Leasehold and Freehold Reform Bill

Debate between Lord Young of Cookham and Lord Gascoigne

Report stage & 3rd reading
Friday 24th May 2024 Lords Chamber

[Lord Gascoigne (Con)]

My Lords, before I start, I declare that my wife is an employee of the Crown Estate, as set out in my ministerial register of interests.

Government Amendments 1, 2, 4, 5, 6, 59, 64 and 65 are clarificatory amendments of a minor and technical nature to ensure that the Bill operates as intended. Amendments 3 and 7 give effect to the Government’s announced exemption for accepted sites on Crown land. Amendments 54, 55, 56, 57 and 58 relate to legal costs; they introduce a power to set exemptions to Clause 61 and a power to suspend the application requirement until an event set out in regulation occurs. The amendments provide for flexibility to make sensible exemptions and to recognise the position of certain landlords—those in resident-led buildings, for example.

Amendments 10, 12, 14 and 27 are minor and technical amendments relating to the application of the Bill to leaseholders holding over. Amendments 38, 39 and 41 are also minor and technical to ensure that the new valuation scheme will operate in the way it was intended. Amendments 18, 28, 42 and 43 clarify the methodology for intermediate release. Amendment 26 would clarify that there is an order of priority to Part 4 of Schedule 4. Amendment 11 relates to lease extensions and clarifies that the notional lease is granted by the person granting the extended lease. Amendment 60 and 61 correct drafting errors in Clauses 80 and 91.

These amendments are essential for the effective functioning of the Bill. I hope that noble Lords will support them. I beg to move.

[Lord Young of Cookham (Con)]

My Lords, I rise briefly to press my noble friend on Amendment 1. The Bill bans new houses being sold on leasehold, which is something I entirely support. Schedule 1 provides a rather narrow range of exemptions and Amendment 1 refers to retirement housing.

I raised in Committee a product called Homes for Life, which looks as if it may be caught by this Bill. Basically, Homes for Life enables someone who is over 60 to sell their home on the open market, then Homes for Life buys the home they want to move to and gives them a lease on that home. That enables the person to downsize and releases a useful sum of money for them. However, that product is not at the moment exempted under Schedule 1. When the Government consulted on implementing reforms to the leasehold system they concluded:

“We will provide an exemption from the ban for these financial products”.—[Official Report, Commons, 22/4/24; col. 1271.]


That included this one. I was in correspondence with the noble Baroness, Lady Scott, about this. Can my noble friend give an assurance that that product, which is useful and non-controversial, will not be banned by the Bill when it becomes an Act?

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[Lord Gascoigne (Con)]

My Lords, I thank all noble Lords for their contributions in this group. I thank my noble friends Lord Young and Lord Bailey of Paddington, and the noble Lord, Lord Truscott, for their amendments regarding forfeiture and service charge enforcement.

The upkeep and safety of buildings is paramount. Landlords, be they private companies or resident management companies, need an effective mechanism to recover unpaid debts, lest their costs fall to other leaseholders or to the detriment of the building’s upkeep. It is important to consider resident management companies in particular, which often have very limited access to other funds to cover any shortfall in the service charge fund. Having a robust and efficient way to enforce unpaid charges is therefore critical to ensure the efficiency and solvency of these resident-led companies. Equally, there are other breaches—unauthorised alterations, anti-social behaviour and use of a property for immoral purposes—that can be difficult and even impossible to remediate. In such cases, forfeiture may be the only effective way of putting a stop to the breaching behaviour. While well-intended, we do not believe that the abolition of forfeiture without a suitable replacement would ultimately serve the best interests of leaseholders, and in particular resident management companies.

My noble friend asked about progress in drafting. I hope he appreciates—it is with respect that I say this—that I do not think I am able to comment on what may happen or where that is, simply because I do not know who will be lucky enough to serve in the Government and answer that question after the election.

I turn to the amendment tabled by the noble Lord, Lord Truscott. Unfortunately, we believe that this amendment does not achieve its stated aim of protecting leaseholders, crucially against forfeiture over non-payment of service charges. The Government recognise that those home owners who pay rentcharges face the threat of forfeiture. Part 7 of the Bill already removes the risk of forfeiture for unpaid arrears of income-supporting rentcharges, since the remedy is so disproportionate to the sums owed. The Bill also contains a robust package of protections for home owners who pay estate rentcharges.

