Renters (Reform) Bill

Geoffrey Clifton-Brown Excerpts

Report stage
Wednesday 24th April 2024 Commons Chamber

[Sir Geoffrey Clifton-Brown (The Cotswolds) (Con)]

In rural areas such as mine where housing is already very expensive, more and more landlords are already deciding that letting their properties out is not worth the candle. They will therefore sell them, and the effect will be that there are fewer and fewer properties to rent. Those that are available will therefore go up and up in price and our youngsters will struggle to get on to the rental ladder.

[Anthony Mangnall]

I thank my hon. Friend for making that point. It is one that I will come on to, in terms of both the impact that the Bill will have on the attractiveness of short-term lets and the bureaucracy and hassle that will arise from this legislation.

From the outset of the Bill’s arrival in Parliament, I have worked to ensure that it strikes the right balance between tenant and landlord—a balance that ensures that the rights of tenants are respected and enshrined in legislation while the rights of landlords, property ownership and contract law are maintained and safeguarded. I believe that a failure to strike that balance would have a disastrous impact on the private rental market in the United Kingdom. Complicating the rental market with onerous requests, bureaucratic measures, additional costs and an inability for people to operate their personal property as they wish would only result in large swathes of the private rented sector throwing up their hands and selling their properties, just as a failure to support tenants would only embolden rogue landlords, diminish standards and increase unfair treatment.

From the start, it has been my mission to find a level playing field that ensures that tenants and landlords can co-operate together in a fair market that has a healthy supply of rental properties, with rights and standards enshrined, costs low and bureaucracy minimal, in a system that respects the rule of law and, perhaps most importantly, has a structure and a court system that is effective and that delivers. All of this has been done because we are in the midst of a supply crisis in the private rented sector, on which we have yet to touch.

On average, 25 prospective tenants inquire about every available rental property, up from eight in 2019, according to Rightmove. Hamptons estimates that between 2016 and the end of 2023, individual landlords sold almost 300,000 more homes than they bought. Last year, the Bank of England warned that demand for rental properties continued to outstrip supply as the number of landlords choosing to exit the market increased. It is therefore vital that responsible landlords have confidence that pragmatic changes are being made to the Bill. Failure to do so would only deepen the crisis.

I have said previously that the failure to have a sensible rental period at the start of a tenancy would likely result in the flourishing of long-term rental properties being used as short-term lets. Given the substantial price difference between short-term lets and long-term lets in constituencies like mine and the constituencies of the hon. Members for North Shropshire (Helen Morgan) and for Westmorland and Lonsdale (Tim Farron), there would be a very real likelihood of people exploiting that loophole.

Landlords incur costs and expenses when entering into a tenancy, and they need the certainty of a minimum period. Many buy-to-let mortgage lenders also require a minimum six-month tenancy agreement when lending to residential landlords. As a result, I tabled amendment 6 with the support of 58 colleagues to ensure that tenants cannot give two months’ notice to leave a property until they have resided in it for four months. I believe that this is in line with the recommendations of the Levelling Up, Housing and Communities Committee. I therefore welcome that the Government have accepted this argument and tabled new clause 15, which mirrors amendment 6. I will therefore not press my amendment.

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[Jacob Young]

Obviously, in a number of areas we have listened to the sector and moved on from the White Paper. The hon. Lady’s point is legitimate, but the reason the tribunal is able to set a rent that is above the landlord’s initial request, and to set a market rent, is that we want to ensure that it is not overburdened with repeat requests that challenge rent increases that are perfectly reasonable.

[Sir Geoffrey Clifton-Brown]

Surely the whole point of a tribunal is for the tribunal judge to set what he thinks is a fair market price. It might go up, it might go down or it might stay the same, but that is the whole point of a tribunal.

[Jacob Young]

I entirely agree with my hon. Friend, and that is why we have acted in this way.

We have heard from Members in all parts of the House, and I thank them all for their contributions during the Bill’s passage. They have worked collaboratively and diligently to ensure that this important legislation becomes law. I want to record my thanks to all my officials—I cannot name them all, but a few of them are Leah, Guy, Steph and Ross—as well as those in my private office team and the Clerks. I thank Members on both sides of the House, notably my hon. Friends the Members for Northampton South (Andrew Lewer) and for Totnes (Anthony Mangnall), for all their work, and of course I thank those in the Government Whips Office. Above all, I thank all the groups that I have had the pleasure of meeting as they represent the interests of both tenants and landlords across the wider sector.

I hope that our colleagues in the other place will take the collaborative approach that has been taken in this House, and will pass the Bill with the speed that it now deserves to give certainty and security to landlords and tenants throughout the country.

Renters (Reform) Bill

Geoffrey Clifton-Brown Excerpts

2nd reading
Monday 23rd October 2023 Commons Chamber

[Duncan Baker (North Norfolk) (Con)]

I must declare that I own half of a rental property with my wife and should therefore refer the House to my entry in the Register of Members’ Financial Interests.

I want to start by talking about one of my favourite subjects in this place. I have often spoken in the House about the impact of second homes in my constituency. While they bring many economic benefits, we must also face the fact that quite often they turbocharge the market, pushing up prices and making home ownership simply a dream for many local people. It is no big secret that North Norfolk has the highest proportion of second homes in the country outside London. In addition, one in five properties are private rentals. However, with an increasing number of holiday lets and second homes for many local people, the availability of secure, long-term rentals is diminishing year on year. That is particularly worrying in a constituency such as mine.

[Sir Geoffrey Clifton-Brown (The Cotswolds) (Con)]

I am very grateful to my hon. Friend, whose area I know well because—I declare an interest—I farm in his constituency. I also have rental properties. What he is saying is absolutely correct. The Bill will have a disastrous effect on areas such as his and mine, reducing the number of rental properties and therefore increasing the price of rent. For youngsters, that is really serious.

[Duncan Baker]

I thank my hon. Friend for intervening. I do not agree at all, actually. In constituencies like mine, people have a real problem with the security of rental property. If they are evicted, it is virtually impossible for them to find somewhere else to rent in a short space of time at the moment. I deal with queries about that all the time, but I will come on to that in just a moment.

