Queen’s Speech

Lord Truscott Excerpts

Wednesday 11th May 2022 Lords Chamber

[Lord Truscott (Non-Afl)]

I commend the right reverend Prelate the Bishop of Guildford on his excellent and thoughtful speech.

I am very disappointed that the proposed renters reform Bill and the second stage of leasehold reform were not directly mentioned in the gracious Speech. In saying this, I declare an interest as a long-standing leaseholder and landlord. As the Minister said earlier in the debate, a renters reform Bill will nevertheless be brought forward in the current parliamentary Session, although the second stage of leasehold reform will seemingly not, despite talk of it being dealt with in the next parliamentary Session.

I hope that the leasehold reform Bill will not be kicked into the long grass and effectively dropped. I ask Her Majesty’s Government to think again and bring forward the second stage of leasehold reform in this Session as a matter of urgency. I request that the Minister clarifies the situation and treats these issues with the importance that they deserve. I commend Her Majesty’s Government and the Minister, the noble Lord, Lord Greenhalgh, on passing the ground rent Act in the last Session.

On the proposed renters reform Bill, I support the abolition of no-fault evictions by removing Section 21 of the Housing Act 1988, which has often been seen as unfair and contributes to tenants’ insecurity of tenure. However, I add three provisos. First, landlords should always be able to seek possession in the case of rent arrears. Most landlords own only one or two properties and are not Rachman-style slum landlords. They rely on rental income to pay the mortgage—if they have one—maintenance costs and service charges, and often to supplement increasingly inadequate state pensions. Secondly, many landlords are accidental landlords, or landlords for just a period of their lives. If they personally need to reoccupy their homes, they should be able to do so. The noble Lord, Lord Carrington, referred to some of these issues. Thirdly, fair rent reviews must be built into the system. Costs go up for landlords as well as tenants, and rents should at least be able to rise over time in line with the consumer price index or another appropriate measure.

It is regrettable that, in addition to a database for rogue landlords and property agents, Her Majesty’s Government are not legislating to regulate property management agents. Estate agents are legally regulated, so I see no reason why equally important property management agents are not. The 2019 recommendations of the Regulation of Property Agents working group have been ignored. Property management agents tend to fall into three categories: those managed by right to manage companies that are professional and competent; those managed by RTM companies that are wholly unprofessional and incompetent; and professional property management companies whose sole purpose seems to be to act on behalf of the freeholder and burden leaseholders with excessive costs, including extortionate commissions and overly expensive works.

The second stage of leasehold reform is well overdue. Our feudal leasehold system is precisely that: feudal, outdated and unique to England and Wales. Abuses of the system have been well documented in this House and elsewhere. The Leasehold Knowledge Partnership and the leasehold and commonhold reform APPG—I am a member of the latter—have done much valuable work on the issues facing leaseholders, of whom there are some 4.6 million in the country.

I welcome the Law Commission’s papers on exercising the right to manage and on leasehold home ownership. For those wishing to extend the length of their leases to ensure long-term tenure and preserve value, the current system is an arbitrary nightmare. As a surveyor told me recently, freeholders think of a lease extension valuation figure and double it. Surveyors and valuers then receive commission based on how much they can negotiate the lease extension figure down from an initial valuation that has no relation to market value. Again, all parties benefit apart from the leaseholder.

Abolition of so-called “marriage value” would be welcome. The proposed online calculator would also be of benefit. At last, leaseholders will be aware of the potential cost before embarking on the exercise. Her Majesty’s Government should firmly reject the specious argument made by some hedge funds that leasehold reform will imperil their human rights as property owners. If the law has to be changed to nullify this argument, it should be. In short, I look forward to the Government pressing ahead as soon as possible with legislation in this area that will offer real hope to renters and leaseholders.