Leasehold Reform (Ground Rent) Bill [Lords]

Julian Lewis Excerpts

2nd reading
Monday 29th November 2021 Commons Chamber

[Robert Jenrick (Newark) (Con)]

It will come as no surprise to right hon. and hon. Members to hear that I strongly support the Bill. It would be surprising if I did not, as I was one of the Ministers who instigated it, although stranger things have happened in politics.

I would like to take this opportunity to thank the Minister for his hard work in bringing the Bill to the House, the noble Lord Greenhalgh who has worked extremely hard on this issue for many months, and the fantastic civil servants at the Department who have taken this forward. There is a very strong, albeit very small, team of civil servants who have been beavering away on this issue for many months and will have a lot of work to do ahead of them not just in taking the Bill forward but, perhaps more importantly, in preparing the next Bill, which I will come on to speak about in a moment.

This is an important step on the road to leasehold reform. It is a road that really began with the Leasehold Reform Act 1967, which gave tenants of houses the right to buy their freehold. It then took the next step forward with the Leasehold Reform, Housing and Urban Development Act 1993, which gave leasehold tenants of flats the right, collectively, to buy their freeholds. There was a great deal of opposition, back during the Major Government, to that reform in this House, the House of Lords and from propertied interests, who said that it would be a disaster for the housing market. It was not and those rights have been enjoyed by hundreds of thousands of people pursuing the dream of home ownership across the country. Then the last Labour Government took it forward one further step, with the Commonhold and Leasehold Reform Act 2002, which introduced commonhold, albeit not nearly as successfully as they would have hoped or as I would like to see taken forward in the years ahead.

The destination of those reforms is not just a better situation for leaseholders, but the gradual elimination of leasehold altogether. It is, as some have said here today, essentially a feudal form of tenure: a product of our rich and ancient history as a country, but one that is no longer fit for purpose. It does not exist in any other developed country and it does not, in essence, have a place in a modern society.

The Bill is, as my predecessor as Housing Secretary, the noble Lord Young, said in the House of Lords, the appetiser for the main course. It is a comprehensive piece of legislation to remove more of the iniquities of the present leasehold system, and to pave the way for the wholesale introduction of commonhold.

[Dr Julian Lewis (New Forest East) (Con)]

I am very encouraged to hear that my right hon. Friend is so forward-looking on this matter. May I ask him to explain to the House how one rather backward step took place some months ago, which was the allowing of it to become routine that additional storeys could be added to existing blocks of flats? I have lived through that experience and found not only that it is terrible to have a floor inserted above you, but that when things go horribly wrong with the construction and the company goes bust or winds itself up, it is the leaseholders who have to pay thousands upon thousands of pounds to put right the faults. Would he not like to revisit that change that was made and perhaps suggest that it ought to be looked at again?

[Robert Jenrick]

It would not be for me to revisit that even if we wanted to. The purpose of that legislation, which was supported by many Members, was to deliver more homes—particularly on brownfield sites and in urban areas—as part of the mission of us all to deliver more homes and to tackle the housing crisis, and particularly to enable individual homeowners to build upwards on their home as their household expands, particularly if they have young children or if elderly relatives move into the home. That is an important step forward, but, as with any of these changes, we should keep it under review. If there are common instances of abuse or malpractice, we should see whether there are ways to eliminate them.

[Dr Lewis]

rose—

[Robert Jenrick]

I will make progress, if my right hon. Friend does not mind.

The Bill was born out of two issues. One is a recent phenomenon, which the Front Benchers and other hon. Members have mentioned: the abuse of leasehold in recent years. A system that was never perfect and that many of us would wish to see reformed was subject to wholesale abuse and rip-off practices by developers and freeholders, who used ground rents as an income stream and escalated them, leaving leaseholders in a perilous position. Leasehold was used for properties for no good reason, purely to benefit from ground rents. We have heard about such examples, and particularly the use of ground rents for houses. It is difficult to see that any house needs to be built as a leasehold property. In different times, I have bought into the argument that there might be exceptional reasons why one would need to build such a home, but it is very difficult to think what those would be. The system is not used in other countries around the world, including in the United States, where there are gated communities, communities for the elderly—all manner of different homes. They are not being built as leasehold properties, so I do not see why they should be in this country.