Renters (Reform) Bill (Fourth sitting)

Helen Morgan Excerpts

Committee stage
Thursday 16th November 2023 Public Bill Committees

[Helen Morgan (North Shropshire) (LD)]

Q I want to pick up on the point about delays in the court process. We heard this morning that the president of the Law Society is concerned about the lack of access to legal aid and the fact that, because so many people are unable to access it, they will be disadvantaged in the court process. My first question is, what are your thoughts on that?

My second question is about clause 18 and local authorities no longer having a duty to help people when they have been made homeless. Shelter has said that the Bill does not specify when help to prevent homelessness should be available to private renters. Do you have a view on that and how it could be addressed?

Liz Davies: First, housing legal aid is absolutely in crisis. The number of housing legal aid providers is diminishing each year. The Law Society has an amazing and heartbreaking interactive map where you can press on a county and discover that there are no housing legal aid providers or one of them in the area. Obviously, London is slightly better served. That is letting down everybody who cannot afford to pay for housing legal advice.

That needs fixing, and it needs an injection of resources—there is no doubt about that—but that is not a reason why there would be difficulties for landlords in obtaining possession under these new proceedings, not least because the Government have put this money into the duty solicitor scheme. Where there are no housing legal aid providers and a tenant turns up at court having been unable to find advice in advance, they will see the duty solicitor. While Richard Miller is absolutely right to be concerned about the sustainability of the housing legal aid sector—we all think it could collapse in a few years—this particular area of getting advice about possession is covered by the duty solicitor scheme. That is the first thing.

Homelessness is covered partly in clause 18 and partly in schedule 1, but this is one of the unintended consequences that the Committee should look at. The current position is that somebody is threatened with homelessness if they are likely to be homeless within 56 days. If they have a valid section 21 notice, which is two months or 56 days, they are threatened with homelessness. It is deemed. All that a local authority has to do is look at the notice and say, “Yes, that’s valid,” and that means that it owes the tenant what is called a prevention duty—a duty to help them to prevent the homelessness—and spends the next two months trying to help them to find somewhere else to live. That is a good thing, because if it works, it averts the crisis of homelessness. It means that someone can move from their previous tenancy into their new one.

As a result of the abolition of section 21, this Bill retains the definition of threatened with homelessness within 56 days, but takes away the deeming provision whereby if you have a notice of possession within 56 days, you are deemed to be threatened with homelessness. If that was reinserted, if a tenant received what would be a section 8 notice requiring them to leave within two months, you would be back in the straightforward position that they go along to a local authority, the local authority would say, “Yes, you are threatened with homelessness. We don’t need to make further inquiries or think about it any more. We accept that we owe you a prevention duty and we will help you to find somewhere else to live.”

That is absolutely the best thing, because it front-loads all the looking for somewhere else to live while a tenant still has a roof over their head, rather than waiting for the crisis moment when they have to go into interim accommodation or end up on the streets. I urge the Committee to think about an amendment that requires that section 8 notices count as deemed homelessness. I know there have been some drafts flying around, so the work has been done.

[Matthew Pennycook]

Q I have three questions, if we can squeeze them in—I will get in as many as I can. Do tenants have enough power to enforce the measures in this Bill via rent repayment orders, and if not, where might we seek to reasonably apply them where they do not apply as the Bill is currently drafted?

Simon Mullings: Rent repayment orders create, as I have said before to officials in DLUHC, an army of motivated enforcers, because you have tenants who are motivated to enforce housing standards to do with houses in multiple occupancy, conditions and all sorts of things. There are clearly opportunities to expand the rent repayment order scheme, perhaps to sit alongside existing enforcement measures to do with offences. I am sorry that I do not have really specific references for you, but certainly expanding the rent repayment order scheme could in principle take some burden off local authorities in terms of their obligations, which would be an extremely important measure.

Giles Peaker: Was the question about enforcement of RROs or about the use of RROs in enforcing?

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[Jacob Young]

Also, forgive me—I cannot remember which panellist mentioned Jacky Peacock earlier on, but she talked about this idea of an MOT in order to access the portal. Each of the panellists has mentioned that local authorities have struggled for resource. How would an MOT help? Who would verify such an MOT? I suppose, if we were to go down that route, it would mean local authorities facing even more burdens.

Samantha Stewart: In answer to your first question, there will probably be some. I will definitely make sure that we cover that in our written evidence, because I am sure there will be something we can contribute that we are pleased not to see. Forgive me—I do not know that answer right at this moment in time.

On the MOT, we all know that it is not an easy thing to do, but there is certainly a lot of detail in the Rugg and Rhodes report about how we could go about that. Again, I would be really happy to put that in our written evidence.

Linda Cobb: I manage a large landlord accreditation scheme across lots of different local authority borders, and obviously landlords then register on to a portal, so I am aware of the complexities of managing such an unwieldy beast, so to speak. As part of our landlord accreditation scheme, we have a property check—similar to what Jacky was saying with the property MOT. We do a sample compliance check. DASH and Unipol looked at about 2,000 properties that we had inspected; we assessed those inspections, and we had actually helped our landlords to remove or reduce almost 1,500 hazards that simply would not have been removed or reduced by simply registering on a portal and just self-declaring. Those were good landlords; they were landlords who were willing to make the change, and they made it quickly. But there is an argument that with just self-declaring, we have to be careful about the digital policing of a portal and giving false assurances. We can learn from landlord accreditation schemes and from schemes that are already going on. We really need to do that with the portal as well.

Samantha Stewart: It’s true. It is about taking the best in class as well, isn’t it?

Linda Cobb: Yes. We also have to be careful about avoiding duplication. From my landlord accreditation scheme, I know that landlords do get a little bit confused—they have licensing, accreditation, deposit registration and so on. If we are going to add an ombudsman, we will have to be very careful about avoiding duplication.

[Helen Morgan]

Q The market is fragmented. Lots of rented property is owned by people who only have between one and four properties. Those people are essentially unprofessional, even if they are willing. I am worried about how they might slip through the gaps because, if they are not using a letting agent or a management service, they may be unaware of changes to the law or of how to register. How do you think we should address that so that landlords know what they need to do? How can we ensure that tenants know that they have access to this information and the right to challenge? I doubt some of those people are following what is going on in this Committee.

Linda Cobb: I will take the landlord bit. I think that to call smaller landlords unprofessional is not quite right. The majority of landlords in our landlord accreditation scheme have between one and four properties; most have just one. We see very professional behaviour.

[Helen Morgan]

To clarify, I do not mean that they are deliberately unprofessional. I just mean that they may not be on top of all the legislative changes.

Linda Cobb: Yes. I think we need to change the way we communicate with landlords. We need to get information out there, because what we found through trying to drive up numbers in our accreditation scheme was that a landlord could be anywhere. Marketing was very difficult. Where do you go to advertise this information? It has to be very mainstream. Look at gas safety certificates: the campaign when they came in was very effective because it was a mass campaign. Safe Suffolk Renters is doing something very similar and we can learn from its work. Going back to what Sam was saying, we should learn from what has been good in the market at getting messages out there.

Roz Spencer: From a renter’s perspective, there is the obvious problem of renters’ knowledge about their rights. I think there are three reasons why renters’ understanding of their rights is poor: landlord and tenant law is so complicated; tenant rights are so slim; and the expectation of enforcement is at a low ebb. Renters have challenging lives and other things to think about. Their bandwidth to pay attention to something complicated, thin and unlikely to deliver for them is quite limited. If you get things right around renters reform, raising renters’ awareness of their rights will be much easier.

Linda Cobb: I am a big fan of going back into schools and doing work at that very early level. The majority will go into rented accommodation at some point, and we need to get into schools to show young people what a good tenancy is like and what their rights are from a very young age.

Samantha Stewart: That is a really good point. Let’s face it: renters are going to be renting for a long time, so getting them to understand things early, right from the start, is a fabulous opportunity.

Linda Cobb: Yes. They should understand what their responsibilities and rights are.

[Nickie Aiken (Cities of London and Westminster) (Con)]

Q Sam, I was interested in what you were saying about maggots falling out of cracked ceilings. I was a councillor for a long time and a cabinet member responsible for public protection. That included environmental health. I was regularly shocked by how often tenants lived in such dreadful conditions until someone said, “You should report that to environmental health,” and then there would be a notice to improve. Surely there are protections now, but tenants do not know about the Environmental Protection Act 1990 or the Housing Act. This Bill will strengthen things like that, but what can we do to improve people’s knowledge of the fact that they can still go to environmental health to get their housing sorted?

Samantha Stewart: I think we just have covered some of the ways that we can do that. We just have to repeat the message consistently: there are fabulous organisations out there that advocate for and help tenants, and there are fabulous local authorities that can do the same. I can speak more from a vulnerable tenant perspective, because that is our focus. Even if they know where to go, they do not go, because they do not feel they have the power and they fear eviction if they tell anyone.

