Leasehold Reform Debate
Full Debate: Read Full DebateMarcus Jones
Main Page: Marcus Jones (Conservative - Nuneaton)Department Debates - View all Marcus Jones's debates with the Ministry of Housing, Communities and Local Government
(5 years, 1 month ago)
Commons ChamberBuying a home is the biggest single commitment that anybody will take on. In this country, 85% of people want to own their own home. We encourage people to own their own home and to make it an investment. We encourage them so that, in later life, people have security and are not reliant on the state. If we are to encourage that, we need to make sure that we are giving those people every confidence in their investment and every protection we can.
I welcome the Select Committee report. I will not go into the detail of the whole report, which would be very difficult to do in the time we have this afternoon, but I want to touch on a couple of things. Commonhold features heavily in the report. This has been available since 2002 and the take-up of it has been very small. There are lots of legal practicalities and challenges for mortgage lenders and so on. But the basic fact is that developers, particularly those developing blocks of flats, want to retain some sort of value after they have completed the development and they want to be able to profit from the value they have retained. I can understand that in certain situations, such as retirement accommodation and so on, but if we are to encourage people to go to commonhold, we will have to legislate to take away from the developer the option to retain that financial interest in the property.
I would rather go for a simpler mechanism that would basically prevent developers from continuing to hold that interest in the property so that, as soon as all the flats are developed, the freehold interest reverts to the leaseholders who buy the long lease at the outset, and that can then be managed by the leaseholders. Those would be far better arrangements and, for me, that is where most people who own leasehold property fare best.
I also want to mention the conveyancing process. I say this as somebody who acted for thousands of people buying and selling residential property over a long period. Clearly, it is the job of the conveyancer—a licensed conveyancer, a registered conveyancer or a solicitor—to protect their client and they have a duty of care to their client. In the arrangements for new developments, new developers generally have two or three solicitors on a panel of solicitors that they will recommend and, by hook or by crook, they put virtually every single person who is buying to those people. The reality is that there is a lot of pressure on those firms of solicitors to exchange contracts, to complete and to expedite matters and, within that, they are therefore not necessarily providing the best impartial service for their clients. The link between these referrals and the solicitors in the advice given to clients needs to be broken. We cannot continue with the status quo in that regard.
We need to do far more about assignment fees, notice of mortgage fees and dealing with covenants. Things must be based far more on what it costs for a freeholder or managing agent to undertake a particular process, rather than adding exorbitant fees. It is absolutely disgraceful when exorbitant fees are charged, and they always come into play right at the end of a conveyancing transaction when the managing agent has the person who is selling absolutely over a barrel.
I will quickly mention dispute resolution. I welcome the announcements that have been made about the fees on leasehold tribunals, but there needs to be a far simpler process before people get to the tribunal for leaseholders. Onerous terms of leases are also a massive problem. I am aware of several constituency cases where that has caused families a major problem.
We also need to make sure that we do not have leasehold houses; there is no necessity for leasehold houses. I know there is a cost involved, but we should move to a system where very little is provided by a managing agent and a tenant. People should get value for the council tax and we should go back to more of an estate being adopted and paid for by the local authority. People can then hold their local council to account if they are not getting what they are looking for.