Protection for Homebuyers
Debate between Heather Wheeler and Peter Bottomley(6 years ago)
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Mrs Wheeler
I thank the hon. Lady for that very useful intervention. My team will take that back and we will write to her with an answer.
We know more needs to be done and expect more to be done. That is why the Government announced measures to champion the rights of buyers of new-build homes, including a new homes ombudsman. That will provide one obvious place for consumers to go, and will have the powers such a body needs and the interests of consumers at its heart. It will ensure that when people buy a new-build home and do not find the standard of build they expect, they are treated fairly and their concerns are dealt with quickly. We will work with consumers and the industry to develop our proposals, which will be published in more detail soon and will set out the scope and powers of the ombudsman.
In the meantime, we have been challenging industry to improve redress in the shorter term. The work being done by the Home Builders Federation could lead to a voluntary new homes ombudsman and better redress for consumers in the short term, while Government works towards legislation. In our response to our redress consultation we will set out the standard we expect these voluntary arrangements to meet. We also expect that any new redress scheme for buyers of new-build homes should be free to the consumer, as in other sectors.
We believe there should be a clear and quick escalation route for issues of building safety and are exploring a number of options. Again, we call on the industry to implement actions and processes so that the examples we heard on BBC “5 live Investigates” do not happen in the first place. We want to see a marked improvement in the standards of new homes and will ensure that home buyers get those standards, not only for new-build homes but across the market.
Further to building regulations and standards of new-build finish, the leasehold system needs to be fair and transparent to the consumer, so that their home truly feels like their own. Unfair practices in the leasehold market have no place in the modern housing market, nor do excessive ground rents, which exploit consumers who get nothing in return. In July, the Government announced that no Government-funded scheme would be used to support the unjustified use of leasehold for new houses.
Sir Peter Bottomley
We are all grateful for what the Government have said in the past and what the Minister is saying now. One of the problems with ground rent is the question of what it is there for at all. The commonhold gets rid of ground rents. We do not know whether the help to buy scheme is used to commonhold. Can the Minister make an announcement about how that problem will be solved, so that commonhold homes can be accepted for help to buy?
Mrs Wheeler
There are discussions going on about commonhold. I will be happy to talk to my hon. Friend about this offline.
Our technical consultation on how to improve the leasehold market and make it fairer for consumers has now closed, and we are analysing the responses. We want to see developers support everyone who has onerous ground rents, including second-hand buyers, and for customers to be proactively contacted. We are helping existing leaseholders by making it easier and quicker for leaseholders to form residents’ and tenants’ associations. We are proposing a single, mandatory and legally enforceable code of practice covering letting and managing agents, giving people a clearer and simpler route to redress. We are publishing a how-to-lease guide for consumers and looking carefully at how we currently give support and advice to leaseholders.
The hon. Member for Washington and Sunderland West (Mrs Hodgson) was very interested in educating leaseholders. We are publishing the how-to-lease guide, which will educate leaseholders. We have also held workshops with the industry to develop the how-to-buy and how-to-sell guides, which will be published in 2019.
The hon. Member for Poplar and Limehouse asked about leasehold reforms. LEASE, the group that we use to help give information, is unambiguously on the side of leaseholders. LEASE no longer pursues any commercial interests and it does not advise leasehold professionals. [Hon. Members: “Good.”] Yay—I just had a good. Get that in Hansard—sorry, I shouldn’t say that.
The hon. Member for Washington and Sunderland West asked about permission fees. Lord Best has a working group that is considering permission fees and whether they are reasonable or they should be banned in total.
The hon. Member for Ellesmere Port and Neston (Justin Madders) mentioned the £10 ground rent. For a peppercorn to exist there must be a consideration of exchange of money. We are concerned that peppercorn could be open to abuse and therefore we have considered that an amount should be specified in statute. We have chosen £10 because that is the annual amount used for right to buys.[Official Report, 21 January 2019, Vol. 653, c. 1MC.]
Mrs Wheeler
Given the previous week’s history of sharing legal advice, I might skip over that one, if the hon. Gentleman does not mind. Perhaps he and I could have a cup of tea. The £10 peppercorn ground rent was part of our recent leasehold consultation and we will be considering our approach in light of the responses to the consultation.