if a relevant landlord … is responsible for the relevant defect.”


That is fine, but then there is a whole series of exclusions, of which this is one. I find it difficult to reconcile the cap with the principle that the leaseholder is innocent and should not pay; I think we will have to come to back to that.

The noble Earl, Lord Lytton, made the same point as my noble friend Lord Leigh of Hurley: that the leaseholder should be able to apply. If the leaseholder could have applied in my noble friend’s case, there would not have been a problem and the freeholder would not have been in the loop, as it were.

I am grateful to my noble friend Lady Neville-Rolfe for supporting a number of the amendments. The noble Baroness, Lady Hayman, had her own, thoughtful approach to protecting leaseholders. She referred to the cascade. I hope that her many questions will be answered; perhaps we can all share in the letter that goes round. She also supported the request for an inquiry into compensation, for which I am grateful.

On the waterfall, the Government did not seem to appear in it. I thought that they were right at the end, but they have somehow been left out. I think that the Government are at the end of the waterfall if all else fails; my noble friend the Minister is indicating that this may not be the case, but what are the levy and fund for if not to help where the costs are not otherwise met by the freeholder, the leaseholder or the developer?

The noble Lord, Lord Stunell, asked how the cap was arrived at. It may well have been through a reverse process involving the Treasury.

Finally, my noble friend the Minister said that I thought he was a snake oil salesman. I believe that he believed what he said; my comment was about the pace at which he said it, which was like an advertisement where the terms and conditions are spelled out at an accelerated pace and one does not really have time to hear them. I think my noble friend said that enfranchised leaseholders are now within the scheme; I think he said that because I read his lips. I find that difficult to reconcile with what is in government Amendment 63:

“‘Relevant building’ does not include a self-contained building or self-contained part of a building … in relation to which the right to collective enfranchisement … has been exercised.”


If that should not be there, that is fine, but that is how I read it; I also made that point in an earlier contribution.