Leaseholders and Managing Agents

Matthew Pennycook Excerpts

Tuesday 28th February 2023 Westminster Hall

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

It is a pleasure to serve with you in the Chair, Sir George. I start by declaring an interest: my wife is the joint chief executive of the Law Commission, whose work I intend to cite in my remarks.

I congratulate my hon. Friend the Member for Brent North (Barry Gardiner) on securing this really important debate. He has a long-standing interest in the matter and, in opening the debate, he made a powerful case both for regulating managing agents and reforming the leasehold system. I also thank the hon. Member for Warrington South (Andy Carter), the right hon. Member for Stevenage (Stephen McPartland) and my hon. Friends the Members for Ellesmere Port and Neston (Justin Madders) and for Poplar and Limehouse (Apsana Begum) for their excellent contributions. Above all else, they served as a valuable reminder of the scale and scope of the problem that we are considering this afternoon.

There are, of course, good managing agents who work hard to ensure that the residents they are responsible for are safe and secure and their homes properly looked after. However, the case for doing more to protect leaseholders from poor service and, indeed, exploitation at the hands of unscrupulous managing agents is as watertight as they come. We have heard numerous specific examples in this short debate of the kind of abuses that leaseholders across the country are routinely subject to by their managing agents. It is clear that relying on incremental improvement and the sharing of best practice to improve matters is simply not good enough. Government action to address those practices and improve the lives of leaseholders is necessary and long overdue.

The Government clearly recognise that there is a case for properly regulating managing agents, along with other property agents. As my hon. Friend the Member for Brent North mentioned, in 2018 the Government tasked a working group, chaired by the noble Lord Best, with bringing forward detailed recommendations on how a new regulatory framework should operate. The working group’s final report, which made a series of proportionate and sensible recommendations, was published in July 2019, yet in the intervening 43 months the Government have seemingly done nothing to implement the recommendations.

The Government’s failure to act on the recommendations has had very real consequences. The burdens that homeowners have long laboured under because of the dysfunction of the property agent market and the inherent flaws of the leasehold system have become more acute over recent years as a result of the building safety crisis and surging inflation, the combination of which has pushed many already hard-pressed leaseholders to the brink of financial ruin.

Time is short, and I will finish by touching on the issue of leasehold reform, because the deficiencies of the leasehold tenure are often the root cause of the abuse and poor service that so many homeowners experience at the hands of their managing agents. Although we may wish ultimately to go further than the Government in important respects, Labour is committed to fundamentally reforming the leasehold system, and we will support in principle any legislation that comes forward to that end. Significant reform is therefore dependent only on whether and when the Government will finally publish the second part of their legislative agenda in this area. Despite being announced two years ago, there is still no sign of a Bill.

I would therefore be grateful if the Minister could provide answers to the following questions. Will the promised second leasehold reform Bill definitely be in the King’s Speech later this year? Will the Government make available the necessary time to ensure that it receives Royal Assent before the end of the Parliament? Will the Bill include all the recommendations made by the Law Commission in its three residential leasehold and commonhold reports of 2020? Will the Government commit to ensuring that the Bill receives prelegislative scrutiny by the Select Committee, so that we get this important legislation right? I hope that the Minister can answer yes to each of those simple and straightforward questions and give concerned leaseholders watching the debate the reassurance they so desperately seek.