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[Lloyd Russell-Moyle]

Q Some of us push very hard for citizenship lessons and wider lessons like that in schools, but that is another debate. You might not know about this, but when the deposit protection scheme was rolled out, there was a big information campaign with local authorities and with charities and non-governmental organisations to inform tenants about their ability to get rent repayment orders if deposits were not secured. That seems to me to work very well. Do you have any views on and learnings from that process?

James Munro: Yes, that process has worked well, but I think that is because it is a process that benefits all parties. It is very strictly controlled. The sanctions and penalties are clearly set out. I think it is something that works very effectively. Redress scheme membership, for example, works very effectively. The Government obviously issue the “How to rent”, “How to buy” and “How to lease” guides—all the different how-to guides—and I think they could play a very useful part, but obviously you have to get them into the hands of the tenants. Again, it comes down to the point that was discussed earlier, especially with students. Students just want to get their hands on the property—they will sign anything just to get their hands on it. They do not necessarily understand, realise or appreciate any rights or obligations that they may have under that agreement.

[Helen Morgan]

Q I just want to go back to that point. Earlier, I used the word “unprofessional”. What I meant was amateur rather than negligent or wilfully reckless. There are a lot of accidental landlords out there—I am talking about people who do not use a letting agent. They will need to be aware of their responsibilities under this legislation. Who do you think is the right person to manage the information campaign to ensure that they are aware? Is that the local authority? Is it the charitable sector? Who should be ensuring that landlords are aware of their responsibilities under this new legislation?

James Munro: I think it is a combination. You have the National Residential Landlords Association; you have various trade bodies and various professional bodies that represent landlords. They are the first port of call. I also think local authorities and charities—all those third sector organisations—could get that information out there. The challenge is that the landlords who have perhaps one property are, for all intents and purposes, treated almost like private individuals. For tax purposes, they are virtually treated as private individuals, so there is no real avenue to find out where they are. That is going to be the challenge—to reach out to them but also to get them to comply with the requirements.

[The Chair]

As colleagues have no further questions, I would like to thank you very much indeed, Mr Munro, for giving evidence to the Committee. Your words will stay with us as we consider the Bill line by line, starting from next week.

Ordered, That further consideration be now adjourned. —(Mr Mohindra.)

Renters (Reform) Bill (Second sitting)

Helen Morgan Excerpts

Committee stage
Tuesday 14th November 2023 Public Bill Committees

[The Chair]

I call Helen Morgan. This will have to be the last question, I am afraid.

[Helen Morgan (North Shropshire) (LD)]

Q Briefly, you mentioned the possibility of the attractiveness of longer-term tenancies without the six-month break point at which you can be evicted. Will you expand on that?

Ben Twomey: It is really important, if you are thinking about a private rented sector that is attractive to tenants, rather than something that we feel trapped in. It needs to be something that recognises that there are 11 million private renters across England, and that, for many of us, we are here to stay in the private rented sector. It is no longer just a quick in and out—a temporary thing—while we save enough money to buy our own home. The protection is important, knowing that you can be in your home for a certain period of time—unless, of course, you do something seriously wrong, in which case there are protections in the grounds for landlords to act on that. At the moment, there is only a six-month protected period in which you are safe from a no-fault eviction, within the Bill’s wording. As I said, that does not really change the situation we are currently in, so it is not actually ambitious towards a fairer private rented sector.

We believe that the period should be two years. That would mean the landlord—if they are taking housing seriously and recognising that homes are the foundation of our lives—would be comfortable knowing that they can hold off selling the property and moving a family member in for two years. If they need to do some of those things afterwards—which would be a great shame, because the tenants are probably enjoying the property—they can still do that after that period. Six months feels far too short; it treats it like temporary accommodation—

[The Chair]

Order. I am afraid that brings us to the end of the time allotted to the Committee to ask questions. I thank the witnesses, on behalf of the Committee.

Examination of Witness

Francesca Albanese gave evidence.

Renters (Reform) Bill (First sitting)

Helen Morgan Excerpts

Committee stage
Tuesday 14th November 2023 Public Bill Committees

[Dr Ben Spencer (Runnymede and Weybridge) (Con)]

I declare an interest in that I receive support, in particular as set out in my entry under category 2(a) on the Register of Members’ Financial Interests, from individuals with an interest in this area.

[Helen Morgan (North Shropshire) (LD)]

I am a joint owner of a property that is let out for residential rent.

--- Later in debate ---

[The Chair]

I think we all do, in one place or another, but that is probably not an interest to declare: it costs you money, rather than getting you any money.

[Helen Morgan]

I am also a vice-president of the LGA.

[The Chair]

There being no further interests to declare, we will crack on with the evidence. I call the shadow Minister.

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[Mike Amesbury]

Q Given that somebody is being evicted every 23 minutes through a section 21 no-fault eviction, should there be a timescale to abolish no-fault evictions? Would a clear timescale be helpful, particularly to the people concerned?

My second point is about prevention. What more needs to happen regarding the duties of local authorities and councils to people who are not evicted, given some of the current holes in the Bill?

Polly Neate: Yes, it would be very beneficial to have a clear timetable. I cannot stress clearly enough my previous point: this was always going to be subject to lobbying for delays and it is really important that the Government hold their nerve. We need clarity about when this will happen, because we also have a commitment to reducing homelessness and this is a really important way of doing that. When people get the eviction notice, for whatever reason, it is really important that they still have the right to access homelessness assistance from their local authority. It is really important that that right is not watered down as a result of the Bill.

[Helen Morgan]

Q Building on the point about local authorities and their responsibilities to people who have been evicted, they are currently reporting intense pressure on their budgets because of the escalating number of people who have been evicted and made homeless. Could you build on what you would like to see in the Bill to protect those people? Do you think that ending no-fault evictions more rapidly would assist local authorities in managing the financial pressures of those homeless people?

Darren Baxter: We know from the data that local authorities capture why households come to them reporting homelessness, and why they then have a duty to house them, and section 21 no-fault evictions are a really significant part of that. Anything that reduces that flow will inevitably take some pressure off local authorities, so the more quickly you do this, the more quickly you stop one of the really significant drivers of homelessness.

Dame Clare Moriarty: We need to recognise that there is a whole range of problems with the housing market, including the extent to which rents are simply not affordable for many people. The local housing allowance is now seriously out of kilter with what people are paying for rent. That means that if you are on benefit in the private rented sector, a big chunk of your living costs go just on paying rent.

There are lots of broader questions playing into the pressures landing on local authorities. Having said that, section 21 evictions are definitely part of the problem, but they can be addressed, and the Government are committed to addressing them. As Darren was saying, this Bill has been a very long time in the making, and addressing the issue of insecurity for tenants, and the number of evictions that that is driving, has to be helpful. We should not kid ourselves that it solves the whole housing market problem, but it would make a real difference to people.

Polly Neate: I agree with all that. The Government have decided to remove the prevention duty and not replicate it for section 8 evictions, leaving it to the discretion of local authorities to decide when a duty is owed to tenants. Given the resource constraints and the issues in local authorities, there is a real risk that people just will not get the homelessness support that they need, so we urge that that be changed in the Bill.

It is absolutely right to say that no-fault evictions are not the only reason local authorities are overwhelmed by homelessness. The freezing of housing benefit and of local housing allowance is another major reason, and of course the really serious lack of social housing stock is at the root of this. This is not a magic bullet to resolve these issues, but the Government can remove a really significant factor contributing to the overwhelming pressure on local authorities.

[Matthew Pennycook]

Q Returning to possession grounds, concerns have been raised about new grounds 1, 1A and 6A and the changes to existing ground 14. I want to ask the witnesses a question about the new ground for possession 8A, which concerns repeated rent arrears. Do you think that that new ground is needed in any form, or should it be removed from the Bill? If it is to stay in the Bill, what changes might strengthen it to better protect tenants?

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[Mike Amesbury]

I did ask about housing courts.

Ben Beadle: Let me deal with that. We like the principle of a housing court, and the Select Committee obviously likes it as well. Given where we are, I guess there is a realism in terms of what we can do with the existing system to improve it rather than carving out a new housing court. We support the concept, but I think we might be able to do a number of things that end up meaning we see change more quickly. That includes playing with the civil procedure rules, for example. Those are things that can be done and timed so that we can assess improvements. Rather than having one measure of an element of a possession case, there ought to be different measures. Everybody ought to know what the measures and targets are. Otherwise, how do we know what reform looks like and whether it has worked?

So there are things that we would—not necessarily substitute—for a housing court, but there is not a lot of money to go around. Although we love the idea, we are pragmatists in the sense of asking, “What would a housing court do differently that we could not do with the existing regime?” That is where we are focused.