It is worrying that for so many who are looking to settle down in a family home of their own, renting is becoming the only option due to rising house prices. For example, on Friday I bumped into a local estate agent in one of my biggest towns, North Walsham. He told me he has 25 applicants for every rental property that comes on to the market. The demand is just off the scale. Clearly, that is a really huge problem. There is simply not enough rental market security when demand is rising as it is.

Now, clearly I am a Conservative and I am not against people wanting to purchase property in Norfolk as a second home. If one works hard in life, one should have the choice to spend one’s finances as one wishes. But I also believe that when the market begins to fail, intervention is sometimes necessary and that is where we are at the moment. Many second homes, for instance, are left vacant for large parts of the year, reducing the property pool and once again reducing the availability of homes for residents to rent. Although holiday lets and vacant second homes are not the focus of my speech today, following conversations I have had with many of my constituents, especially Jane Platt, whom I met when she came all the way from North Norfolk to Parliament back in March, I know how unsettled and insecure tenants can feel in the sector as it currently stands. That fear is exacerbated in areas such as North Norfolk, because if a landlord decides to serve an eviction notice, given everything I have just said, there would simply be so little choice available for renters who need to find a new home quickly. Indeed, sadly, just in the four years I have been in this place, I have tried to help many desperate families find a suitable home to rent. That is at the pinnacle of why I support the Bill.

The Government are trying to help. Many initiatives have come forward; I was a Parliamentary Private Secretary in the Department for Levelling Up, Housing and Communities for a short period of time. Doubling council tax on second homes, planning changes for short-term rentals and now this Bill show that the Government are committed to fulfilling their manifesto commitment to introduce reforms that will provide families across the UK with that extra reassurance that they will be able to settle into a family home and be free from, in certain cases, unfair evictions and, in very limited circumstances, landlords who do not act in a correct way. Many landlords and tenants are good, honest and decent people; they are the norm. The private landlord is, in my view, the answer to the rental crisis we face, but only if they are incentivised properly, for example with tax reforms. I gently suggest that in some regards we could go further with some of the Government’s proposals to ensure that good and decent tenants feel secure in the private rental sector and feel they can put down roots. It might not be a big issue for some Members, but as others have said, enabling someone to have a pet in their home, as I allow, is certainly right in the 21st century when so many people treat a family pet as a part of their family.

There is large support across the board for the Government’s current proposals, and I am not suggesting that they are materially changed. However, I believe there are some valid conversations to be had around increasing notice periods from two to four months to give people time to find a new home. I have said it before, but in my constituency and in many others—for instance, in the south-west—I doubt anyone could find another rental property in two months, such is the enormous shortage. In addition, I would potentially improve the protected period at the start of the tenancy from six months to at least a year, as well as making all grounds discretionary rather than mandatory so that a court can take into account a tenant’s circumstances before granting possession. Above all—I have said this to various Ministers before—why can we not incentivise long-term landlords to return to the market by offering mortgage interest relief on long-term tenancies? In a constituency such as mine, so many people offer short-term rentals in their holiday cottages and on Airbnb, but if we could switch those people to offering long-term tenancies on their properties by giving them mortgage interest relief, it would fundamentally change the situation overnight and give more renters market security. It would seriously improve the amount of rental stock we have available.

I appreciate the need to safeguard landlords from antisocial tenants and to allow them to get their properties back when needed; we have heard that this evening. However, the tightening of some of the Government’s proposals would not cause an exodus of landlords from the sector or prevent them doing what they wish with their asset. As I said before, I own a part-share and I do not have any fear at all. When a landlord has a good relationship with their tenant, that is how it works—operating good relationships. Generally, people who are trying to rent are decent people. Creating a fairer, more secure and thriving rental sector is achievable, and this Bill is the first step.

Levelling-up and Regeneration Bill

Geoffrey Clifton-Brown Excerpts

2nd reading
Wednesday 8th June 2022 Commons Chamber

[Michael Gove]

I hear the important point about national parks, and the echo from my hon. Friend the Member for Isle of Wight (Bob Seely) with reference to areas of outstanding natural beauty. The environmental protections in the Bill should meet that need, but I look forward to working with my right hon. Friend and my hon. Friend in Committee to ensure that the protections are there.

[Sir Geoffrey Clifton-Brown (The Cotswolds) (Con)]

My right hon. Friend has referred to the national development management policies. There is great concern that they will override local planning authorities, which spend a great deal of time preparing their local plans that are then approved by Government inspectors. It would be quite wrong if national Government overrode them, and it would destroy the careful balance that has existed since the Town and Country Planning Act 1947, in which planning was devolved to local authorities.

[Michael Gove]

My hon. Friend gives me the opportunity to reassert that the NDMPs will not override local plans. Local plans have primacy—that is perfectly clear in this legislation. As a result of strengthening the plan- making system, we will make sure that we deal with the issues and questions that have led particular communities to resist development in the past.

I mentioned the importance of beauty. Specifically, for example, we will strengthen the role of design codes in local plans. Through our new office for place, which is a successor in some respects to the Commission for Architecture and the Built Environment but even better in its drive, we will be in a position to ensure that beauty is at the heart of all new developments. In particular, I pay tribute to my predecessors in this role, my right hon. Friend the Member for Newark (Robert Jenrick) and the late James Brokenshire, who worked to ensure that beauty, quality and higher aesthetic standards were at the heart of new architectural developments and did so much to reset the debate away from where it has been in the past and towards a brighter future.

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[Sir Geoffrey Clifton-Brown (The Cotswolds) (Con)]

I am grateful to have caught your eye in this very important debate, Madam Deputy Speaker, but I am not so grateful to have to follow the speech of the hon. Member for Wigan (Lisa Nandy). I cannot believe that in a speech that lasted more than half an hour, she could not find something to welcome in the Bill, which will help to level up some of our poorest communities in this country. I can only conclude that she and I have been reading different Bills.

I declare my registered interest as a Fellow of the Royal Institution of Chartered Surveyors; I have practised professionally in planning matters. I welcome the fact that earlier zonal planning proposals were dropped, and I welcome the abolition of the five-year land supply. It is right to try to speed up the planning process by better using data and digitalisation. Where better to start than by streaming and accelerating the local planning process, and concurrently introducing neighbourhood development orders in clause 89 to make the neighbourhood plan process easier? That is important, because those plans are where most people become involved in the planning process. They are a truly democratic part of that process.