I now move to the amendment tabled by the noble Baroness, Lady Pinnock. Noble Lords will be aware that the Government do not believe that it is appropriate that many leaseholders face unregulated ground rents for no clear service in return. The Government have already legislated to put an end to ground rents for most new residential properties in England and Wales through the Leasehold Reform (Ground Rent) Act 2022. We have also encouraged work led by the Competition and Markets Authority to investigate abuses of the system, such as the mis-sold doubling ground rent leases, securing commitments from freeholders to remove these costly terms, benefitting more than 20,000 leaseholders. Given where we are in the parliamentary timetable, I hope noble Lords will understand that we cannot accept an amendment on complex new policy at this stage.

I turn to Amendments 51 and 52 in the name of my noble friend Lord Bailey. I fully agree that it is important to have effective enforcement measures in place. Amendment 51 seeks to retain criminal sanctions for failure to provide information to leaseholders in a timely manner. The existing measures, including the statutory offence under the existing Section 25 of the Landlord and Tenant Act 1985, have historically proven to be ineffective. Local housing authorities, as the enforcement body, were reluctant to bring prosecutions against landlords, and the cost and complexity of doing so were a significant barrier to leaseholders bringing a private prosecution. That is why we are replacing it with a more effective and proportionate proposal, set out in Clause 57.

Amendment 52 would require landlords to account to all leaseholders where costs were found to be unreasonable and would impose a two-month limit on repayments to leaseholders. It would introduce a power to enable the appropriate tribunal to award interest on any determination in favour of the leaseholder, where a leaseholder has made an application. While I agree that there must be a robust regime in place to challenge service charges, we do not think that this is the right approach.

Landlords may wish to compensate leaseholders by offering a credit against future service charges rather than returning money, and a leaseholder may prefer this. In addition, the Court of Appeal held in 2022 that a tribunal decision of the type to which my noble friend refers is a determination of whether the service charge is payable and not of whether it is due. Therefore, although the amendment is well-intentioned, it would not be possible to implement in the form drafted.

As I have said, I would have liked to go further, and indeed that was the intention, but we are in wash-up. With that, I hope my noble friend will withdraw his amendment.

[Lord Young of Cookham (Con)]

I am grateful to my noble friend for responding to the debate and to all those who took part, particularly my noble friends Lord Bailey and Lord Moylan for supporting my amendment on forfeiture, as well as the noble Lord, Lord Kennedy. Interestingly, we have had a debate on protecting the interests of leaseholders wedged between a series of debates on protecting the interests of freeholders.

I was a little disappointed by my noble friend’s reply, because Ministers have conceded that we have an inequity here. It is my view that, had we had a normal Report stage at the beginning of next month, the Government would have come forward with their own amendment to deal with what they conceded was an inequity. I was gently trying to find out what progress had been made with drafting a clause to deal with this, and whether sufficient progress had been made for a Private Member’s Bill to be brought forward in the next Parliament. I understand that my noble friend can make no commitments about who will be at the Dispatch Box, but it would be in the general interest, given that there is unanimity that this is a bad law and should be repealed, if we could be told that good progress had been made in government and that legislation was available. Having grumbled about that, I beg leave to withdraw my amendment.

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[Lord Gascoigne (Con)]

I thank the noble Lord, Lord Best, the noble Baroness, Lady Hayter, and my noble friends Lord Bailey of Paddington and Lord Young for their amendments, and all who have spoken in the final group of this Bill.

I will start with the amendments regarding the regulation of property agents. I thank the noble Lord, Lord Best—I appreciate he is not here—for raising the issue with the Minister recently; I know that it is something which he is passionate about, and I hope that he continues to engage extensively with the noble Baroness, Lady Scott. The Government are committed to driving up professionalism and standards among property agents. Leaseholders deserve a good service for the money they pay, whether that is from from their landlord or their managing agent, where one is in place. Industry plays an important role in driving up standards, and we welcome the ongoing work it is undertaking to support this. This includes industry-backed qualifications, as well as the preparations of codes of practice. Furthermore, the measures in the Bill, alongside existing protections in place and work being undertaken by industry, seek to make managing agents more accountable to those who pay for their services. That includes making it easier for leaseholders to take on management of their buildings themselves, where they can directly appoint or replace agents. The measures above will, I believe, contribute substantially to that objective.

In addition, we need to consider the question of standards for all property agents in the round rather than in a piecemeal fashion. That was the original purpose behind the idea of a regulator for property agents. While I recognise the intentions and desired outcomes of these amendments, I do not consider that now is the right time to introduce them.