Timothy Douglas: I would certainly agree with that and would also perhaps move towards a tribunal structure, which is less intimidating, less informal and does not necessarily have to use court buildings—any public building can be used across the country. But essentially, in an ideal world, this needs to incorporate the powers of the county court and the first-tier tribunal. You would then be able to appoint specialist judges, surveyors and so on. In an ideal world, yes, we totally need to get there, but I agree with Ben that it is about perhaps looking at a dispute resolution and those sorts of issues within the existing system before we get to the ideal. But that certainly would be welcome in the long run.

[Helen Morgan]

Q Theresa floated the idea of longer-term tenancies, which would provide security for landlords because they would know how long their tenant would be in there. Do you think that there would be significant uptake on those from renters given that the proposed solution—periodic tenancies—would give them as long as they wanted provided that there was not a reason for the landlord to evict them? Do you think that would provide the extra security that they need?

Theresa Wallace: I think so, because I do not think we are giving them any security with the current proposals because a landlord can serve a notice either to sell their property or move back into it. The majority of section 21s are served for rent arrears, or because the landlord is selling or they want to move back in, or for antisocial behaviour. You do not have to give a reason but those are the main reasons that section 21s are used.

We will still continue to have those reasons, and by starting off with periodic tenancies with no fixed term at all, okay, the landlord cannot serve a notice for six months, but that is the most that tenants are being told that they will be secure for. Last week, I had tenants saying to me, “I want to be able to secure a long-term tenancy. My children are in the local school. I don’t want my landlord to suddenly say that he is going to sell the property or move back into it.” There are definitely tenants who want longer secure terms and there are landlords who want to do that for their own security. As I said earlier, I still think that they would be happy to include the two months’ notice for the tenant from six months in case the tenant’s circumstances changed. That gives the tenant the flexibility of knowing that they can have the tenancy for however long they agree to it, but if their circumstances change after six months, they can also move out.

[Helen Morgan]

Q Just to clarify, would you not allow the landlord to serve any of those types of no-fault evictions after six months?

Theresa Wallace: No, they would be committed for the entire term.

Timothy Douglas: I totally agree with that, and I think it is not an either/or, as has been stated. Let us have the option. The beauty of the private rented sector is that it is built on that flexibility. Without the flexibility of that option, we are closing that down. Of course, you can have a fixed term for up to three years—otherwise, it then becomes a deed, as we understand it. You can have it for longer. So in theory, it is already there and that 12-month fixed term, or longer, with break clauses could offer lots more flexibility and the security that certain tenants want, and we know that agents are hearing that.

[Lloyd Russell-Moyle]

Q I am interested in this. Are you saying that in the fixed period, the landlord would not be able to execute any eviction grounds, or just not grounds 1, 1A and 1B?

Theresa Wallace: If it were rent arrears, that would be different. Landlords cannot afford to keep properties when they are not receiving the rent. For rent arrears, I am saying that the landlord would not be able to serve the notice to either sell the property or move back into it.

Levelling-up and Regeneration Bill

Helen Morgan Excerpts

Consideration of Lords message
Tuesday 24th October 2023 Commons Chamber

[Mr Deputy Speaker (Sir Roger Gale)]

I call the Liberal Democrat spokesperson.

[Helen Morgan (North Shropshire) (LD)]

I declare an interest as a vice-president of the Local Government Association. I am going to make some brief comments because I spoke in the debate last week. I reiterate the concerns about this legislation, which has been poorly drafted. Lords amendment 22B would allow councillors to attend meetings virtually or hybrid-style meetings. The amendment is a good opportunity to increase participation in local politics and I think that we should be encouraging it.

For many councillors, the reality of fulfilling their role means working around another full-time job, working late into the evening as well as at weekends, or balancing their parenting commitments, so councillors’ time is under great pressure. Most councillors are in their post purely because of their commitment to their local community, and we should be helping them out by allowing the occasional virtual attendance at a meeting if that reduces the time burden on them. I have heard the argument that our constituents rightly expect us to attend Parliament in person and that elected members of the local council should therefore be expected to do the same, but that argument misses the incredibly important point that, for most people, being a councillor is not a full-time salaried job. To expect them to sacrifice yet more of their time to travel to meetings to offer contributions that could otherwise be made online is simply unfair.

Travel brings me to a particularly pertinent point at the moment. In my constituency and other rural parts of Britain, it is not uncommon for council meetings to be held many miles away from the ward or division that a councillor represents or from where they live. In some cases, that will mean travelling 20 to 50 miles one way to attend a council meeting. Clearly this is a problem in poor weather, as we only have to look at the damage and chaos of the last week to see. It also means that councillors usually have to have their own car, not least because an evening meeting will be held when most bus services have stopped running for the day. That means that people are being excluded from becoming involved in local democracy simply because they do not have access to a car. The Levelling-up and Regeneration Bill was supposed to put greater devolution at its heart and encourage more people into the democratic process. If we really want to engage people in politics and widen representation and access, we should be making it easier for people to represent their communities, not more difficult.

I move briefly on to Lords amendment 45. It is the Liberal Democrats’ view that the original amendment is superior to the Government’s amendment in lieu. It would place duties on the Secretary of State to mitigate and adapt planning policy to reflect climate change. Planning is an integral part of achieving net zero, and as such it is only right that it puts climate considerations at its heart. At the moment, net zero goals are inconsistently applied to planning applications. Local development plans consider climate complications, whereas individual planning applications do not and, without the Government’s amendment in lieu, national development management policies—NDMPs—will not either.

The Lords amendment would extend environmental duties to all aspects of the planning system with a sharpened focus, ensuring that new plans would contribute to specific climate and nature targets. A dual approach is particularly important because climate and ecological decline are closely intertwined, and unfortunately both are accelerating. I do not think that this amendment should be controversial. It is publicly backed by environment businesses, local government and environmental NGOs. The time has run out for looking at climate change simply as an add-on or an afterthought, and given the Government’s recent back-pedalling on their net zero commitments, this should be an easy opportunity to put climate change at the core of the planning process.

Without these Lords amendments, the Bill will miss two key opportunities to encourage local democratic participation and consider climate complications to planning applications. Both these factors are surely at the core of what levelling up should be about.

[Mr Deputy Speaker (Sir Roger Gale)]

With the leave of the House, I call the Minister.

Renters (Reform) Bill

Helen Morgan Excerpts

2nd reading
Monday 23rd October 2023 Commons Chamber

[Helen Morgan (North Shropshire) (LD)]

Let me first draw Members’ attention to my own entry in the Register of Members’ Financial Interests. I am also half a residential landlord.

The Bill has taken far too long to reach this stage. It is more than four years since the Government’s manifesto pledge, and now, in the dying months of the current Parliament, the Bill has only just reached Second Reading. Broadly, however, my Liberal Democrat colleagues and I support it, and will vote for it this evening. Any legislation that paves the way towards a fairer situation for both renters and landlords must be welcome. Most important is the end of no-fault evictions, and I shall say more about that shortly. We also welcome clauses that will allow renters to keep pets in their homes, and the creation of a housing ombudsman, which will enable decisions to be made more quickly and cheaply for tenants and landlords.

Security for both tenants and landlords is vital, and it is essential that in providing that security for tenants, we do not inadvertently cause an exodus of landlords from the rental market. The Country Land and Business Association has found that 44% of landlords plan to sell or change the use of their rental properties in the next two years, which is cause for concern because at the same time we are seeing an increase in the number of people entering the private rental market. Rightmove estimates that for every property advertised for rent there are 24 applicants, whereas there were just eight in 2019. We need to ensure that we are incentivising landlords to stay in the market and to give renters security once they manage to become that one person in 24 to secure a property to rent.

The length of rental tenancies is an important element in that regard. In its current form, the Bill introduces rolling tenancies without specified end dates. That provides considerable security for tenants, but the six-month protected period is potentially too short. Meanwhile, 43% of landlords do not have a portfolio of properties; they have just one, so the risk of empty months is significant for them. Providing longer-term tenure might alleviate that risk and remove an incentive for landlords to exit the market. The Liberal Democrats’ proposal is to extend the default tenancy from one to three years, and, during that three-year period, only to allow rents to increase by the rate of inflation. That would give both renters and landlords greater stability.

As I mentioned earlier, the Liberal Democrats welcome the banning of section 21 or no-fault evictions. I am sure that Members on both sides of the House have had an enormous amount of casework featuring, for many renters, a sudden and drastic upheaval in their everyday life caused by a section 21 eviction. Such evictions leave people stressed about their security of tenure and worried about not having somewhere to call their home, and can pull the rug from under their feet. They can require people to move to a new area, forcing them to find new schools for their children or new jobs for themselves and try to settle into new communities. That is particularly significant at present, because more families than ever are living in private rented accommodation, and, according to the Renters Reform Coalition, 1.8 million renter households include children.