Unfortunately, the democratic theme applies with a vengeance to the national development management policies set out in clauses 83 and 84, which I referred to in an intervention on the Secretary of State. It is very important that we think carefully about them, because they set a dangerous precedent that begins to nationalise planning policy and upsets the delicate balance between national and local policy that has existed since the Town and Country Planning Act 1947, which largely decentralised planning.

[Munira Wilson]

Will the hon. Gentleman give way?

[Sir Geoffrey Clifton-Brown]

I will not, because I have only four minutes.

Given the enabling power in the Bill to implement NDMPs, and the enormous centralising power, what will they contain and what will be the consultation process to create and amend them? That is a key question, and I hope that the Minister for Housing will provide some answers when he sums up.

I was heavily involved in the Public Accounts Committee’s inquiry into local government finance; indeed, I secured an Adjournment debate on the subject on 27 April—it is printed at column 845 of the Official Report—to urge the Government to stop local authorities such as Cotswold District Council, which wants to borrow £76.5 million on an annual core spending budget of just £11.2 million. The Liberal Democrats running that council are financially illiterate.

I welcome the implementation of the Letwin review to speed up development with the introduction of a development commencement notice that sets out the annual rate of housing delivery within large developments and the consequent completion notice. I also welcome the new infrastructure levy in clause 113, to be set in conjunction with the retained section 106 powers. In the Cotswolds, agricultural land is worth between £10,000 and £15,000 per acre; with planning permission, that could increase to half a million pounds or more. With good tax advice, only 10% is paid on the gain.

If the infrastructure levy is properly implemented, it could provide substantial infrastructure. It could end the endless argument about delays and viability, because the developer would know before purchasing the site what they would be expected to provide. The construct of charging on the gross development value—I urge the Minister to listen to this—is interesting, but will deter any aspect of environmental design improvement unless it is statutorily required. A better construct might be to capture the increase in land value, which I have demonstrated is there.

Finally, the increase in planning and enforcement fees is welcome. Most planning departments are poorly funded; they should be properly funded to determine applications rapidly and should employ good and well-qualified planners. Thank you for allowing me to speak in this debate, Madam Deputy Speaker.

[Madam Deputy Speaker (Dame Eleanor Laing)]

I call the SNP spokesman, Patricia Gibson.

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[Stuart Andrew]

I am keen to ensure that we get it right. Of course I will consider it, because I want to ensure that we consider all aspects. There could, however, be unintended consequences in other parts of the country. We will want to ensure that we get it right, but I will look at all options. I have made that commitment to numerous colleagues who have raised the issue with me.

I turn to infrastructure. I want to mention in particular my hon. Friend the Member for South West Bedfordshire (Andrew Selous) , who seems to secure a Westminster Hall debate on this issue every other week. I congratulate him on that. Many have asked what the Bill means for our infrastructure: our roads, bridges, schools, GP surgeries and so on. This is where I believe communities stand to really benefit from our reforms. All of us know that, without new infrastructure, when people see new homes going up in their community, too often they fear the worst. They fear that it will result in more congested roads, busier trains and fewer services to go around.

I hope that the proposals that we have set out in the Bill will go a long way towards allaying those fears for good. I am determined to continue working with hon. Members on both sides of the House to do so. That starts with sweeping away the old, opaque section 106 agreements and replacing them with one simple infrastructure levy that is set and raised by local authorities. The new levy will be fairer, simpler and more transparent, and it will be imposed on the final value of a development. It is important to stress that, with the housing market as buoyant as it is, the levy will easily be able to respond to market conditions. Put simply, when prices go up, so will the levy.

Crucially, our Bill also requires councils to prepare an infrastructure delivery strategy, setting out how and when the levy receipts will be used. That means new development will always bring with it the new schools, nurseries and GP surgeries that communities want and need. I have listened, in particular to the debates secured by my hon. Friend the Member for South West Bedfordshire. He knows that I will be meeting my colleagues in the Department of Health and Social Care next week to see what more we can do to ensure that local health services are more involved with the planning process.

We will run a test and learn approach. We are holding a series of roundtables with stakeholders because we want to get it right. It is important to remember that councils can borrow against the levy, so they can bring the infrastructure in as soon as the development is happening.

[Sir Geoffrey Clifton-Brown]

I am grateful to the Minister for giving way. He will have heard what I said in my speech about the gross added value method of charging for the infrastructure levy, which will act as a disincentive to developers to put added value on environmental and design matters. Will he please discuss that matter with me to see whether we can use a better method by capturing the increase in land value?

[Stuart Andrew]

I certainly make that commitment. My hon. Friend raised that point with me earlier this afternoon. There are some points there that I want to further explore, so I will ensure I meet him in the next week or so.

Building Safety

Geoffrey Clifton-Brown Excerpts

Monday 10th January 2022 Commons Chamber

[Michael Gove]

I absolutely take the hon. Gentleman’s point, but I think that the legislation we are bringing forward helps to address some of the regulatory failures to which he alludes. I also think it is important to wait for the conclusions of the Grenfell inquiry before apportioning appropriate weight on the responsibility that rests on central Government, the responsibility that rests on local government, and the responsibility that rests on others. I believe the proposals that we have put forward today are the best and most expeditious way of ensuring that we can provide support to leaseholders, but of course we will keep that under review.

[Sir Geoffrey Clifton-Brown (The Cotswolds) (Con)]

I draw the House’s attention to my entry in the Register of Members’ Financial Interests as a chartered surveyor.

I warmly welcome today’s announcement. May I ask my right hon. Friend about two aspects that he has mentioned in the statement—namely that the indemnity given to building assessors and the proper auditing assessment should enable lenders and insurers to offer those products at reasonable rates fairly quickly? That, in turn, will get the market moving, so that those leaseholders who desperately need to move should soon find that there will be a market for them to do so.

[Michael Gove]

My hon. Friend is absolutely right. That is exactly our intention, and it is the fruit of the work read by my hon. Friend and others.

