Leasehold and Commonhold Reform

Debate between Jim Fitzpatrick and Mark Tami

Thursday 21st December 2017 Westminster Hall

[Jim Fitzpatrick (Poplar and Limehouse) (Lab)]

Sir David, it is a pleasure to serve under the chairmanship of a fellow West Ham United supporter; I know that you will show no favour. Your experience is very welcome here.

I am delighted to follow the hon. Member for Worthing West (Sir Peter Bottomley), and I pay tribute to him for his leadership on this issue over many years. I am proud to be his co-chair of the all-party parliamentary group on leasehold reform. I am pleased to see my right hon. Friend the Member for Wentworth and Dearne (John Healey), the shadow Secretary of State for Housing, in his place, demonstrating how seriously the Opposition take this issue. I am very pleased to see the Minister, who is highly regarded and who will take this issue forward. We are cheering from all sides of the House to give him a fair wind.

As co-chair of the all-party group, I wish to place on record my thanks to Katherine O’Riordan for her hard work for the group and for her professionalism, and to Martin Boyd and Sebastian O’Kelly of the Leasehold Knowledge Partnership, who act as our secretariat and have given us sterling support over the years, working with organisations such as the National Leasehold Campaign, which has been pushing on this issue for a long time.

I want to start by welcoming the Government’s efforts, including today’s announcement. Together with the housing White Paper, the consultation in September that led to today’s announcement, the call for evidence that the Government issued, the extra staff for the leasehold section of DCLG, more money for LEASE—despite our criticisms of the way it has operated previously—and today’s announcement all signal that the Government know there are problems. This will be the third time in recent decades that a Government will try to fix the abuses of leasehold tenure. The last two failed in 1993 and 2002. Hopefully this one will not.

However, today’s announcement must only be a start. Commonhold should be the real objective of our campaign. Although many people are clearly content with their leasehold properties, there are abuses for tens of thousands, if not hundreds of thousands, of leaseholders across England and Wales, and there are poor redress arrangements available.

[Mark Tami]

I praise my hon. Friend for all the work he has done. I very much welcome what the Government have announced, but a great number of people who already have leaseholds are affected, and it will obviously be very difficult for them to sell those properties. I know it is not easy, but we really need to get redress for those people as quickly as possible.

[Jim Fitzpatrick]

My hon. Friend puts his finger on the key point. We will be looking to the Minister for reassurance on the 5 million leaseholders who will not be covered by future regulation and legislation and many of whom are disadvantaged and are looking to the Government to address those concerns. I will come back to that later in my contribution.

According to House of Commons Library figures, my constituency has the second highest number of leasehold properties in the country. In 2016, it had the highest proportion of leasehold sales, at 97%. Only a couple of years ago, DCLG figures calculated that there were 2.3 million leasehold properties in England and Wales. Under pressure from the LKP and others, the Department adjusted that figure to 4.1 million, which is quoted often, even by the Library, as being as a more accurate figure.

However, as the hon. Member for Worthing West mentioned, the LKP now estimates that there are 6.2 million homes provided with leasehold services. That means millions of homes and homeowners are vulnerable to inflated service charges, exorbitant insurance costs, a lack of tender transparency and poor standards of work—original or repairs—as well as refusal to recognise properly constituted resident or tenant associations, mismanagement of funds and other fundamental problems. I hope that the Minister will elaborate on how today’s announcement will help to address many of those concerns.

I want briefly to focus on the post-Grenfell fire safety costs being inflicted on many leaseholders. On Monday, I asked the Secretary of State for Communities and Local Government when he made his statement on Grenfell Tower and building safety whether he could tell us how many applications for the costs of cladding replacement and fire precautions, including fire marshals, have been registered with the first-tier tribunal by landlords and freeholders. In relation to meeting the costs of building safety, he said:

“I have made it clear that I expect private sector landlords to take the lead that has been shown by housing associations and local authorities.”—[Official Report, 18 December 2017; Vol. 633, c. 784.]

That is, that leaseholders will not be charged for the costs. David Orr, the chief executive of the National Housing Association, said in correspondence today:

“As freeholders of leasehold properties, our members”—

housing associations—

“have legal responsibilities as part of their leases and are therefore legally entitled to recoup the reasonable costs through service-charges”.

That is hardly a ringing endorsement of what the Secretary of State said.

Equally, information from the first-tier tribunal shows that 17 applications have been made to it. I would be grateful if the Minister confirmed whether those were to dispense with the full section 20 consultation process or to gain prior approval, under section 27A, of the amount the landlord proposes to spend on cladding and pass on to leaseholders. Ministers have been positive in asserting that costs for removal and replacement, and so on, should be borne by the owners, freeholders and agents, but the experience on the ground may be different.

In my constituency, for the New Festival Quarter development, HomeGround, Bellway, Pinnacle, Adriatic Land 6 and Family Mosaic have informed me—after many calls and emails—that they have secured confirmation that the works costs will be met, but the cost of fire marshals, originally set at £32,000 a week plus VAT, will be met by leaseholders. That figure, after much examination and pressure, is now down to just under £20,000 a week plus VAT, but will run from October to at least February 2018, and I suspect probably longer. My question to the Minister is this: does he think it is fair that residents should pick up the tab? It is obvious from previous statements that he does not, so what further steps can they take to protect themselves? To be fair, the housing association Family Mosaic is opposed to leaseholders footing the bill, but managing agents Pinnacle are not so inclined—certainly not so far.

Can the Minister tell us how many other blocks are affected across the country? Page 74 of Dame Judith Hackitt’s interim report, published this week, says:

“In a significant proportion of buildings visited, fire and rescue services had to issue notices”.

As I understand it, these notices are known as NODs—notices of deficiencies, not alterations, enforcement or prohibition notices. Can the Minister tell us—or perhaps write to us afterwards—how many NODs there have been, and how many developments have confirmed no costs to leaseholders?

Returning to the Government announcement today, the Minister will know that Lord Justice Bean, chair of the Law Commission, issued a statement last week, saying:

“We are delighted to be able to confirm that Commissioners agreed that a project on residential leasehold and commonhold should form part of the 13th Programme and this has been approved by the Lord Chancellor.”

He goes on:

“Our project will commence with a review of leasehold enfranchisement, commonhold and managing agent regulation.”

He concludes:

“On the basis of receiving funding from the sponsoring Government Department, we expect to start work immediately.”

The question for the Government is: have they confirmed that they have the funds to carry out that fundamental job?

In conclusion, leasehold is not only well past its “sell by” date or its “best before” date; it is clearly at its “time to do something now” date. The media have woken up to the abuses. We have had more coverage of leasehold abuse in the past three to six months than we have had for the past decade. House buyers and mortgage lenders have woken up, by not buying where possible and declining to lend on many properties. The Government have reached a point where they need to be seen to be doing something, and they are. However, it is only a start. There are more than 5 million home owners now exposed and vulnerable, with more joining them in almost every new development. Urgent and fundamental reform is required. The Minister is just the chap to deliver. He has allies across the House; many he can see here today and others mentioned by the hon. Member for Worthing West. The fact that we have 130-plus members of the all-party group for leasehold and commonhold reform across both Houses demonstrates that this is a huge issue for millions of people across the country. They are looking to the Government to deliver for them. I look forward to the Minister’s response and other contributions in this debate.

Parliamentary Voting System and Constituencies Bill

Debate between Jim Fitzpatrick and Mark Tami

Monday 1st November 2010 Commons Chamber

[Mark Tami]

rose—

[Jim Fitzpatrick (Poplar and Limehouse) (Lab)]

rose—