The Government’s commitment to abolish those types of eviction and legislate for landlords to be able to evict only in “reasonable circumstances” is therefore a welcome step towards ensuring that renters’ rights are protected in law. It will also ensure that tenants living in properties suffering from disrepair or even infestation can report such issues to their landlords without the fear of a “revenge eviction”. It should drive up standards, particularly if coupled with longer tenancies. As always, however, there is a balance to be struck between providing security for tenants and ensuring that the legislation does not cause an exodus of landlords from the sector. It remains important for landlords to be able to remove tenants who are genuinely damaging their property or the surrounding community, but I hope that the Minister will make the definition of what will enable that to happen absolutely clear. It is also important to guard against landlords being able to use flimsy excuses to evict tenants, allowing section 21 evictions to continue in all but name.

I hope that the Minister will elaborate on the reform of the legal system that will be necessary to allow landlords to evict when there is non-payment of rent, unreasonable damage to property or clearly defined antisocial behaviour, or a genuine change in a landlord’s circumstances. A prompt and fair court process is obviously essential to retaining landlord confidence in a reformed system, but delays in that process should not be used as a mechanism to kick this important legislation into the long grass.

The quality of rental housing must also be considered. Black mould, damp, faulty boilers—I am sure we are all aware of the difficult conditions that some rental properties are left in. I say “some” with great seriousness, because not all private landlords leave their properties in disrepair, but we must make the Bill robust enough to challenge those who do. The Government have previously promised to introduce legislation at the earliest opportunity to apply the decent homes standard to the private rented sector. I find it concerning that that legislation has not been introduced, and the Government have instead announced that they will delay the requirements that will force private landlords to meet energy performance certificate standards.

I understand the cautious approach in ensuring stability of supply in the private rented sector, but responsible landlords should not baulk at taking measures over a reasonable timescale that will enhance the value of their asset. I also understand the concern about the usefulness of the EPC, but it should be possible to revisit that and phase in a more effective measure of energy efficiency rather than abandoning it altogether, providing certainty and a fixed timetable that landlords should be able to work to. Without such measures, the Bill risks offering rogue landlords an easy escape route when it comes to improving the quality of the properties.

The Bill is better late than never, but I urge the Government to revisit the issue of length of tenancy, to clarify the circumstances in which, and the legal process through which, a landlord would legitimately be able to evict a problematic tenant or sell the property, and to consider including a decent homes standard so that those renting privately can be sure of a safe and warm home for themselves and their families.

Let me end by calling for a rapid increase in the building of social housing, because a shortage of supply is behind all these issues in the private rented sector, and it leaves far too much power in the hands of landlords.

Levelling-up and Regeneration Bill

Helen Morgan Excerpts

Consideration of Lords amendments
Tuesday 17th October 2023 Commons Chamber

Finally, I want to touch on the duty to co-operate, which is often at the heart of the problems that constituencies such as mine face. I seek clarity from the Minister today, or in writing from the Secretary of State after the debate, as to what we mean when we refer to the alignment policy. I sincerely hope that this is not simply a relabelling of the duty to co-operate.

[Helen Morgan (North Shropshire) (LD)]

I draw Members’ attention to my role as a vice-president of the Local Government Association.

I congratulate my hon. Friend the Member for Somerton and Frome (Sarah Dyke) on her excellent maiden speech; I know she is going to join her Liberal Democrat colleagues in being an excellent champion for rural communities. There is a lot to get through, so I am going to restrict my comments to a specific number of amendments that I think are particularly important. However, it is important to acknowledge that 418 amendments were made to this legislation in the Lords, which is testament to the fact that it was a confused piece of legislation and possibly poorly drafted in the first place.

As we have just heard, Lords amendment 44 requires national development management policies to be reviewed through public consultation and parliamentary scrutiny. NDMPs offer a bold change to the planning system, and the Bill grants them primacy over local plans if they are in conflict. However, there was no provision in the initial Bill for NDMPs to be scrutinised by Parliament or the public. The Government have tabled an amendment in lieu, but that amendment still allows the Secretary of State to avoid parliamentary and public scrutiny and block any community intervention in the implementation of policy. We on the Liberal Democrat Benches strongly believe that Government should be scrutinised by Parliament, rather than just being able to dictate planning policy from the top, and that Lords amendment 44 was superior to the Government’s amendment in lieu.

I would also like to highlight Lords amendment 82. Earlier this year, the National Audit Office found that local authority planning services have been cut by £1.3 billion over the 10-year period to 2020. The Government have acknowledged the issue and agreed to increase planning fees by 35% for major applications and 25% for all other applications, but there is an issue with that: those percentage increases do not account for regional differences in cost. Who is left to pick up the bill for all these costly planning applications? As we have just heard from my hon. Friend the Member for St Albans (Daisy Cooper), it is council tax payers. Setting a national percentage increase in planning fees is a pretty sloppy solution: it will not cover the cost of the applications, but it will burden council tax payers who are already struggling with the cost of living crisis. As such, I urge the Government to consider adopting amendment 82, which would allow local authorities to set appropriate fees for planning applications.

On Lords amendment 241, quality education and quality healthcare require quality facilities. Since the start of this academic year, 147 schools across England have been forced to close because their buildings have been found to include reinforced autoclaved aerated concrete, or RAAC. That has impacted well over 100,000 students, with many being forced into e-learning at home. This is a generation whose education has already suffered during the pandemic; it is not really good enough to keep them away from classrooms now because the buildings they learn in are at risk of falling down. Of course, it is not just schools that have been found to be in a state of disrepair: multiple NHS trusts have confirmed that hospitals are crumbling around their staff and their patients. For that reason, the Liberal Democrats support Lords amendment 241, which requires the Government to keep a register of schools and hospitals that are in serious disrepair and update that register regularly, so that there is full transparency about the problem and Government can be held to account for ensuring its speedy rectification.

I move on to the proposed removal of subsection (5) of the new clause in Lords amendment 231, which prevents regulations under that clause from amending provisions in the Building Safety Act relating to building safety committees and building safety reporting. That is particularly relevant to the condition of electrical installations, stairs and ramps, emergency egress for disabled people, and automatic water fire suppression systems in relevant buildings. We do not need to be reminded that the Building Safety Act was passed only last year. I am at a bit of a loss as to why the Government would want to start undermining its provisions so soon, particularly since lots of buildings have not yet been made safe in the wake of the Grenfell disaster, despite that being so many years ago. I welcome the Minister’s reassurances from the Dispatch Box that those provisions would not be used in practice, but that begs the question: if they are not intended to be used, why are they included in the legislation? Again, I urge the Government to keep subsection (5) of the new clause in amendment 231.

I also want to talk a bit about Lords amendment 6, which a number of Members have already spoken about. Levelling up was meant to spark life across the whole country: not just the south-east or northern towns, but rural parts of Britain that sometimes conceal their deprivation behind a veil of beautiful greenness. Others have already highlighted this issue. I know as a rural MP that, while it is a privilege to live in a rural area, it does not come without drawbacks. Some 13% of my constituency of North Shropshire has hardly any mobile connection, and only 46% of rural businesses have a decent 4G broadband connection. There is only one bus on a Sunday, as Members will have heard me say on multiple occasions, and poor connections throughout the week mean that young people are missing out on opportunities to access further education and, critically, businesses are missing out on the skilled labour they need to thrive and expand.

As the hon. Member for St Ives (Derek Thomas) pointed out, the logistics of living in the countryside mean that council services cost more. Council taxes are up to 20% higher than in urban areas, while rural workers are paid 7.5% less on average than their urban colleagues and are faced with house prices that—if we exclude London—are often over eight times higher. Sadly, those differences were not recognised in the original drafting of the Bill. I support the concessions the Government have made in relation to amendment 6: they are taking steps in the right direction, and I think those concessions have been entered into in good faith. While I support them, I would have preferred Lords amendment 6 to have been retained in its entirety.

Finally, I will speak to Lords amendment 329, which deals with local housing. The amendment specifies that

“The local plan must identify the local nature and scale of housing need…and must make provision for sufficient social rent housing, to eliminate homelessness”

and provide a home for the more than 1 million people who are currently on social housing waiting lists. Again, the Government’s amendment in lieu is a positive step, but it does not go far enough in tackling the scourge of homelessness.

