Leaseholders and Managing Agents

Debate between Peter Bottomley and Barry Gardiner

Tuesday 28th February 2023 Westminster Hall

[Sir Peter Bottomley (Worthing West) (Con)]

I am grateful to the hon. Gentleman for introducing this debate. May I, through him, point out that it is not just the traditional landlords, but some great charities? Wellcome went to the first-tier tribunal to get a judgment, but that decision should have been made by Parliament, not highly expensive lawyers arguing in court, given that it risked a knock-on effect on every other residential leaseholder who wants to extend their lease.

[Barry Gardiner]

I am most grateful to the Father of the House, who is also co-chair of the all-party parliamentary group on leasehold and commonhold reform, for his knowledge, his campaigning over many years and his intervention.

In the Housing Act 1974, which still related only to houses, and the Leasehold Reform, Housing and Urban Development Act 1993, which gave leaseholders the right, if more than 50% of them wished to, to purchase the freehold interest in their block, the concept of marriage value was sadly reintroduced. Marriage value has been at the heart of many of leaseholders’ problems for more than half a century, simply because the freehold title of the property is worth more to them than to anyone else by virtue of the fact that they live in it. The law allows the freeholder to benefit from that asymmetry and impose considerable extra costs on any leaseholder who wishes to purchase or extend the lease on their home. When the Government come to legislate for leasehold reform—they have promised to do so and I look forward to that—I trust that they will understand that it is that fundamental injustice that has kept leaseholders prisoner to the vagaries of their freeholder and, often, the outrageous services charges imposed by their managing agents.

Housing and Planning Bill

Debate between Peter Bottomley and Barry Gardiner

Tuesday 12th January 2016 Commons Chamber

[Sir Peter Bottomley]

(Worthing West): May I pick up the words of my hon. Friend the Member for Bromley and Chislehurst (Robert Neill) on the need for fair outcomes, and may I tie that to the excellent speech by the hon. Member for Poplar and Limehouse (Jim Fitzpatrick), with whom I co-operate on leasehold issues? His new clause 3 talks about commonhold. The Act on that of about 13 years ago did not work. I ask the Government to make sure that by the time this Bill gets considered in the House of Lords, they will put in the simple changes that will make commonhold accessible, before we even get to the point made in the hon. Gentleman’s amendment, which is to transfer all long leaseholds to commonhold.

[Barry Gardiner]

Does the hon. Gentleman agree that had commonhold been part of the conditions for developers, with all new build having to be sold as commonhold in 2002, that would have effected the step-change many of us wanted to see at the time?

[Sir Peter Bottomley]

Yes. I thank the hon. Gentleman for raising that.

Each Member of this House has on average 9,000 leasehold residential properties in their constituency; that is 15,000 constituents. In London, over half the homes owned are leasehold. Over half the homes in the Government drive for more property will be leasehold. They should be commonhold.

The scandals attached to this situation are set out in my contribution to the Queen’s Speech debate in June 2014, when I listed the kind of things that the Tchenguiz interest got involved in, when the old Peverel and Cirrus call button scandal was going on. I make this warning to those who are accumulating bunches of freeholds because they think they are going to get an extraordinary return from charges other than simple ground rent: do not expect that to be left alone by Parliament or the courts. I hope that by the time this Bill gets into the House of Lords, the Law Commission proposals on event fees can be put into legislation, rather than having to wait two or three years for another Bill to come by, and I make this point: any kind of unfair clause should be declared ineffective by the property chambers, the High Court, the Court of Appeal and the Supreme Court because for too long bad freeholders, sometimes with incompetent managing agents, have exploited leaseholders, whether previously from council homes or in the private sector.

I say to McCarthy and Stone, who have come back and may go for a flotation this year, “You try to explain why it is that so many retirement properties that come on to the second-hand market do so at a far lower value than when they were first sold.” Solicitors should warn their clients about the problem. We can solve the problem so that McCarthy and Stone, and our constituents, can have a better future.