Leasehold and Commonhold Reform

Debate between Peter Bottomley and Mark Tami

Wednesday 2nd October 2019 Westminster Hall

[Sir Peter Bottomley]

That is the sort of remark I can survive, and I am grateful for it.

I will say, as I try to in each of the debates on the issue, that I am a leaseholder of a small flat in my constituency, and with the other five leaseholders we bought the freehold. We had a good freeholder, good managing agents and we have had no problem whatsoever, and we know how the system can work. In effect, we are commonhold now, but we were originally freehold. Ground rents were low and we did not have the problem of ground rents doubling every 10 years.

We also did not have the kind of crooks, such as Martin Paine, who came in and gave informal leases, which really made a mess of people’s lives. We did not suffer from the Tchenguiz interests, which were responsible—both in the retirement field and in other fields—for some of the worst excesses. Frankly, the public authorities, such as the fraud people, the economic crimes people, the police and the Competition and Markets Authority people failed, and the Tchenguiz-controlled business got away scot free, when the people in that business should have been sent to jail and fined millions of pounds. The millions of pounds would have made up for the losses of the ordinary leaseholders who were failed by them.

I also pay tribute to Martin Boyd and Sebastian O’Kelly, chief executive and trustee of the Leasehold Knowledge Partnership, who have done so much, and they have now joined members of the National Leasehold Campaign and Bob Bessell, the former director of social services in Warwickshire, who in his retirement built 1,600 retirement homes without a single ground rent.

I thank my right hon. Friend the Minister for coming down on a fast train from Manchester, where she has given distinguished service over the past two days. I ask her to review whether it is sensible, necessary or right to allow ground rents in retirement properties. I look on the Churchill Group as the son of McCarthy and Stone, which was, with Peveril, at the foundation of some of the problems that hit previous generations. To any Treasury civil servant who reads the report of this debate, I would say that if we get leasehold and commonhold right, the value of homes will go up, not down, and the income to the Treasury will go up.

[Mark Tami (Alyn and Deeside) (Lab)]

My area has quite a few new leasehold housing estates, some of which have now been there for a number of years. The residents are being hit with a double whammy. They have all the costs associated with leasehold and they also have service management fees, which are absolutely enormous and growing. More and more people are reporting to me that they cannot sell their properties because they get partway through the process and the buyer looks at the cost and says, “No way.”

[Sir Peter Bottomley]

We are not able to cover everything in a half-hour debate, but that is one of the issues to which I think the House of Commons needs to return. We ought to have a full-day debate, preferably in Government time and on the Floor of the House, so that many other Members can speak and be a voice for their constituents.

As an example for those who do not read Private Eye on the day it comes out, there is a story about Rothesay Life, which apparently has £1.5 billion of loans. It can revalue the interest over 30 years and take it almost as instant profit. That is the kind of thing that leads people to say, “I am going to be greedy and get away with things as long as I can.”

Leasehold and Commonhold Reform

Debate between Peter Bottomley and Mark Tami

Thursday 21st December 2017 Westminster Hall

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

I beg to move,

That this House has considered leasehold and commonhold reform and leasehold abuses.

May I first say that we are grateful for your chairing the debate, Sir David? We hope that the next time we debate this issue, it will be on the Floor of the House. The all-party parliamentary group on leasehold and commonhold reform, which now has more than 130 members from both Houses, is probably one of the largest and most active all-party parliamentary groups that there is. One reason for that is that leasehold abuse is a desperate problem, which I am grateful to the Minister for recognising through his presence in the Chamber.

We have been able to be so active because of the work of two people in particular, Martin Boyd and Sebastian O’Kelly, from the Leasehold Knowledge Partnership—LKP. They also help run the good cause campaign, Better Retirement Housing, which was once known as Carlex—the Campaign Against Retirement Leasehold Exploitation. The debate will not focus primarily on the elderly, although it could, as their exploitation is a big problem. It will also not focus primarily on park homes, another form of tenure through which people can be exploited by scoundrels, crooks, rogues and those who exploit the law by making those who are badly off even worse off; through some legal stratagems, they can manage to take away the last assets that some people have.

