Leasehold and Freehold Reform Bill (Third sitting)

Eddie Hughes Excerpts

Committee stage
Thursday 18th January 2024 Public Bill Committees

[Mike Amesbury]

Q Would you welcome amendments to the Bill to try to capture that by regulation, by legislation?

Paul Broadhead: Yes. Anything that makes it clearer and gives lenders confidence and consumers confidence that their building is safe and they are not going to face an unexpected bill has to be welcome.

[Eddie Hughes (Walsall North) (Con)]

Q I am slightly confused. I thought it was now the case that properties did have to be advertised as leasehold or freehold. Has that changed?

Paul Broadhead: Well, often the advert will say that a property is leasehold but that that will be confirmed by the conveyancer, so you do not know 100% whether it is leasehold or what the terms of the lease are.

[Eddie Hughes]

Q So there is not an obligation currently for estate agents to market properties in a way identifying whether they are leasehold.

Paul Broadhead: Not to my knowledge, no. I do not think there is.

[Eddie Hughes]

Q Maybe I made a mistake. You said that it would take some time to unwind the fact that we have—currently—4 million leasehold properties in the country. Can you give us an idea of how long you think it will take, depending on the outcome of the Government’s recent consultation? Were they to move to peppercorn rates, how long would this take to unwind? And give us a flavour of what would be the complexities.

Paul Broadhead: In terms of the peppercorn rate, it is a really difficult question, because it is almost, “How long is a piece of string?”

[Eddie Hughes]

Q But you are a man who knows, so even if you just give us your thoughts, that will be helpful.

Paul Broadhead: I still think it would take decades to unwind everything to a peppercorn rate, because you need the group of leaseholders together to agree to enfranchise, which is quite difficult. I will give you one example we have come across, which was following the escalating ground rents. Housebuilders had written out to leaseholders and said, “We will convert your property to leasehold for free. We are going back on what we’ve done; we think we did the wrong thing.” The number of people coming forward and taking that up was negligible. You need to engage consumers. It is not just about putting the building blocks in place to make this better; it is enabling—

[Eddie Hughes]

Q Or to make it possible. Just because it is possible, does not mean it will actually happen.

Paul Broadhead: Absolutely, and you still need to engage the public and the legal profession that is taking people through, to make sure they understand what the benefits are and the cost of that. That individual value equation will change from leaseholder to leaseholder.

[Eddie Hughes]

That is very helpful, thank you.

[The Chair]

We have five minutes left. I will turn to Lee Rowley but please bear in mind that I want to bring in Barry as well.