Leasehold Reform

Debate between Heather Wheeler and Geoffrey Clifton-Brown

Thursday 11th July 2019 Commons Chamber

[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.

Electoral Registration and Administration Bill

Debate between Heather Wheeler and Geoffrey Clifton-Brown

Wednesday 27th June 2012 Commons Chamber

[Heather Wheeler (South Derbyshire) (Con)]

A number of Members have major overseas firms based in their constituencies—I have Toyota, Rolls-Royce and Bombardier—and have constituents who go to work abroad for these firms for many years. It is outrageous that they might be working for firms based in our constituencies and not have a vote. What does my hon. Friend think about that?

[Geoffrey Clifton-Brown]

My hon. Friend has read my mind. I shall happily address her issue a little later, but she makes an extremely good point.

The House and the British people should take no pride in the fact that so few citizens living abroad are registered to vote. At a time of decreasing voter turnout, the overseas vote represents a potentially large pool into which we could tap, if the House was minded to accept my new clause. This issue will not go away, and today is a timely opportunity to tackle it. Each year, more and more British citizens, for one reason or another, choose to move abroad, as my hon. Friend said. The ONS international passenger statistics show that an estimated 130,000 British citizens left the UK in the year to March 2011—up from 119,000 in the year to March 2010. In 2008, according to the IPPR, of those who moved abroad, 55% did so for work-related reasons, as my hon. Friend said, 25% for study and only 20% for retirement. With an ageing population and particularly with the increased opportunities to work and study abroad, people are bound to continue to leave the UK.

In most other countries, both developed and emerging, voting rights for parliamentary elections depend solely on nationality, not on an arbitrary time limit. For example, US nationals can vote in presidential, congressional and state elections, regardless of where they reside in the world. Similarly, Australian nationals can vote in the equivalent elections there, no matter where they live. However, the most startling example comes from our nearest neighbour. French citizens in the UK have just elected a new President and taken part in parliamentary elections for one of the 11 Members of Parliament whose job it is solely to represent French people abroad. They include the French MP for the newly created constituency of North Europe, who is in the French Assembly to represent French people living in the UK, Ireland, Scandinavia and the Baltic states.

The right of Spaniards abroad to vote is enshrined in article 68 of the Spanish constitution. Likewise, the Portuguese constitution states explicitly that the single Chamber, the Assembly of the Republic, is

“the representative assembly of all Portuguese citizens”.

As a result, all Portuguese citizens living abroad have the same right to vote in Assembly elections as fellow citizens living in their home country. The simple fact is that the citizens of the US, Australia, Belgium, the Netherlands, France, Germany, Portugal, Slovenia, Spain, Sweden and all these other countries have better voting rights for their citizens abroad than we do for British citizens living abroad.

For a democracy as ancient as ours, it is not an exaggeration to say that it is a stain on our democratic principles that our citizens are placed at such a disadvantage when they have moved abroad compared with citizens from those other countries. Her Majesty’s Government is very happy to collect tax from most of the enormous number of people involved, but denies them the vote. British citizens who have lived abroad for more than 15 years are completely disfranchised from voting in the UK. There is certainly no lack of interest among British citizens who have lived abroad for more than 15 years. Whenever I have addressed branches of Conservatives Abroad, this has been a contentious and profound issue. I understand that the Labour party has a similar organisation and that the Liberal Democrats have recently established their own version, so I have no doubt that this issue will have been raised by other parties’ organisations as well.

The states in which these British citizens reside do not allow them to vote as residents, because voting rights are based on nationality and not residence, and they cannot vote in the UK on the basis of the current rule, for which there is no obvious rationale. I challenge the Deputy Leader of the House to state where there would be any disadvantage in abolishing the rule. The consequence of the rule is that many British citizens living abroad are in a state of electoral limbo, unable to participate in any election whatsoever. That seems to be a very unsatisfactory state of affairs.

It is not just me saying this, as a number of learned Lords agree. Lord McNally, the Liberal Democrat Minister of State for Justice, said:

“I do not think there is a rationale…for the figure of 15 years, five years or 20 years”—[Official Report, House of Lords, 2 March 2011; Vol. 725, c. 1133.]

The noble and learned Lord Lester of Herne Hill said on the same day:

“I am not aware of any rationale for how these periods have been chosen. They seem to be entirely arbitrary”—

the point I was making—

“and, I dare say, discriminatory in a way that violates Article 14 of the European convention read with Article 3 of the first protocol.”—[Official Report, House of Lords, 2 March 2011; Vol. 725, c. 1024.]

A number of learned people clearly think that this rule is unfair.