British House Building Industry

Mike Amesbury Excerpts

Thursday 5th September 2019 Commons Chamber

[Sir George Howarth (Knowsley) (Lab)]

It is a pleasure to follow the hon. Member for South Norfolk (Mr Bacon), who made a typically thoughtful and interesting contribution to the debate on housing.

I congratulate my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) on her survey of the state of the market and some of the negative aspects of it that we need to address. Anybody who reads her speech in Hansard tomorrow or at some later point will consider some of the companies that she named to be a roll call of disrepute.

On that theme, I wrote to the chief executive of Redrow, the developer, about a leasehold scandal following conversations with concerned residents of Summerhill Park in my constituency. Summerhill Park has over 455 houses and 70 flats. There is a two-tier system of ground rents in operation. Residents who purchased their properties early on in the development pay ground rents of £150 a year, while those who purchased homes in the later phases pay £250 a year. My constituents want to be enfranchised. They want to purchase their freeholds and are willing to pay a fair price. They believe—and I agree with them—that a fair price would be 10 times the annual ground rent, which they think is fair and reasonable and are willing to pay. Redrow, however, is asking for 26 times the annual ground rent, which I think, frankly, is unfair and unreasonable.

In the light of the Government’s reform proposals and the Law Commission’s ongoing work on leasehold reform, I approached Redrow to arrange a meeting to discuss the residents’ ideas further. Redrow contended in its response that the lease agreements are fair and transparent, which my constituents strongly disagree with, as do I. Its business model is considered by many—including, as I am sure the Minister will confirm, the Government—both unreasonable and unjustifiable. The offer of giving residents the opportunity to purchase the freehold at a fixed price of 26 times the annual ground rent is not, in my view—and, I hope, in the Government’s view—reasonable or fair.

In response to my letter, Redrow said:

“it would be inappropriate to move away from the practice that has been adopted over the last two years, with all Redrow households, including those [who] have already acquired their freehold at Summerhill Park.”

I wrote back to say that I did not agree and I would still like a meeting. Surprise, surprise, Redrow said, “There is little point in a meeting.” All Members of this House have a reasonable expectation that if they request a meeting with an organisation or company in the private or public sector to discuss an issue that is of concern in their constituency, they will get that meeting. Redrow arrogantly—not to me, but to the people I represent—declined to hold such a meeting. I deplore that, as I hope others do.

It is unjustified and unfair, and I fail to see how pressing on with that policy is either reasonable or acceptable. Redrow is doing this simply because it can and because it can continue to make money out of the residents I represent in this House. The leasehold scandal has caused a great deal of distress for homebuyers across England, particularly in the north-west, with many homebuyers trapped in their current properties, some unable to afford to purchase their freehold and others even unable to sell their property. Redrow is not unique in this. Other developers are just as involved in this scandal.

[Mike Amesbury (Weaver Vale) (Lab)]

I have a situation in the Winnington part of my constituency of Weaver Vale, where resident Emily Martin and many others are caught in this leasehold trap. In terms of the next phase, people have benefited from the reforms that we in this place have campaigned for, and the properties then become unsellable.

[Sir George Howarth]

That adds to the unfairness of it. Redrow is not unique in this, and all these companies need to look at themselves, the business model they are adopting and the ethics involved.

I will conclude by asking the Minister three questions. First, may I invite her to join me in condemning Redrow and the other companies that are still involved in this practice? Does she agree that the freehold purchase cost of 10 times the ground rent is fair and reasonable, whereas 26 times is sheer daylight robbery? Finally, does she agree that it is desperately important that we have legislation to curtail the naked greed of those developers engaged in this disreputable practice?

--- Later in debate ---

[Ms McVey]

Companies and businesses should work towards what their purchasers and customers want. Therefore, they should be listening if they want to be the best company they can possibly be. Equally, we are listening as Members of Parliament. We have all shone a light on that bad practice and we will be taking that issue forward.

We are also looking at what housing associations are doing. My right hon. Friend the Member for Rayleigh and Wickford (Mr Francois) has brought forward what is happening with Sanctuary Housing. We have a Green Paper setting out the principles that will underpin a new fairer deal for social housing residents: safe and decent homes, swift and effective resolution of disputes, empowering residents and ensuring their voices are heard.

Although we talk about the industry, we really want to support the people who are living in those houses; we are talking about homes, safety and security. We do not want people in temporary accommodation. We do not want people to be homeless; we want them in permanent accommodation, and that can only be brought about by fixing the market and making sure we build more homes, which is what we are doing.

[Mike Amesbury]

Weaver Vale Housing Trust covers my area as well as the Minister’s. It has real concerns about the lack of clarity on funding going forward. She mentioned social housing; the key is to build more social and affordable housing. There is not clarity at present, so we are not building the numbers of homes that we need.

[Ms McVey]

We are and will be building more affordable homes. We have put in a significant amount—billions of pounds—for affordable homes and have also removed the cap so councils are able to build homes, too. That is what we have to do. We are a party that believes in choice. I come from a council house. I believed in the right to buy in the 1980s to make sure people could be in charge of their own homes. Homes were not being repaired properly. People bought them and looked after them. Now we have to make sure we build more homes, so there is a virtuous cycle and there are more homes. We are a nation that believes in home ownership. We need to enable people to have their own homes. We know that 80% of people want their own homes. What are we doing? We want to offer an array of choice and support. As my hon. Friend the Member for South Norfolk said, this is also about the ability of individuals to build their own homes.