Building Safety

Geoffrey Clifton-Brown Excerpts

Wednesday 10th February 2021 Commons Chamber

[Robert Jenrick]

The hon. Gentleman, for whom I have great respect, misunderstands the scheme that we have just announced. For buildings of between four and six storeys, where the risk is much lower, leaseholders will have the opportunity, if they wish—there will be no compulsion—to take advantage of the financing scheme. That loan scheme financing arrangement will sit with the building, not with the individual. It will not affect the individual’s personal credit rating, and it should not have a material impact on the value of their property. It will be akin to paying somewhat more on their service charge every month. As I say, it will be capped at £50 a month, which is similar to the average service charge. Of course, in many buildings the service charge is already far in excess of that.

[Sir Geoffrey Clifton-Brown (The Cotswolds) (Con) [V]]

In drawing the House’s attention to my entry in the Register of Members’ Financial Interests, may I say to my right hon. Friend that I think this is one of the most generous and innovative schemes anywhere? In buildings to which the finance loan scheme is applicable, will it apply to non-cladding costs that nevertheless contain a material health and safety element—for example, fire doors and asbestos?

[Robert Jenrick]

We have chosen to focus both the grant scheme and the financing arrangements on cladding. That is for good reason, because the expert advice that we have received from the independent panel has consistently been that cladding is the greatest danger that needs to be combated. There may be other defects in buildings, and they will vary widely from building to building. They will have to be a matter for the building owner and for the homeowner. We, as a Government, are going to tackle the big issue here, which is cladding. We are going to end the cladding scandal that began with the Grenfell Tower tragedy.

The Future of the High Street

Geoffrey Clifton-Brown Excerpts

Thursday 10th December 2020 Commons Chamber

[Richard Thomson]

I absolutely welcome anything that ensures a better balance of taxation, and that example shows the importance of co-operating internationally. Much time has been taken up in this House pursuing a theoretical sovereignty, but we may be about to find some of the limits of the practical sovereignty we can get. However, certainly I am all in favour of making people pay what they can in taxation and doing so on a collaborative international basis.

That brings me neatly on to my next point, which is about tax-free shopping. The Government have announced their intention to withdraw tax-free shopping. That will have a deleterious impact on our airports, particularly our regional airports, and also have a massive impact on tourism. Much of the tourism traffic that comes into all parts of the UK is led, at least in part, by the opportunities for tax-free shopping.

[Sir Geoffrey Clifton-Brown (The Cotswolds) (Con)]

The hon. Gentleman is making a very important point, which I intend to follow up in my speech. Does he agree that the withdrawal of the VAT rebate will affect all parts of the United Kingdom, particularly in Scotland, including firms such as Johnstons of Elgin, where manufacturing and retailing will be affected?

[Richard Thomson]

I absolutely agree with the hon. Gentleman, and I look forward to hearing that aspect of his speech. I believe the change could affect anything up to about 33% of sales for the company he mentions, but overall, as well as imperilling the opportunity to develop routes from regional airports, a total of about 40,000 jobs and over £1 billion of investment could be at risk. It is little wonder that the French financial newspaper Les Echos has argued that the UK is in danger of shooting itself in the foot here.

Earlier I talked about business rates, and wholesalers have also been missed out. They are absolutely critical to the supply chain for many of our smaller communities. They have been given some direct support from the Scottish Government, but have missed out on support from the UK Government. I encourage the UK Government to look at including wholesalers in the support available to that part of the sector.

In conclusion, high streets in communities of all sizes face challenges on a number of fronts. We have heard some from the speakers so far; no doubt we will hear new aspects as the debate continues. But with the right Government support, at local government and national Government levels, our town centres have the opportunity to thrive as places where we work, rest and play, and effect the necessary transitions in how land and buildings are used. In Scotland, we would obviously rather the Scottish Government were able to do all that is necessary in that regard, rather than just some. Following some of our earlier debates, it would be far better if, instead of grabbing powers from Holyrood through the United Kingdom Internal Market Bill, the UK Government were instead transferring powers to the Scottish Government, particularly financial powers and borrowing powers, so that they can get on with doing all that is necessary, instead of having to wait for it to happen elsewhere.

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[Sir Geoffrey Clifton-Brown (The Cotswolds) (Con)]

I wish to devote the bulk of my speech to dealing with the decision by the Treasury to withdraw duty-free shopping in this country and VAT rebates, the so-called VAT RES, or, as some in the popular press have dubbed it, the “tourist tax”. I fully support the Chairman of the Treasury Committee’s call for a comprehensive reassessment of the matter. Indeed, in its hearing on 1 December, the OBR said it had given the policy its highest possible uncertainty rating.

The OBR also said it had no confidence in the Treasury numbers, that HMRC had no data of its own on the cost of VAT RES, that HMRC was wrong to assume that introducing a 20% tax would have no impact on visitor behaviour and that the OBR had assumed a price inelasticity of 1.9. Finally, the OBR said that there had been no consideration of the knock-on impact on associated sectors such as hotels, and no taking into account of any falls in VAT from fewer and shorter trips from wealthy visitors to this country. We must be crazy to want to deter wealthy overseas visitors from coming here to stay in our hostelries and from spending a lot in our shops.

There is a common perception that this measure only affects Oxford Street and Bond Street; in fact, as I said to the hon. Member for Gordon (Richard Thomson), it affects the entire United Kingdom. It will affect companies such as Mulberry, Burberry, Church’s, Johnstons of Elgin in his constituency and, in fact, the whisky industry in Scotland. That is losing jobs. It is estimated, as he said, that up to 40,000 jobs across the UK could be lost by this decision, which will affect regional airports, manufacturing in Blyth, Yorkshire and Somerset and high-value shopping areas such as Edinburgh, Dundee, London, Manchester and Leeds.

I call on the Treasury to think very hard about this decision. Even if the hon. Member for Gordon and I are wrong, and the decision does not cost 40,000 jobs, it may still cost half that—20,000 jobs. The Red Book states that the decision may cost half a billion pounds—the industry does not think it will—but that is chickenfeed compared with the loss of those jobs.