I am sure the Minister was avidly watching Liberal Democrat conference at the beginning of conference season, but I am afraid she has slightly misunderstood Lib Dem policy, which offered to deliver 150,000 social homes a year for people who are facing homelessness and temporary accommodation. However, despite our very Lib Dem debate about whether we should set targets from the bottom up or the top down, that policy also emphasised the importance of bringing the local community with us—of building those needs and requirements into the local plan and ensuring that we build the right housing in the right place, with the right infrastructure and the consent of the local community. It is a shame that the Government are criticising us for providing a way for young people to aspire to home ownership and to get people out of the terrible situation of not having a safe and secure home to go to. Amendment 329 needs to be retained in full, and we will therefore be supporting the retention of the original Lords amendment.

In conclusion, the Bill is so long and complex; it has not been a masterpiece of legislation, and there is much confusion involved in it. I urge the Minister to take on board some of the comments that have been made today by colleagues on both sides of the House, who have made some excellent recommendations and suggestions, so that we can improve the Bill a bit before it goes to its next stage.

[John Redwood]

First, I wish to address the question of housing supply in the national planning policy framework, amendment 44 and others. I support the Government in rejecting the Lords amendments—in most cases, those amendments make the Bill worse—but we need greater clarity from the Government about how the national planning policy framework and the definition of needs in any national intervention relate to what is done locally. The Minister has been a clear advocate of more devolved power, and the one power my local community would like is more power to decide how many houses we can fit in and where they could be built. That is not clear yet, and I look forward to further clarification and further documentation.

I am pleased that the five-year supply of land calculation has been amended, because that was causing considerable trouble. Wokingham Borough Council was more than hitting the five-year target, but we were constantly told by inspectors that we were not, because they calculated the numbers in a different, and we thought rather perverse, way. We never got any credit for greatly outperforming the average that we were meant to be building under the local plan, with all the difficulties that were being created by people living on many building sites in the local area.

That brings me on to the amendments and the debate, and the commentary that we have been hearing on the general issue of levelling up—the subject of the Bill—and how that relates to devolved government. I remind all parties in the House who have a fit of enthusiasm for the proposition that more devolved government will naturally lead to levelling up to look at the experience so far. They should understand that there are many occasions on which devolved powers are created or granted when levelling up does not occur or when things even go backwards. I will not argue with the decisions of the many local communities who have voted fairly in a referendum to have various types of devolved government. I am a great supporter of referenda and a great respecter of their results. I am not urging changes to the current complex structure of devolved government, but that should not stop us analysing whether it is working and whether it can be improved within its own terms and in how it operates.

--- Later in debate ---

[Greg Smith (Buckingham) (Con)]

It is always a pleasure to follow my right hon. Friend the Member for Wokingham (John Redwood), who as ever spoke with sense and clarity. I have been heavily involved with this Bill throughout its passage, not least when sitting on the Bill Committee for six months. The Bill has been materially improved as we have gone through the process. I am not saying that it is all the way there yet, but it has been materially improved along the way. I thank my hon. Friend the Minister for the time she has given me and right hon. and hon. Friends over recent days and weeks to engage on the substance of the Bill.

I start with Lords amendment 239 and the Government amendments in lieu that will remove the restrictions that have perversely persisted in the childcare system and local government for some time. I will not rehearse the arguments that were well made in the House last night in a general debate led by my hon. Friend the Member for Worcester (Mr Walker) about the supply and demand challenges in childcare, but I genuinely believe that the Government amendments in lieu will make a big difference to the provision of childcare, which presents challenges in many of our communities.

I want briefly to add my voice to the debate about Lords amendment 22 on the challenging question of virtual meetings in local government. I have said before and I maintain my position that I hate virtual meetings. I cannot stand them and would always much rather meet someone in person. However, the Bill talks much about local decision making, devolution and letting people decide, and there is overwhelming demand—the evidence from the National Association of Local Councils shows that some 90% of town and parish councils want the ability to hold virtual meetings in some way to expand the ability of people to participate—so it is beyond me why we cannot in some way permit such local decision making to take place.

[Helen Morgan]

The hon. Member is making a very good point, and I agree with him entirely. It is really important to expand the range of people who have access to becoming a local councillor. People are not paid to be a full-time councillor, so they need to be given lots of opportunities to get to meetings and participate fully. Does he agree that this is a really important point about expanding representation?

[Greg Smith]

I do agree with the fundamental principle of expanding accessibility and the ability for people to take part in local government, particularly those heroes who are completely unpaid and unremunerated for the many hours they put in to town and parish councils around the country. Like the hon. Lady, I represent an entirely rural constituency, where parishes are often quite big. To look back to my own local government days in my 20s, I was a councillor in a London borough that was smaller, at 6.1 square miles, than every parish in the 335 square miles I am lucky enough to represent today. We have to look at the distances, even within a parish, that some people have to endure to go to a planning meeting or to get their voice heard on the very local issues that their town or parish council is determining. I urge my hon. Friend the Minister to reflect on whether there is a way the Government can meet local demand for allowing, at least in part, some virtual access to local democracy.

The bulk of the Bill is about planning reform, and the lion’s share of the amendments we are considering relates to planning reform. It is a Bill that will affect every community across our entire United Kingdom, and the lens through which I look at a number of the amendments is to ask: do these amendments support, do nothing to, or hinder the so-called December compromise? That is the compromise that my right hon. Friend the Secretary of State agreed with me and a number of right hon. and hon. Friends last December, not least my right hon. Friend the Member for Chipping Barnet (Theresa Villiers) and my hon. Friend the Member for Isle of Wight (Bob Seely).

I shall start with Lords amendment 6 on the question of rural proofing. I absolutely and totally support locking into the Bill the concept of rural proofing, but there are a number of points I would ask the Minister to reflect on while making this particular commitment. Of course, anybody can say that they are going to “have regard to” anything at all. When I find myself in the supermarket with my children, I could have regard to their demand to put only chocolate, crisps and ice cream into the trolley. It does not mean that I am necessarily going to follow through on that, in my view, unreasonable demand. Much of the legislation we pass in this place can be judged upon, and under a legal challenge it is not unknown for the judiciary to look back at what was said at the Dispatch Box. I would therefore find it incredibly helpful if the Minister, in summing up, expanded a little on how the Government see that rural proofing. What are the defining principles of the rural proofing that the amendments in lieu of Lords amendment 6 talk about?

Inextricably linked to that has to be the content of the new national planning policy framework. It is a frustration that we are unable to see the final text of the NPPF until after the Bill achieves Royal Assent, not least because there are a lot of points that some of us fought hard for in the earlier stages of our consideration of the Bill that we were promised would be in the new NPPF and that will help to define this question of rural proofing. In particular, I was pleased to secure an amendment to the NPPF through the Under-Secretary of State for Levelling Up, Housing and Communities, my hon. Friend the Member for Kensington (Felicity Buchan) that explicitly changes the old language around

“best and most versatile agricultural land”

to the very tightly defined and binary question of land used in food production. That is because “best and most versatile” was always a lawyers’ paradise—a subjective test that could be argued to the nth degree. Changing the wording to protections for land used in food production makes it binary: it either is or is not. That will give clarity to planning authorities up and down the land when considering applications within our rural communities. I fear that food security is playing second fiddle to energy security when we see the vast swathes of solar applications and, likewise, the level of commercial and housing planning applications on agricultural land —on land used for food production. I include in that category 3b land, which is what most of my constituency is. It still manages to produce 10-tonne-a-hectare wheat yields, to graze cattle and sheep, and to produce the food we all like to eat.

The point I am getting to is that it is incumbent on the Government to recognise within rural proofing that rural needs to remain rural. Without farming—without agriculture, without farmers—there is no rural, because it is the farmers who maintain the landscape: it is the farmers who cut the hedges and keep our countryside as beautiful as it is. If we do not have that, there will be knock-on consequences on everything else that happens in the countryside, not least on the backbone of many rural economies: tourism. If it is not beautiful and it has all become solar farms, housing or commercial warehouses, we will not have the tourism offer either. I therefore encourage the Minister, when summing up, to reassure the House that in respect of the amendments in lieu of Lords amendment 6, rural proofing really does mean keeping the rural rural.

Turning to Lords amendment 44, I have considerable concern that when so much of the December compromise was about vesting local decisions in the hands of local authorities—in the hands of local people, where I believe decisions on planning matters absolutely should be taken, whether on housing need, commercial development or developments to do with energy security—the national development management policies are explicitly listed in the Bill as having primacy over those local decision-making mechanisms. I welcome the amendment in lieu that the Government have tabled to extend consultation to some degree; my initial preference was that the full parliamentary scrutiny lock that the Lords suggested would have been the preferable measure.

I ask the Minister and the wider Government to find a way of absolutely ensuring that when we say that local decision making is paramount, we really mean it and that there are not those get-out clauses that sometimes a statutory consultation simply cannot answer. Otherwise, we will set a dangerous precedent where people put in place their local plans and neighbourhood plans and believe that they are in control, but then a national monster—in whatever form it takes—comes along and walks all over that. The people of Buckinghamshire are all too aware of that with certain infrastructure projects being built through the county right now—I never miss an opportunity to get that in, Mr Deputy Speaker.