Leasehold is a form of residential tenure that has been abolished in most places around the world and should be ended in this country. When I say this country, I basically mean England, or England and Wales; the situations in Northern Ireland and Scotland are different, and it needs to change here. That was recognised by Martin Boyd and Sebastian O’Kelly when they started asking Parliament about the plans to bring in commonhold ownership, which should have taken away half the opportunities for exploitation. It should have eliminated the problem; it would not be a question of a small fix —it would be solved.

As it happens, since Parliament passed the Commonhold and Leasehold Reform Act 2002, things have gone wrong. We have not had the growth of commonhold, which in Australia might be called strata title. The reason for that is that the responsibility for it was left with the Ministry of Justice, and of all its concerns, the condition of people living in leasehold homes was not one.

In the years since Parliament last gave serious attention to this issue, we have had a succession of Governments from both parties, and a coalition Government, and we have had Housing Ministers who I think have not been properly advised, because their officials did not actually understand the scale of the problem. At one stage, people thought there were about 2.5 million residential leasehold premises in the country. It is quite clear from the work Martin Boyd and Sebastian O’Kelly have done —with the help of Sir Nigel Shadbolt, Sir Tim Berners-Lee and the Open Data Institute, to whom I pay credit—in getting information that is publicly available and putting it together that the actual number of residential leasehold premises is between 5 and 6 million.

I do not want to get myself too involved in some figures in the Department’s announcement at one minute past midnight today. I do not think they have the number of new leasehold houses right, but that is immaterial to the debate. What matters is that what was an anomaly in the north-west—selling houses as leaseholds when they could be sold as freeholds—began to spread. To those who say that the leasehold house was sold at a lower price than the freehold house, LKP’s work shows that that is not correct. It was just a way of exploiting leaseholders, who thought that it was a normal way of taking on a home.

Of course, when the ground rent on a leasehold was a peppercorn, there was no problem at all. When it is £10 a year and doubles every 20 years, from £10, to £20, and to £40, people cannot see the problem. However, when it starts at more than £200 and doubles every 10 years, that is a 7% increase per year.

[Mark Tami (Alyn and Deeside) (Lab)]

I praise the hon. Gentleman for all the work he has done on this; I think we have moved a long way from where we started. He is absolutely right that this is a scam, and it has spread. It is not only about the ground rent issue but all the other onerous requirements. If people want to change the flooring, they have to apply and are charged a ridiculous fee. It has also spread to the management costs of looking after the ground around the premises. It is a scam, and it needs to be treated as such.

[Sir Peter Bottomley]

I think people will accept that. I ought to say that we are not trying to solve all the problems with all forms of housing in one short debate. I will try to limit my remarks and leave space for others to bring up issues, although we do not expect the Minister to answer every point today. The Government’s announcement was welcomed by most people in the field as a step forward that is less than is needed but is dramatically more than anyone had expected.

Contaminated Blood

Debate between Peter Bottomley and Mark Tami

Tuesday 25th April 2017 Commons Chamber

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

May I speak briefly in this debate? The right hon. Member for Leigh (Andy Burnham) has helped, and the Minister has rightly said that she will consider what he has said and the papers he might be able to provide. May I add that there are still victims who have unmet costs; I have one in my constituency whom I am concerned about? May I suggest that over the election period ministerial advisers pay attention to the comparisons with Hillsborough, and say that it is not just the Government-held papers that matter, but also the ones held in the health service? So, for example, if someone who has died had been told he drank too much when he did not drink seriously at all, that could be part of the evidence that comes into an inquiry.

[Mark Tami (Alyn and Deeside) (Lab)]

There people are dying, yet this goes on and on. People want closure; they know they are coming to the end of their lives, and that they will not get that closure.