In the second part of my speech, I will speak to my constituency. In Cirencester, the biggest town in my constituency, 41 shops have closed or are about to close. In all my small town centres, half a dozen shops are going to close because of covid—that is about 60 shops, at least. As I did in a question in the House last week, I call upon the Minister and all tiers of central and local government to come together to have a massive exodus on to our streets when it is covid safe to do so. That can be done through a range of measures. The Minister was right. We are pleased that the Government have put so much money into our high streets through the towns fund, but we also want other measures such as car parking, broadband and rates reform.

Arcadia and Debenhams: Business Support and Job Retention

Geoffrey Clifton-Brown Excerpts

Wednesday 2nd December 2020 Commons Chamber

[Paul Scully]

Indeed, high streets will certainly change, but we need to get the balance right between online and bricks and mortar as well, because both have a really important position to play in our retail offering.

[Sir Geoffrey Clifton-Brown (The Cotswolds) (Con)]

In just three towns in my constituency, 27 shops have either closed or are about to close because of the pandemic. Will my hon. Friend commit today to use the Government’s very generous package of measures to retail businesses at all levels of Government—from central Government to local government to local enterprise partnerships—to follow the Prime Minister’s lead to encourage a massive return to the high streets now that we are allowed to do so under the guidance?

[Paul Scully]

It is really important that, as we extend hours for retailers to be able to open up for Christmas, we rip up and peel back on our bureaucracy as well. We must also encourage local authorities to do more such as offering free parking and other such things.

Planning and House Building

Geoffrey Clifton-Brown Excerpts

Thursday 8th October 2020 Commons Chamber

[Sir Geoffrey Clifton-Brown (The Cotswolds) (Con)]

I am grateful for the opportunity to speak in the debate. I hope the Minister for Housing, my right hon. Friend the Member for Tamworth (Christopher Pincher), who I thank for listening to my concerns, will forgive me if I do not praise the good bits in his White Paper because I do not have time to do so.

As my right hon. Friend the Member for Ashford (Damian Green) said, the real flaw in the White Paper is that all it does is concentrate building in the south-east and central south of England, and does not use the Prime Minister’s wish to build more infrastructure to level up the rest of the country. It is really important that a planning system is led by a well-executed local plan. National designations under the National Parks and Access to the Countryside Act 1949, such as national parks, areas of outstanding natural beauty and green belt, must be respected. I understand the Government’s desire to increase housing numbers. A formula or algorithm, if correctly designed, will always achieve that. However, it is a very blunt instrument that does not take into account any local variations.

There is a particular concern about the proposals, which deal with housing needs and requirements, between the housing numbers in the planning White Paper and the algorithm in the change in the planning system consultation. The Cotswolds is 80% AONB and the current local plan requirement is 420 houses. The proposed standard method would deliver a staggering 1,209—a 188% increase. If every area had a 188% increase, the Government would hugely overrun their targets. The current formula will certainly increase the numbers, but will not necessarily improve affordability. It is fundamentally wrong to automatically assume that affordability will be solved in areas of housing demand. It is the housing mix, not housing numbers, that is really important. In my area, what we need are small one and two-bedroom flats to meet the aspirations of first-time buyers, the young and the old. As was so ably said by my hon. Friend the Member for Harborough (Neil O’Brien), if we stripped out those people who live in the Cotswolds but who do not actually work in the Cotswolds, both housing prices and average salaries would come down immeasurably and we would be nearer the average on affordability.

The current proposals need to be looked at seriously. The present proposals would so radically alter a very special area like the Cotswolds, which the planning system to date has so successfully protected, that future generations and visitors alike would not be able to visit the area and see why it is so special.

Leasehold Reform

Geoffrey Clifton-Brown Excerpts

Thursday 11th July 2019 Commons Chamber

[Sir Geoffrey Clifton-Brown (The Cotswolds) (Con)]

Thank you for allowing me to catch your eye, Mr Speaker. I am really pleased to follow the hon. Member for Sheffield South East (Mr Betts). As Chairman of the Select Committee, he is one of the most knowledgeable people in this House, and I pay tribute to him for the excellent work that his Committee has done in this field. I am one of the few chartered surveyors in the House, and I draw hon. Members’ attention to my entry in the Register of Members’ Financial Interests. I have managed properties of all sorts for more than 40 years and I therefore have a degree of knowledge in this area.

The basic property law in this country dates back to the time of William the Conqueror, and in particular to 1086, when the Domesday property book listed every property in England. The law has progressed since then. In particular, the law on leasehold arose because landowners wanted to come to an agreement with one or more persons to occupy their land for a variety of functions. Sometimes it was to farm it, sometimes it was to build buildings and sometimes it was to run a business, and the leasehold law arose. It has been amended many times since then, as the hon. Gentleman has said.

In recent years, there have been a number of scams in my constituency relating to the leasehold law and, in particular, to the freehold law, and I want to go into one or two of those. As the hon. Gentleman said, the two areas in which these leasehold scams arise are ground rents and service charges. The ground rents in older leases tended to be a fairly small proportion of the total cost, but in recent years modern developers have hiked the ground rents, often doubling them every 10 years. The so-called proposals to modify this with reference to the retail prices index could lead to an even greater scam, because if inflation started to rise, ground rents could double not every 10 years but every five years. We need to look very carefully at that proposal. There are other proposals to make ground rents more moderate.

The other area, which is perhaps a bigger concern, is that of service charges. They can often be completely unknown, and they can include elements that are not immediately apparent to the person buying a leasehold. Those elements include administration fees, accountancy fees, commissions, insurance—the list goes on forever. The problem with all that is that a purchaser’s solicitors often assume that their client has a greater knowledge than they really have and are not explicit about what the obligations amount to.

I will move on quickly, because time is running out. I have constituents in the Gallery who have had equal and similar problems with scams relating to freeholds. Freeholders buy their properties with a covenant—many covenants in some cases—that contain unquantified and unspecified obligations relating particularly to the common parts of their estate. When pressed, the smart salespeople in the smart furnished flat or house on the estate often say, “Well, it’s only a small amount. It will amount to a few hundred pounds.” However, when the buyer gets their first bill, they suddenly realise what they are locked into. In some cases, the charges are so high, as they can be with leaseholds, that the properties are effectively made unsaleable.