Oral Answers to Questions

Helen Morgan Excerpts

Monday 16th October 2023 Commons Chamber

[Michael Gove]

Absolutely. The vital role that our creative industries play across the United Kingdom in levelling up is one we need to not just protect, but enhance.

[Helen Morgan (North Shropshire) (LD)]

The delivery of local services is so important to levelling up all areas of Britain. The Secretary of State will be aware that in rural areas, the cost of delivering public services is much higher than in their urban counterparts. In rural counties such as Shropshire, for example, the cost of providing social care is much higher and the proportion of people who need that care is higher, because there are older residents. Will the Secretary of State consider taking into account the cost of providing those services when determining the local government settlement in the future?

[Michael Gove]

It is a very fair point, and absolutely, on the Government side of the House, we understand that rural communities need additional investment, not least when it comes to the cost of adult social care.

Freehold Estate Management Fees

Helen Morgan Excerpts

Thursday 13th July 2023 Westminster Hall

[Helen Morgan (North Shropshire) (LD)]

I beg to move,

That this House has considered freehold estate management fees.

It is a great pleasure to serve with you in the Chair this afternoon, Dr Huq. I am grateful to the Backbench Business Committee for granting this debate and also to the 14 MPs from across the House who enthusiastically wrote to me to support it. I suspect that the fact that they are, unfortunately, not all here is a function of its taking place on a Thursday afternoon. Like me, they have been contacted by constituents whose lives have been blighted by the often scandalous reality of unfair, unregulated estate management fees, and feel obliged to call on the Government to legislate robustly to correct this.

I will begin by outlining the crux of the problem for many freeholders in the UK who are trapped by such arrangements. It is becoming increasingly common in new housing developments for the shared areas that are built to remain unadopted by the local council. Instead, a management company takes responsibility for the shared areas outside the bricks and mortar of the owners’ homes, and the freeholders are required by law to pay annual charges for the upkeep of those areas. That could include anything, from the maintenance of garden areas to roads and footpaths. As I will come on to later in my speech, it can even include the sewerage connections of the properties in the development. Sometimes, the freeholders will also be the joint owners of the shared areas.

The commercial substance of these arrangements is that the freeholders sign up to a leasehold agreement, even if the legal form gives it a different name. It is in the nature of these agreements that the problems begin. A common practice, I found, is for brochures and contracts, or sales staff to refer to estate management charges as

“a small annual charge for grass-cutting or for the upkeep of the play area.”

In some cases, that description of the charges could not be further from the truth.

[Justin Madders (Ellesmere Port and Neston) (Lab)]

I have been pursuing this matter for some time. Indeed, I have described it as the new payment protection insurance, or PPI, because there are so many people who have been signed up to things that they did not know about. The similarities between that and the leasehold scandal are all too familiar. Does the hon. Member feel that there needs to be far greater candour and transparency from developers when they sell their properties?

[Helen Morgan]

I thank the hon. Member for his intervention and I agree with him; that is one part of the solution to this problem.

From day one, homebuyers are being fleeced by the developer, given the reality of the charges they will face, and unfortunately, because they are often first-time buyers, they do not have the experience or knowledge to delve deeper into the charges during the conveyancing process.

These charges are usually uncapped and unregulated, with no means of redress for the buyer, which can be the beginning of a spiral of problems that freeholders in this position face. A common arrangement is that the management company is a zero-profit company that simply passes the cost of maintenance work to the freeholders. However, this work is subcontracted to a profit-making company; and I am sure it will come as no surprise to hear that, in these arrangements, the subcontractor is often connected to the original developer and makes exorbitant profits. The subcontractor does that by ensuring that the cost of the maintenance work is extortionate. To add insult to injury, although the freeholders are paying for the upkeep of the communal area, or the public area, or the roads, or the street lights, they do not receive a reduction in their council tax.

A stakeholder from the Cambridge Centre for Housing And Planning Research said in an interview that the reason why the number of freehold estates with estate rent charge requirements is increasing is that local authorities are not keen to adopt all communal areas and roads on estates. But in actual fact, local authorities are being incentivised to encourage these arrangements, because they raise council tax revenue without incurring any maintenance costs.

I will provide a few examples from my constituency to demonstrate the harm that these arrangements can cause when they have not been established in good faith. I have spoken on many occasions about the Brambles development in Whitchurch in my constituency, and I will mention it again today, because the circumstances are so appalling, and I believe they could and should have been avoided. The Brambles is a development of 14 houses built in 2016 by the developer Sherwood Homes Ltd, on land for which Shropshire Council had already granted planning permission for development. It was a condition of the planning permission that the road, footpath and drainage would all be complete before the houses were occupied. Unfortunately, despite that agreement, these elements were never fully completed, but building completion certificates were issued for the properties and they were subsequently sold and inhabited.

Once a number of the houses had been occupied, the drainage system failed, which led on some days to raw sewage backing up in residents’ gardens. Sherwood Homes Ltd had not taken out the section 104 agreement required in the planning permission, and not only was the arrangement dysfunctional, but the connection to the Welsh Water sewage network was illegal. In addition, neither the road lighting nor footpath was completed.

In December 2019, Sherwood Homes Ltd went bust, and Shropshire Council could not take planning enforcement action against the company. The residents of the Brambles, who were the successors in title to the private company that was established to manage the development, had been the subject of the enforcement process. The truly shocking reality is that they have been required to accept five-figure charges on their properties to rectify the £1 million issue of connecting the drainage to Welsh Water’s network. It is also worth noting that the saga has cost the rest of Shropshire’s taxpayers a considerable amount, because council officers have expended time and effort in attempting to rectify the situation.

Had the residents not been the owners of the shared areas, they would not have been liable. Perhaps if Shropshire Council had been expecting to bear the full costs of the clear-up, it would have taken out an injunction to prevent the final homes from being sold and occupied until the drainage was rectified, or indeed ensured that, in the first place, financial bonds had been in place under the section 104 agreements and the section 106 agreement for the drainage in the road.

That is the worst example, but it is not the only one that has come to my attention. Other cases from my constituency include a developer that is charging residents extortionate fees for the maintenance of a shared ground source heat pump, but has kept the Government’s renewable heat incentive by putting it in a private company. The developer runs the management company and has failed to hold an annual general meeting or provide detailed accounts for the residents.

In another example, there appears to be a total disregard of the Companies Act 2006. In this instance, once again the drainage and road are not at an acceptable standard, and the developer claims the management company is dormant, despite having contracted limited maintenance work to a third party. It has not held an AGM, and there is no opportunity for the homeowners to challenge the arrangement. The developer ignores all correspondence, and the homeowners do not have the resources to take him to court.

The problem is not unique to North Shropshire but impacts people across the UK. Indeed, since being granted this debate, I have been contacted by freeholders from across the country who have explained that they are being fleeced by management companies, having initially been told that they would simply have to pay for the upkeep of the grass. These people find themselves in an inescapable position. For many, there is no use turning to their original conveyancing solicitor for assistance, because that solicitor was recommended to them by the developer, which offered a discount if they used that solicitor. In addition, as I have mentioned, many homeowners are first-time buyers, and starting legal proceedings retrospectively is simply out of the question on a cost basis. As a result, freeholders are left with nowhere to turn, paying extortionate fees and with their dreams of a new home shattered.

It is important to note that the cost to the resident is not only financial. A support group called HorNet has explained to me that, on top of the burden of paying the fees, homeowners often come into dispute with other members of the public, who may abuse or damage the very infrastructure, such as the play equipment, that the homeowners are paying such huge annual fees to upkeep.

[Justin Madders]

The hon. Lady raises an interesting point. Constituents have told me that people who walk their dogs on the land for which they are paying an estate management charge should not be allowed to do so, because those people have come from another estate, where they are not paying the charge. This whole model is set up to be divisive and turn communities against each other, is it not?

[Helen Morgan]

The hon. Gentleman is exactly right, and that also raises questions of liability. HorNet describes one example in which it asked the local authority to comment on whether the local authority or the freeholders would be liable if a member of the public was injured on land maintained by the freeholders—for example, by falling off the play equipment used by the public. The council responded that it did not know. There is therefore an additional level of stress for these freeholders, as well as the potentially divisive elements that the hon. Gentleman raises.

As they stand, the agreements are a bit of a legislative desert, and they are a source of incredible stress and risk for residents. Frankly, they are a bit of a money-printing machine for unscrupulous developers that seek to exploit homebuyers. What is frustrating is that the Government have on numerous occasions considered that this area of legislation desperately needs reform, yet we have made no progress to protect freeholders from the situation.

