Leasehold Reform (Ground Rent) Bill [Lords]

Matt Western Excerpts

2nd reading
Monday 29th November 2021 Commons Chamber

[Matt Western (Warwick and Leamington) (Lab)]

My hon. Friend is making some incredibly important points. I have parallels in my constituency, as I am sure do other Members across the House. In one example, we have a managing company, a massive social housing provider and a partnership scheme, as he describes it, and the builder. It is a big organisation, but there is no overall ownership of the issues. Residents get utterly frustrated—I am thinking about Ellie, Matt, Sarah and others. There are 200 of them in this one development and they cannot get answers from anybody because no one is really taking ownership of the problem.

[Matt Rodda]

I thank my hon. Friend for his intervention, because he shows that there is a wider issue with this type of behaviour. It is deeply worrying. These are ordinary families trying to get on with their daily lives. They want to be able to find a home of their own in a high-cost area and they are being treated in the most appalling way by an organisation that should be much more responsible. As I have said, I, my office and local councillors have been struggling to find a way of solving this problem, but we have not had much success so far and would appreciate the Minister’s help. We hope that, at some point, Housing Solutions will compensate these poor residents for the way that they have been treated and, indeed, buy them out of their properties if possible. It is absolutely appalling to live next to a haulage yard. People are constantly interrupted by noise from HGVs, driving past at all hours of the day and night. The air pollution from diesel particulates and nitrous oxide is deeply worrying. There is no way of protecting children and other vulnerable people in that situation. I am sure the whole House would agree that no one wants that for their constituents. There is also an issue with planning law that needs to be addressed, by which I mean looking at the risks from air pollution and from putting housing in close proximity to an industrial development. I would appreciate the Minister’s help with that.

Finally, let me reiterate the points made by other colleagues about the wider issue of leasehold, which is a completely out-of-date system and totally unfair to first-time buyers and other householders—whether they be young residents, people in leasehold properties for long periods of time, or, as the right hon. Member for New Forest West (Sir Desmond Swayne) said, older residents. This system should come to an end. It is a feudal system. Our country is unique in having such a system. Surely we need to end it once and for all and move on from it.

--- Later in debate ---

[Jane Hunt (Loughborough) (Con)]

I am delighted to speak in support of this Bill. I have one or two points to raise, but in general this is an excellent Bill.

For too long, many of my constituents who have realised their dream of owning their own home have been trapped in a cycle of cumbersome bureaucracy and additional, unnecessary and, frankly, unfair expenses in the form of both ground rent and service charges. Since becoming an MP, I have supported a number of these constituents, some of whom have told me that they were not clearly informed about the additional costs they were signing up to when buying their house—costs that have caused significant stress and hardship. I had hoped to provide an example, but unfortunately, all the cases are currently undergoing legal action, which only reinforces my point that change is necessary. I therefore welcome the Bill, which seeks to end these unfair practices.

[Matt Western]

I share a lot of the hon. Lady’s concerns about what her constituents are experiencing. Many thousands of new homes are being built, and constituents are frustrated and surprised when they discover that they have just bought a leasehold house. We understand that a third of leasehold properties are typically houses. Does she agree that where houses have been built as leasehold, surely the simplest thing would be to make them all freehold, and to get agreement with all the developers to reduce the cost of transfer?

[Jane Hunt]

I wonder whether that is part of the main course that is coming up. I am not sure; we will see, I suppose.

I think I got the same memo as my right hon. Friends the Members for Chipping Barnet (Theresa Villiers), and for New Forest East (Dr Lewis), as I am going to talk about retirement homes for a moment. I draw the Minister’s attention to an issue I have previously raised with him. I have been contacted by a leading developer and manager of retirement communities, which has recently completed Mill Gardens and Farnham House retirement living in my constituency. McCarthy and Stone is concerned about the impact the Bill could have on the retirement sector, following the decision not to provide it with a concession from the ban on ground rents. While it is welcome that the Bill provides for a short transition period, it does not take into account developments that were in the pipeline before the position changed, and the impact that the provisions will have on schemes that will be part-sold when the legislation comes into force.

The proposals are likely to mean that retirement developments on which building started when ground rents were expressly permitted will find themselves split, with two lease structures operating in the same building. That is likely to cause legal complexity and on-site management issues, and to complicate future apartment transactions. It could throw into doubt the financial sustainability of some communities, on the basis that the collective ground rent income on which a development’s funding was predicated will be substantially reduced, even though the development has already been built.

Furthermore, financial contributions to the development costs of communal areas, which were previously shared transparently and equitably, will become complicated, and that risks a sense of unfairness and disunity arising between residents in the same block. I wonder, therefore, whether a modest technical change could be made to the Bill to allow for developments already part-sold to complete sales, so that all apartments operate on the same basis.

I heard the points made by my right hon. Friend the Member for Newark (Robert Jenrick), the previous Secretary of State, on retirement homes and wonder whether a longer transition period for retirement homes would be better than one ending in 2023. That said, it cannot be right for buyers of new properties to face further financial demands for ground rent. House buying must be made fairer and more transparent, and freeholders and landlords must not be able to continue to amass significant profits from ground rent and, indeed, administration charges to the detriment of homeowners. The Bill is therefore an incredibly important piece of legislation that I wholeheartedly support.