Leasehold Reform

Jo Platt Excerpts

Thursday 11th July 2019 Commons Chamber

[Jo Platt (Leigh) (Lab/Co-op)]

First, I should declare an interest as I, too, am currently the owner of a leasehold property. As 66% of property transactions in Leigh now come with a leasehold, anyone would be hard-pushed to find someone in Leigh who is not affected.

I thank my hon. Friend the Member for Sheffield South East (Mr Betts) for securing this important debate. I also thank my hon. Friend the Member for Feltham and Heston (Seema Malhotra) for her work on this issue. I know that she has constituents here in the Public Gallery. I thank the all-party group on leasehold and commonhold reform and the campaigners of the National Leasehold Campaign, in particular Katie Kendrick, for their work in highlighting the scandal and for providing support to constituents all over the country. Their work has brought together the real injustices facing people who own their own home.

I represent a constituency in the north-west and the leasehold scandal is hitting our residents in particular. In 2017, 31% of house transactions in the north-west were leasehold properties, compared with a national average of 3%. In Leigh alone, more than half of all property transactions came with a leasehold. To understand the anger and sense of injustice that the residents of our towns feel, we must look at the history of how we have got to this situation today.

In our proud post-industrial towns, such as the ones that I represent, properties were often utilised by the once-dominant landowners and manufacturing industries as accommodation for workers with peppercorn rents. As our industries declined and our factories closed, those leaseholds were bought up by companies that now dominate the local property market—a feudal system of old transferred into a feudal system of the modern age. As we have heard, those freeholders set into contracts new clauses that double ground rents every few years. A peppercorn payment has turned into a sizeable rent that is hitting families across our constituencies.

This real and growing crisis has led to desperate families getting in touch with me to say that they are struggling to afford those payments, on top of their mortgage and bills. This is the important aspect of this situation: there is a real human cost. A recent survey carried out by the NLC and SOS Silence of Suicide found that spiralling bills and charges are taking their toll on people’s health and wellbeing. And why? It is all down to the fact that a loophole has been exploited and innocent families have been caught up in it based purely on where they have been brought up or where they choose to live. The scandal is also having an understandable impact on our property prices and restricting the prosperity of our towns.

Earlier this week, the shadow Housing Minister, my hon. Friend the Member for Croydon Central (Sarah Jones), pointed out that the Government have made 60 leasehold announcements since they came to power nine years ago, but have taken no action to clamp down on this injustice. I am glad that the Government recognise the crisis we in the north-west in particular are facing, but their proposals simply do not go far enough. Their proposals offer nothing to help the hundreds of families in Leigh who are already stuck in these contracts, they do nothing to help with their spiralling ground rents and they do nothing to enable homeowners to escape their leasehold trap.

That is why I fully welcome and support Labour’s announcement this week that we will not only ban new leaseholds, but cap existing ground rents at £140 per year in Leigh and enable homeowners to buy their freehold at no more than 1% of their house cost. Those are the type of bold interventions that we need if we are ever going to be serious about fixing our broken housing market. From my weekly surgeries, I know how urgently we need leasehold reform. We need a radical shake-up to get our housing market working again.