In 2017, the Government launched a consultation to tackle unfair practices in the leasehold market and promised to legislate to ensure that freeholders would be able to access rights equivalent to leaseholders’ to challenge the reasonableness of such charges. In 2018 they launched another consultation, “Implementing reforms to the leasehold system in England”, which promised that the consultation requirements and obligations of the provider of services must be provided also to freeholders and that freeholders would have the ability to challenge the reasonableness of the payments at a first-tier tribunal.

In 2019 came the Government’s second report, “Implementing reforms to the leasehold system in England”, promising equal rights for leaseholders and freeholders when it came to challenging management fees. Those consultations and reports have been encouraging. Some 76% of those asked in 2019 agreed that freeholders should have the right to challenge such fees, but we have seen no progress at all in the legislation.

It is the responsibility of the Government to honour their promises made in 2017, 2018 and 2019. In March this year, when responding to a parliamentary question from the right hon. Member for Elmet and Rothwell (Alec Shelbrooke), the Secretary of State promised to legislate on this issue “when parliamentary time allows”.

I do not think I need to make it any clearer to the Minister that the delay in legislating is directly affecting people stuck in freehold arrangements. It is unnerving to think about how much money they have been forced to pay to scandalous management companies because of those delays. From where we are today there is no end in sight for them. They are chained to these agreements. They cannot dispute the payments legally, nor sell their homes. They are truly trapped.

We have been promised by the Secretary of State that the leasehold reform Bill will be introduced after the King’s Speech. There remains an opportunity to ease the situation, as the Levelling-up and Regeneration Bill passes through the other place. Could local authorities be encouraged to ensure that there is a plan for the adoption of roads, street lights and play areas, and that either section 106 or community infrastructure levy moneys are obtained from developers to ensure that they can be upkept in the future?

Could local authorities be given clear guidance to outline where a shared management company may not be a suitable solution; how planning conditions can be used to ensure that suitable financial bonds are in place for the adoption of drainage and roads and pavements; and how injunctions should be used where a significant failure emerges on a development, such as in the case of the Brambles, which I have outlined? Will the Government bring pressure to bear on the legal sector to ensure that there is no conflict of interest when a homeowner buys a house, and outlaw sweeteners promoting the use of a connected conveyancer?

When the leasehold reform Bill is introduced, will cost-effective legal remedies be made available to homeowners already trapped in these arrangements? For example, can they be released from their obligations if annual general meetings are not held, detailed accounts not laid or competitive quotes not obtained for maintenance work? Or could those arrangements be outlawed altogether?

I know the Government are keen to resolve the issue, so I look forward to hearing the Minister’s response. I very much hope she will commit to working with MPs from across the House to ensure that our concerns are fully addressed in the leasehold reform Bill.

--- Later in debate ---

[The Minister of State, Department for Levelling Up, Housing and Communities (Rachel Maclean)]

It is a great pleasure to respond to this debate and to serve under your chairmanship, Dr Huq.

I start by thanking the hon. Member for North Shropshire (Helen Morgan) for securing this debate on an issue that she feels passionately about. Indeed, many of us feel passionately about it, and it is a testament to the persistence and determination of many colleagues in the House that we are again debating this vital issue.

As the hon. Member did during the recent Opposition day debate, she brought to the House’s attention powerful examples from her area; I think that it is particularly on the Brambles estate in Whitchurch where the current system is not working for homeowners. I am hugely frustrated at the situation that those homeowners find themselves in.

I thank my hon. Friends the Members for North East Bedfordshire (Richard Fuller) and for Buckingham (Greg Smith) for the discussions we have had about this issue and for the attention to detail they have brought to our process of scrutinising and preparing the legislation that we very much hope to introduce soon. I will come on to that shortly.

The Opposition Front-Bench spokesperson, the hon. Member for Greenwich and Woolwich (Matthew Pennycook), correctly highlighted the cross-party support on this issue. He has been supportive and constructive in his tone, both today and other occasions. I welcome that, because it makes the case for all of us to pursue the legislation and to ensure that it is brought to the House swiftly.

There was a broad consensus on the need for change. Let me use this opportunity to assure Members that fairness remains at the heart of our ambition for the housing market. We all know that we need to drive up housing supply so that we have the homes that the country needs, but while doing that, we need to ensure that buyers are getting high-quality and safe housing on modern, beautiful estates—if that is what is being built—that they can enjoy for years to come. Unfortunately, too many homeowners who bought their properties in good faith have not had their expectations met.

In the past, as Members have highlighted, it was typical for councils to adopt local infrastructure and shared spaces, but the system has changed in recent years. I recognise that on more and more estates, it is common for the shared spaces to be owned and managed by another party. The ownership of the land varies between developments. On some estates, it is owned and managed by a resident-led management company, often with the support of a managing agent, which provides expertise and services to the residents in the running of the estate. On other estates, the land is owned and managed by private management companies. Some have connections to the original developers; others are third-party companies.

It is often not down to the homeowners themselves to decide which type of management arrangement is in place on the estate. Commonly, that is set by the developer before any of the houses are sold. Either way, as has been pointed out, homeowners on these estates must pay a charge to cover the upkeep of open green spaces, roads, sewerage, drainage and other shared infrastructure, such as balancing ponds and play areas, which have been highlighted. In such circumstances, we must ensure that homeowners get a fair deal and do not end up in a vulnerable position as a result of these arrangements.

My hon. Friend the Member for Buckingham and the hon. Member for North Shropshire called for local authorities to be compelled to adopt all communal facilities on a new estate. It is worth pausing to consider why that does not happen at the moment. Our current planning arrangements exist to support new developments. When a new development is granted planning permission, the local authority can obtain section 106 planning obligations to secure a commitment from the developer. That means that the local authority does not have to adopt and maintain the land at its own expense. Local authorities no doubt take such financial considerations into account when they make these decisions, but it is up to developers and the local planning authority to agree on specific issues such as timescales for development and appropriate funding arrangements, and it is clear to me that, in a lot of cases that have been brought to our attention, that process is breaking down.

The local authority has powers to ensure that the developer builds and maintains communal facilities to the standards and quality set out in the planning permission. It is worth noting that the maintenance of communal areas, and of roads in particular, can be a significant financial burden. This is why it is right that the decision about adoption should rest with the local authority. The Department for Transport has recently issued guidance on the circumstances in which local authorities should be adopting roads. Again, I note that this can be a fraught area in some situations; I have seen that from my correspondence.

We need transparency. We need a system that consistently delivers clarity to potential purchasers and arms them with information about the arrangements for the maintenance of shared spaces on private estates. That information should be set out as part of the conveyancing process. Many already use the freehold management enquiries form, the FME1, published by the Law Society. I know that the form is used widely across the sector, but I have heard that for some buyers the information was not provided, or perhaps not drawn to their attention, at the point of purchase. That may have been the experience of some of the constituents my hon. Friends and colleagues have spoken about.

If a homeowner is unhappy with the service that they received from their conveyancer or solicitor, and the internal complaints process cannot resolve the issue, the legal ombudsman may be able to help. That needs to happen within six months of the homeowner’s final response from their conveyancer or solicitor. My hon. Friend the Member for North East Bedfordshire highlighted the issues with buying and selling homes, the process for which in England and Wales can be expensive, time-consuming and stressful. For that reason, we committed to improving the process in the levelling-up White Paper.

We have committed to work with industry to ensure that potential buyers have access to the critical information that they need in an accurate and timely format. That will help them to make an informed decision about whether to purchase a property, reducing the likelihood of the sale falling through. Some of that work is already taking place, but the Government are committed to continuing to create a fair and just housing system for everybody.

Too often, once a homeowner has moved into their home, they are asked to pay charges without an effective breakdown of what they cover. This is a matter of basic fairness and justice. Homeowners deserve to know what they are paying for on their estate. As with leaseholders, a lack of transparency, both at the homebuying stage and when people are settled in their property, leaves homeowners in an unfair and often vulnerable position.

[Helen Morgan]

That is the crux of the matter. If rogue management companies acting in bad faith do not provide that information and do not have an AGM, there is no remedy for homeowners to challenge what they are up to, or to take control of the situation. If those basic Companies Act requirements are not being fulfilled, could there be some legislative remedy for homeowners that does not involve them incurring the enormous expense of going to court? For example, could they take on the management of the company if basic Companies Act requirements are not complied with?

[Rachel Maclean]

I thank the hon. Member again for reminding us of this issue. I hope that she will bear with me, as I am coming on to our intended legislative remedy, through which we intend to drive up transparency for homeowners. Better transparency will help people to be better informed about buying a home on a managed estate and empower them to question or challenge the charges when they are billed. Alongside that, they must have better rights to challenge, as the hon. Member just said.