We need to look carefully at the purchasing system in this country, and the Government need to work with the Law Society to ensure that all solicitors make it explicitly clear to their prospective purchasing clients what they are letting themselves in for. In my experience—I do not wish to knock either my own profession or the legal profession—they tend to be fairly blasé about inquiring into what the arrangements are for managing these common parts, which can be very expensive. The Government need to examine the arrangements to make it much easier for groups of people representing their estate to take over its management. What actually happens is that the management tends to be vested in a company that is owned by the estate’s original developer, and then people who cannot get out of dealing with that company are locked into whatever said company chooses to charge them.

I pay great tribute to Amanda Davies from Burton Chase and Mike South in Victory Fields for bringing some of these anomalies to me. Like the hon. Member for Sheffield South East, I have written to the Competition and Markets Authority with a draft of how my constituents think the current system is being mis-sold. I hope that the CMA will take close notice of that.

--- Later in debate ---

[Liz McInnes (Heywood and Middleton) (Lab)]

I am grateful for the opportunity to take part in this important debate and I thank my hon. Friend the Member for Sheffield South East (Mr Betts) for his excellent speech and for all the work done by the Select Committee.

I took part in a similar debate in December 2017, just after the Government had announced for the first time an end to leaseholds for new-build houses, but there is a still a huge amount of work to be done to help those caught in the leasehold trap, like many of my constituents. I first became aware of the issue in 2016, when I was contacted by a constituent, Linda Barnes. She told me that her house, which she had bought from Taylor Wimpey in 2011 for £147,000, had a ground rent that doubled every 10 years and that had been sold on by Taylor Wimpey to E&J Estates. Linda had been quoted a price of £35,000 to buy the lease before it doubled—that is a quarter of the value of her house.

I heard from another constituent, Jonathan, who bought a house from Countryside Properties using the Government’s Help to Buy scheme. Jonathan said that he had been made aware that the development was to be leasehold and that an annual ground rent of £200 was payable to Countryside Properties. Six months after he moved in, Jonathan received a letter informing him that the freehold had been sold on to a company called Tuscola Ltd, based in the British Virgin Islands. He was quoted a price of more than £6,000 for the freehold. He also discovered a doubling clause in his lease which meant that by 2055, the ground rent would be £1,600 a year. That is naturally causing him a great deal of concern, because by the time he reaches retirement age, his ground rent will be unaffordable and will make his home unsellable. As Jonathan said,

“Considering the significant cost of new homes one would have thought that the last thing one should worry about is the land the house sits on and that it can seemingly be sold on from underneath you.”

I have been contacted by many of Linda’s and Jonathan’s neighbours, and they all tell the same story: that they were encouraged to use the developer’s choice of solicitor when they bought their homes, that they were not informed of the doubling clause, and that the prices that they are being quoted for the purchase of the freehold are simply unaffordable.

Many residents are rightly angry that the developer sold off the freehold to a property investment company without first consulting the homeowners and offering them the first chance of purchase. Many pointed out that the leases on their homes are for 250 years; if the ground rent doubles every 15 years, it will be £13 million by the end of the lease. If the Government do just one thing, they must ban this exponential growth in ground rents. I heard from Lee, who told me:

“We are unable to sell our house…as the true nature of this mis-selling has now been revealed. We have a 10 year doubling ground rent on our house that is now known to be toxic. The only option currently offered by Taylor Wimpey is to convert us to an RPl lease and somehow this is supposed to remedy their wrongs.”

William, who contacted me, has also been offered an RPI ground rent. He took advice from a barrister who said that although it was not a good deal, it was better than a doubling ground rent. He advised William to accept the RPI deal and take out a professional negligence claim against the solicitors, who had been recommended by Taylor Wimpey. So my constituent is now embroiled in a professional negligence claim and an unsatisfactory ground rent deal, when all he wanted and aspired to was a home of his own. He points out that he is paying, in addition to his mortgage, estate management fees, service charges and ground rent in what was supposed to be an affordable home—but it is not all about money. William said:

“This is causing so much mental stress and is affecting the quality of my life with worry.”

[Sir Geoffrey Clifton-Brown]

One of the worst scandals of all has not yet come out in this debate. When people buy their houses, part of the contract states that they must obtain a compliance certificate before they will be allowed to sell them. If they are in arrears with any of the charges that the landlord has imposed on them, if they are in dispute or if they have not paid the interest, they will not be able to obtain the certificate, and they will not be able to sell their houses.

[Liz McInnes]

The hon. Gentleman speaks from a position of knowledge, and I am grateful to him for introducing an issue that does not feature in my speech.

I have been contacted by many other constituents with very similar stories. Sarah said:

“The Leasehold itself makes me feel like the property isn’t ours, having to pay fees for the most simple changes to your house, like painting the door and changing its colour…The leasehold is simply a joke and should never be allowed in law to happen to New Homeowners…or anyone.”

The north-west has one of the highest percentages of leasehold new-build homes, so sadly it comes as no surprise that so many of my constituents are struggling. We in the Labour party have said that we will abolish ground rents for new leases, will cap ground rents for existing leases at 0.1% of the property value up to a maximum of £250, and will introduce a simple formula for leaseholders to buy their freehold or commonhold, capped at 1% of the property value. We will crack down on unfair fees and contract terms, and will introduce new rights for residents to take over the management of their homes themselves.

Will the current Government do the same, and end the misery of the leasehold trap? Will they also launch an inquiry into how this was allowed to happen, similar to their inquiry into the mis-selling of payment protection insurance?

--- Later in debate ---

[Mrs Wheeler]

Thank you, Mr Speaker. Time is rocking on, so I will rush. We have been talking today about a situation where the ground rent is so high that it becomes an assured shorthold tenancy and so people can be evicted. The Government have committed to changing legislation to close that loophole, so that a leaseholder cannot be evicted on that basis. I am glad to answer that one.

We will not stop there. As our recent publications show, these reforms are only one part of the plans we have for the leasehold sector. This is why we were able to accept, in full or in part, most of the recommendations made by the Select Committee. Let us consider the work Lord Best is doing on the regulation of property agents. His working group is looking at a number of things, including having an independent regulator with a legally enforceable code of practice, which will require all property agents to register; and nationally recognised qualifications for property agents to practise.