I turn to Amendment 87. I trust that your Lordships will understand that the Government cannot accept these proposed amendments. Defining a Section 24 manager as “an accountable person” would move financial and criminal liabilities away from the existing accountable person to the Section 24 manager. It was the intent of the Building Safety Act that financial and criminal responsibility for certain aspects of maintaining the building should always remain with the accountable person and accountable persons cannot delegate this responsibility to a third party. Given these assurances, I hope that the noble Lord will withdraw his amendment and that other noble Lords will not press their amendments.

[Lord Young of Cookham (Con)]

My Lords, I am grateful to all those who took part in this decade. I want to pick up a point raised by my noble friend Lord Bailey when he moved his amendment to the Building Safety Act, a point also picked up by the noble Baroness, Lady Pinnock. Had this Bill proceeded in the normal way, there would have been a whole series of amendments to the Building Safety Act to deal with some of the problems mentioned by the noble Baroness but also to address the distinction between qualifying and non-qualifying leaseholders. I think there would have been a very good chance that we would have asked the other place to think again on a number of those issues—but that is for another day.

Yesterday, I think I had the last Oral Question and, unless something goes seriously wrong in another place, I may be the last speaker in this Parliament in this House. I take this opportunity to congratulate my noble friend Lord Gascoigne on the Front Bench. We have had a number of cricketing analogies about how he has coped with the googlies, but I prefer a footballing one. He is like the reserve goalkeeper who is summoned on to the pitch after full time and asked to save a large number of penalty kicks from some professional strikers. It is to his credit that he managed to tip most of the shots over the bar, although I think one or two may have got past him into the back of the net.

If the noble Baroness, Lady Scott, was watching his performance she will be well proud of what he did and, in thanking him, I also thank the noble Baroness, Lady Scott, whose patience I nearly exhausted with a number of meetings. On that basis, I beg leave to withdraw my amendment.

General Aviation (Persons on Board, Flight Information and Civil Penalties) Regulations 2024

Debate between Lord Young of Cookham and Lord Gascoigne

Tuesday 30th January 2024 Grand Committee

[Lord Gascoigne (Con)]

Yes, I confirm that. I sought that clarity for myself. You are correct; it is only military personnel on military flights who will be exempt.

[Lord Young of Cookham (Con)]

Could my noble friend write to me on the issue I raised about the anomaly between travelling from England to Northern Ireland and Northern Ireland back to England?

[Lord Gascoigne (Con)]

Yes, I appreciate that. I absolutely will.

To conclude, adopting these regulations will deliver significant border security benefits to Border Force and other law enforcement partners, ensuring that we have a greater awareness of all individuals intending to travel to or from the UK and that we can prevent the travel of certain individuals where it is in the public interest to do so. Therefore, I commend the regulations to the Committee once more.

Housing: New Homes Target

Debate between Lord Young of Cookham and Lord Gascoigne

Wednesday 17th January 2024 Lords Chamber

[Lord Gascoigne (Con)]

My Lords, our ambition of delivering 300,000 homes a year remains. This has always been a stretching ambition, yet there has been strong progress. The four highest rates of annual supply in over 30 years have all been since 2018, including 234,400 homes delivered in 2022-23. Increasing supply further is more difficult due to the economic challenges that we face, and we continue to engage with Homes England, developers and registered providers to understand their delivery charges.

[Lord Young of Cookham (Con)]

I am grateful to my noble friend, but those figures are based on current housing policy. Over Christmas the Government confirmed a major change in housing policy, with targets for local authorities becoming advisory not mandatory; I believe that decision was a mistake, but it has been taken. Since then, 58 local authorities have scrapped or suspended their local plans, with a view to submitting new plans with lower figures for housing. What action can the Government take to ensure that local authorities do not simply succumb to anti-development pressure and so opt out of their obligation to meet the housing shortage?

[Lord Gascoigne (Con)]

First, I congratulate my noble friend on once again campaigning on this issue and holding the Government’s feet to the fire. I have heard those figures before, and I reassure my noble friend that the revised NPPF does not allow evasion to build. Local authorities have to make provision for housing and identify sites to deliver homes, and the Levelling-up and Regeneration Act makes it clear that this is a plan-led system. That is exactly why we have recently taken intervention against seven local authorities and will consider using these powers for others that are not making sufficient progress.