Freeholders on managed estates are currently at a disadvantage compared even with leaseholders, for whom the system is not perfect by a long way, regarding their ability to challenge costs and poor service. Leaseholders already have certain protections and rights that enable them to hold landlords and management companies to account, yet freehold homeowners have no such equivalent, although they may be paying for very similar services. The situation is clearly unfair, and we are committed to introducing legislation to plug the gap.

Let me come on to what we intend to do, which I am sure Members are keen to hear. We intend to create a new statutory regime for freehold homeowners based on the rights that leaseholders have. We will give homeowners the right to challenge the reasonableness of the estate management charges at the first-tier tribunal, and the right to change the provider of management services by applying to the tribunal to appoint a new manager. That will be an important power when a homeowner is unhappy with the service that they are receiving and there is a significant failure by the estate management provider in meeting its obligations.

The hon. Member for North Shropshire mentioned existing homeowner rights, which will depend on the ownership of the land and the terms of the transfer. People should seek independent advice on the options available to them. For example, if a management company is not complying with its obligations, homeowners may be able to use contract law and make an application to the county court for an injunction for specific performance. That will require the management company to comply with its obligations.

Resident-led management companies are independent companies to which residents are appointed as directors. Sometimes the articles of association, which set out how the company will run, will specify that homeowners are automatically part of the company and so can vote at the AGM. Homeowners may also be able to call extraordinary general meetings, and they can apply for an injunction for specific performance if the company is not complying with the articles of association of any management agreement. But we know we must do more, which is why we will consider introducing a right to manage for freehold homeowners. That will follow from our consideration of the Law Commission’s report and recommendations on changes to the right to manage for leaseholders.

It is not only estate management charges that need to be reasonable. As I mentioned in last week’s Westminster Hall debate, the principle must also apply to the administration fees that individual homeowners may face in their dealings with estate management companies. Therefore, we will legislate to require that all administration charges must be reasonable, which will mean that they may be challenged at the first-tier tribunal.

I want briefly to mention the Competition and Markets Authority’s house building market study.

--- Later in debate ---

[Helen Morgan]

I thank the Minister and the shadow Minister, the hon. Member for Greenwich and Woolwich (Matthew Pennycook), for their comments, and I thank the hon. Members for North East Bedfordshire (Richard Fuller) and for Buckingham (Greg Smith) for coming along for the graveyard shift on a Thursday afternoon. I also thank you, Dr Huq, for chairing the debate.

The Minister’s comments are welcome. I am particularly pleased to hear that freeholders will be given equivalent rights to leaseholders to go to the first-tier tribunal. She has heard today, as I am sure she has in other debates on the subject, that for the people who are trapped in these situations, what should have been their dream purchase—a new build home that comes ready-made, without the need for renovation or extensive work—and something they hoped would be simple has turned into a nightmare. We really cannot have legislation soon enough.

The hon. Member for Buckingham made a really good point about what should be considered standard shared areas that should be adopted by the council, and what might be considered over and above and normally subject to the arrangements we have been discussing. I agree with him and urge the Minister to consider making it mandatory for councils to adopt the things we consider to be standard—the roads, pavements and streetlights, for example. The hon. Member for North East Bedfordshire made some good, practical comments on transparency, which I certainly support. I urge the Minister to take those on board too, and to bring legislation forward as soon as possible.

Question put and agreed to.

Resolved,

That this House has considered freehold estate management fees.

New Housing: Swift Bricks

Helen Morgan Excerpts

Monday 10th July 2023 Westminster Hall

[Helen Morgan (North Shropshire) (LD)]

It is a pleasure to serve with you in the Chair, Sir Edward, and to follow such a passionate speech from the hon. Member for Witney (Robert Courts).

I, too, am a rural MP, and the benefits and protection of swifts is an issue that is incredibly important to my constituents. Indeed, one of my constituents, Sarah Gibson, is the author of a fantastic book about swifts called “Swifts and Us”. Although I have not read it yet, I have obtained a copy and I am very much looking forward to reading it. A total of 305 people from North Shropshire signed the petition, and I have received frequent casework about the topic of swift conservation and the importance of ensuring that swift bricks are included in planning regulations.

It is understandable that so many people feel passionately about this matter, because as we have heard this afternoon, swifts are incredible birds. They do everything on the wing, so they do everything while they are still in the air—sleeping, mating, bathing, all while in flight. They also eat in flight, efficiently chasing down insects while in the air. In case that is not impressive enough, they are our fastest bird in level flight and have been recorded flying at almost 70 mph. Of course, on top of that, they are beautiful. The sight and sound of them coming in and out of the eaves of buildings are, for many people, the first signs of summer. I am sure that colleagues here will agree with me that the best canvass sessions are the ones with swifts screaming over the top of our heads.

Unfortunately, the swift population is declining. The number of swifts in the UK has decreased by nearly 60% since 1995. This is yet another reminder of the rapid rate of decline of a beautiful and important species. Like many other birds, such as the house martin, swifts joined the red list for the first time in 2021. Something must be done.

I confess that before I was an MP I had not heard of a swift brick, but I have since become aware of the campaign, and they seem to me to be a fantastic solution. They offer artificial homes for swifts, which the British Trust for Ornithology has said works incredibly well for the reintroduction of swift nesting sites in areas where they have been lost. Swift bricks have been incorporated into new planning developments in both urban and rural areas over the last few years. Alongside being cheap to produce, one of the main benefits of the bricks is that they can be implemented easily into many kinds of developments.

For example, they have been installed into the rooftops above Oxford Circus and the walls of Lambeth Hospital, and in Brighton, as we have heard. In addition, one of my constituents has created a Facebook group dedicated to the protection of swifts and designed to spread information about the ease of installing artificial nesting spaces in properties, which I understand has ensured that over 100 new artificial swift nesting places have been installed to properties around North Shropshire over the last 12 months. Artificial nesting places such as swift bricks seem like a fantastic solution to a serious problem.

I am even ensured by Swift Conservation that parents eat the chicks’ droppings, meaning that there are no piles of droppings under the nests. That is surely another benefit for homeowners, who might be concerned about having artificial nesting places for swifts in their property. The benefits of swift bricks are not only that they protect these most impressive animals, but that they provide nests for other types of endangered species, including other red-listed birds such as the house sparrow, starlings and wrens, which we have already heard about. While assisting the longevity of the swift, swift bricks would also create a home for other endangered species and improve biodiversity.

There is another hurdle to swifts’ attempt for survival that lies outside habitat creation and is related to their diet. A swift’s diet consists mainly of insects, specifically flying insects, of which they can eat as many as 100,000 in one day. They include aphids, flying ants and mosquitoes. The Wildlife Trusts have raised concerns about ensuring that there are enough insects to feed an increase in swifts. The decline in insect species is a sure sign of nature being under threat in the UK. The pollution of prime feeding habitats for swifts, such as wetlands and grasslands, presents another potential barrier to swifts flourishing in the UK.

The issue is twofold. We must provide sufficient space for swifts to live, but we must also consider their need to feed by tackling the depletion of insect varieties head on. Overall, I support Members’ calls to back the mandatory use of swift bricks in all new homes and extensions. As we have heard, it could be done so easily and quickly. It could be a measure we add to the Levelling-up and Regeneration Bill, or there are opportunities in the national planning policy framework and the future homes standard, all of which we are waiting to see; they could all incorporate this important measure.

We should also stress that to support biodiversity for all bird populations, we must look at insect decline and a sufficient food supply for these impressive birds. I would therefore say to the Minister: look at planning regulations, look at the levelling-up Bill, look at the national planning policy framework and future homes standard and take this simple step to make the first move in support of these amazing birds and biodiversity the UK.

Oral Answers to Questions

Helen Morgan Excerpts

Monday 10th July 2023 Commons Chamber

[Lee Rowley]

My hon. Friend highlights an important place where further progress is needed. We recognise that there are challenges in this area, and I know that the Minister of State, Department for Levelling Up, Housing and Communities, my hon. Friend the Member for Redditch (Rachel Maclean), who is the Housing Minister, and the Secretary of State are well aware of these challenges and seeking to address them. My portfolio includes nationally significant infrastructure programmes, and we have brought forward the NSIP action plan, demonstrating our commitment to speed up projects and decisions within them as much as we can.

[Helen Morgan (North Shropshire) (LD)]

Shropshire’s Conservative-run council is trying to save £1 million a week just to balance its budget this year and restore its reserves to a safe level. Part of its problem is that the funding allocated to rural councils does not reflect the additional cost of delivering services in rural places. Will the Minister consider reassessing that allocation, so that rural councils can get the revenue they need to support the cost of the services they need to provide?

[Lee Rowley]

We are absolutely aware of the challenges that rural councils face. That is one of the reasons why we increased the rural grant within the most recent financial settlement by £10 million. Where there are pressures in local government finance in the coming years, we will continue to work with colleagues across the House to address them.