We have also asked Lord Best’s group to look at the transparency of service charges, as well as the use of administration and permission fees, and consider in what circumstances they are justified and whether they should be capped or banned altogether. This work will allow us to raise standards of property management and give leaseholders the confidence that they are being charged fairly—both things that were called for by the Select Committee. We look forward to receiving Lord Best’s report, which will also be published for all to see very shortly.

On charges, it is unacceptable that some residential freeholders are unable to challenge excessive fees for the maintenance of their estates. I am happy to confirm that under the new legislation, freeholders will be given the right to challenge the reasonableness of such fees. They will also be able to apply to tribunal for the appointment of a new manager. This will help to increase the transparency, accountability and reasonableness of fees, which is something else the Select Committee wanted to see.

I understand that many existing leaseholders want the Government to legislate to amend onerous ground rent terms. As I pointed out previously, the inclusion of legislation to amend existing contracts presents problematic human rights implications, as has been made clear in the information put out recently by the Law Commission. Despite that, I firmly believe that doubling ground rents are unacceptable and should be varied, which is why we are encouraging the sector voluntarily to vary leases and show that it is willing to solve the problems of its own creation. I have been encouraged by the response we have received. More than 60 leading developers, freeholders and managing agents have signed a public pledge that will free leaseholders from the shackles of doubling ground rents.

[Sir Geoffrey Clifton-Brown]

Will my hon. Friend give way?

[Mrs Wheeler]

I really do not have time. Unfortunately, there is other business that needs to be done tonight.

I am aware that many leaseholders believe they were mis-sold their properties. Many people write to me to say that the leasehold tenure was not properly explained and that onerous terms were not made it clear to them. Others were promised that they would be able to buy the freehold for a certain price after two years, only to find that had been sold on buy an investor in that time. I am delighted that we have a commitment of action from the Competition and Markets Authority, which will look into the issue. It will use its consumer protection powers to determine whether leasehold terms, including onerous ground rents and permission fees, can be classed as unfair. If the evidence warrants it, the CMA will consider bringing forward enforcement proceedings. I look forward to hearing about the CMA’s progress and hope that its work complements the reforms we already have in train.

The issues I have just outlined show us that better information and advice is needed for potential and existing leaseholders, which is why we recently updated our “How to lease” guide, which now gives clear information on what leasehold tenure is, the costs associated with being a leaseholder and the rights and responsibilities that leaseholders have. This will give people a better understanding of what it means to be a leaseholder. If things go wrong, though, I want them to receive quality, free and independent advice, if they want it. I am pleased that many campaign groups have played an active role in this subject area, supporting leaseholders who have found themselves in difficult circumstances.

I specifically thank my hon. Friend the Member for Worthing West (Sir Peter Bottomley) and the hon. Member for Poplar and Limehouse (Jim Fitzpatrick) for their work as co-chairs of the all-party group on leasehold and commonhold reform, and I am grateful for their comments. We value the work of the Leasehold Knowledge Partnership and how it works with the Department. I am clear that LEASE is absolutely on the side of leaseholders. Its advice has helped many leaseholders to understand what is in their lease.

We have heard a lot today about the work of the Law Commission. The House should be confident that the Government are committed to improving the leasehold sector. Although leasehold as a tenure will continue to be used for flats, we have committed to reinvigorate commonhold, as mentioned by my hon. Friend the Member for Harrow East (Bob Blackman). The Government support the wider use of commonhold, which allows homeowners collectively to own and manage the common parts of a residential building.

Although commonhold works well in other countries, there are currently fewer than 20 commonhold developments in Wales. That is because of deficiencies in our legislation; it is clear that reform is needed. For that reason, the Government are working with the Law Commission to make the legal changes needed to see more commonhold developments emerge. The Law Commission is currently analysing the responses to a consultation on that very subject, and I look forward to receiving its report. We continue to work with the Law Commission and to fund it, and we look forward to its conclusions.

As the House can see, we are pushing ahead with our plans to improve the system for leaseholders today and tomorrow. We will create a market that really works for consumers—one that is fair, simple and transparent. We are taking action now to ban the sale of leasehold houses through Help to Buy programmes. Homes England will negotiate contracts with all Help to Buy developers to rule out explicitly the building and selling of leasehold houses, except in the very limited circumstances when it is justified. On 2 July 2018, the Secretary of State announced that no new Government funding schemes would be used to support the unjustified use of leasehold for new houses, and that includes the new Help to Buy scheme from 2021. That announcement alone has brought down sales from 11% to 2%.

The hon. Member for Newcastle upon Tyne Central (Chi Onwurah) talked about her issues with the St Mary Magdalene and Holy Jesus Trust. I am very sorry that, obviously, my letter to her had not arrived by the time that she had written her speech. I have written to her in the past three days, so I am very sorry that she has not got it. It does clarify the position.

The Chairman of the Select Committee needs a couple of minutes in which to speak, so I will conclude. We will create a market that really works for consumers: one that is fair, simple and transparent. In that spirit, I thank hon. Members for their speeches and questions today. I thank my brilliant civil servants for all their hard work. I thank LEASE and all the committed people involved in this area, and I look forward to driving ahead with our programme of leasehold reform.

Ministry of Housing, Communities and Local Government

Geoffrey Clifton-Brown Excerpts

1st reading: House of Commons
Tuesday 2nd July 2019 Commons Chamber

[Sir Geoffrey Clifton-Brown (The Cotswolds) (Con)]

I am grateful for the opportunity to catch your eye in this debate, Madam Deputy Speaker.

I pay tribute to the hon. Member for Oxford West and Abingdon (Layla Moran), who is a highly valued member of the Public Accounts Committee, of which I have the honour to be deputy Chair. It is clear from her speech that she is extremely knowledgeable about this area, particularly about education, on which she is the Liberal Democrat spokesman.

I also pay tribute to other Members who have helped to secure this really important debate. The reason it is so important is that local authorities are by far the largest devolved form of government in England. They deliver a range of vital services, such as education, planning and social services. The money devoted to local government, and therefore to the effectiveness of these services, is vital to the people of this country, which is why, for the first time in 27 years in this place, I wanted to speak in an estimates debate, but particularly in this one on the Ministry of Housing, Communities and Local Government.

It is a disaster for the people covered by a local authority area when it runs out of money and centrally appointed commissioners are brought in to oversee the finances, as we have seen in Northamptonshire County Council. We need to look very carefully at the role of section 15 officers, who have issued more than 114 notices of loss of financial control since 2010-11. We particularly need to encourage the Government to be intrusive in their inspection of local audits, because it is possible to spot when a local authority is beginning to get into trouble far sooner than was the case with Northamptonshire, thereby possibly avoiding bringing in the local commissioners.

As the hon. Member for Oxford West and Abingdon said, the finances of local government are fairly parlous at the moment—resources fell by 34% in real terms between 2010-11 and 2017-18. Paragraph 12 on page 9 of the National Audit Office report states tellingly that overspending and the use of resources were not fully financially sustainable over the medium term. I encourage my colleagues on the Front Bench to look very carefully at this whole matter.

Local government is now facing a funding gap of £3.1 billion by 2019-20, which is estimated to rise to a staggering £8 billion by 2024-25, according to the NAO. Local government spending is being stretched significantly as we face the demand for services way outstretching available funding. This year, for example, Gloucestershire County Council has had to raise its council tax in every district to make £21 million of savings to deal with the financial pressure. To simply keep up with the county’s demand for services, council tax payers now need to provide nearly £295 million.

Children’s social services are a particular worry in the county and across many education authorities. It is the No. 1 financial pressure on Gloucestershire’s 2019-20 budget, as the authority will spend an additional £16.3 million on the most vulnerable children and young people in the county. Ofsted made a monitoring visit to Gloucestershire’s children’s social services in April—its sixth monitoring visit since our local authority was judged to be inadequate in March 2017. It is promising to see that progress has been made. However, that progress was deemed to be slow, and we cannot continue to fail to provide good enough social services for our most vulnerable children and young people.

Throughout the country, 42% of children’s social services are rated good and we spend some £8.8 billion on them, but 91% of local authorities have overspent in this area and we need to understand why. We had the education debate yesterday, and although there is a record amount of money in education overall—rising from £41 billion in 2017-18 to £43.5 billion in 2019-2020—the problem is with distribution. That is the case for my local authority, and I suspect that some of my colleagues on both sides of the House who are in the f40 group would agree that the distribution of money is critical. For example, an authority such as Hackney is getting £6,500 per secondary place, yet some schools in Gloucestershire are below the fair funding amount of £4,800 per secondary place.

[Layla Moran]

I apologise for intervening, as I have already spoken for a long time. I am a vice-chair of the f40 group. Does the hon. Gentleman agree that the current calls from the f40 are about not just distribution but quantum? The “Together for Education” event that took place across the way in Westminster on the weekend before last called for an extra £2.2 billion a year in the education budget, because the f40 group recognises that we can redistribute all we want but the quantum also needs to rise.

[Sir Geoffrey Clifton-Brown]

I accept what the hon. Lady says. The problem is that it is about not only the money that schools get, but the costs that central Government keep imposing on schools—pensions, the apprenticeship levy or other expenditures. The costs keep going up, so the amount that schools have to spend is squeezed every year.

The Government need to do two things. First, they need to consider the quantum, as the hon. Lady has said. Secondly, when they impose an additional tax or an additional cost on a school, they need to consider very carefully how that school’s budget is being squeezed. We want to give our children the fairest possible start in life, and allocating adequate resources to education is almost the most important thing a Government can do, which is why I feel so strongly about this issue.

I also feel strongly about children’s special needs. The amount that Gloucestershire is spending in this regard is going up and up. I am grateful to the Government for providing an additional £1.35 million this year and next to deal with the problem, but they need to understand the causes of the increased demand in special needs, and education, health and care plans. The Government probably need to ring-fence this budget so that we do not get into the situation that we did this year, whereby Gloucestershire County Council was going to top-slice its general schools budget by up to 0.5% to deal with the problem. It is currently entitled to do so, but that is not fair on schoolchildren in general, which is why the Government need to ring-fence this budget.

Local enterprise partnerships—where local authorities contribute a significant amount of money, certainly some of the expertise and some of the governance—are rather variable, as we discovered from the NAO report. Some work extremely well; some work far less well. Some are governed extremely well; some are governed less well. There is geographical overlap in some, but not in others. If the Government wish to deliver their industrial strategy to the best possible degree, they need to look at the whole matter of LEPs quite carefully.

The fire and rescue service in Gloucestershire is currently run by the county council, but there is considerable pressure from the Home Office to transfer it to the police and crime commissioner. We have already had one inquiry and the proposal was rejected, yet the police and crime commissioner still wishes to overturn the decision. I say to my colleagues on the Front Bench that a considerable amount of resource and effort is being wasted by continually bickering over this matter. The fire and rescue service, I say loud and clear, is well run in Gloucestershire. The county council supports it, as do, I think, most Conservative colleagues—certainly, I support it very strongly. It should remain where it is.

We need to get local government funding functioning properly. This is a really serious problem. The Government wish to move to a new form of funding—the core rate support grant—in local government in 2021. That means that there are vital decisions that they need to make quite quickly. The proposal is that councils should keep three quarters of the revenue, down from 90% originally, but fundamental decisions on how this will work are coming very late in the day. No council should be under financial pressure, because of the tier splits, to move to 75% retention. We need to decide what the distribution system should be. If Westminster Council, for example, keeps 75% of its rate support, it will be awash with money, whereas a council in the north that keeps 75% will be in severe shortage. The councils need to know. As the hon. Member for Oxford West and Abingdon says, it is only fair that the funding system for councils both for next year and the year after are made very clear fairly soon.

The other side of the coin is that the Government have a target for building 300,000 more homes each year. Councils will be able to do that only if they are properly incentivised by the council tax system. They need to be able to work out what that system is going to be. As part of the local government finance reorganisation, what will the incentives be for councils that want to expand their council tax base, as with the incentives to expand their business rate base? Again, the Government need to make some decisions on this. They need to tell us whether the new homes bonus will remain, and in what form, to give councils that incentive.

This is a huge field. I think I have cantered over some of the main areas, and others will do the same.

[Mr Deputy Speaker (Sir Lindsay Hoyle)]

I remind the House that I have been told that there is an informal eight-minute limit. If we can stick to that, we will help everybody.