Leasehold Reform

Rachel Maclean Excerpts

Tuesday 23rd May 2023 Commons Chamber

[The Minister of State, Department for Levelling Up, Housing and Communities (Rachel Maclean)]

It is a pleasure to wind up this wide-ranging and impassioned debate on behalf of the Government. We have heard from Members across the House of the challenges inherent in the leasehold system—challenges that we are determined to tackle through further reforms in this Parliament. I am grateful to hon. Members on both sides of the House who have given powerful examples from their constituencies of leaseholders who have been hit with unfair and unreasonable costs. I pay tribute to the Father of the House, my hon. Friend the Member for Worthing West (Sir Peter Bottomley), who set out how he believes life can be made better for people in their homes. I thank him for his considerable and extensive work alongside the Leasehold Knowledge Partnership and as co-chair of the APPG on leasehold and commonhold reform. I also thank my right hon. Friend the Member for Aldridge-Brownhills (Wendy Morton) and my hon. Friend the Member for Leigh (James Grundy) for their contributions.

The examples set out by Members across the House only underscore the importance of our work to reform the leasehold sector for good and move towards a simpler, fairer, more equitable commonhold system for flats—a system that, as my hon. Friend the Minister for Local Government and Building Safety rightly asserted in opening the debate, is common around much of the rest of the world.

[Stephen Doughty]

Will the Minister give way?

[Rachel Maclean]

I do not have much time, and I have a lot to get through, so I hope the hon. Gentleman will allow me to answer the questions asked by him and his colleagues.

The first point to address is one of timing. In a sense, this debate hinges somewhat on a false premise. It hinges on media speculation—

[Matthew Pennycook]

A false promise!

[Rachel Maclean]

A false premise. It hinges on media speculation, as the hon. Member for Greenwich and Woolwich (Matthew Pennycook) set out. I want to be very clear that there has been no U-turn, as some have tried to characterise it. This is about timing. As hon. Members will know, it is a long-standing tradition of this House that Ministers cannot comment on precise timescales and details of forthcoming legislation, but I can reassure the House today that officials in my Department are working flat out to bring forward further leasehold reform.

[Several hon. Members rose—]

[Rachel Maclean]

Perhaps hon. Members would like to listen to the remarks I am about to make, because I am sure I will answer their questions.

The hon. Member for Wigan (Lisa Nandy), when she opened the debate, said that it will “take some time to phase out this archaic system.” She said—these were the words from the Opposition Front Bencher—that Labour recognises how complex this is. I think it is right to draw the House’s attention to the Labour party’s record when it was in office. I am holding a document from 1995 in which Labour promised to outlaw the feudal leasehold system, but it did nothing while it was in office. Labour has left it to the Conservative Government to fix these issues.

As hon. Members will know, in January, my right hon. Friend the Secretary of State set out his intention to bring the “outdated and feudal” leasehold system to an end. To deliver that intention, and in line with our manifesto commitments, we have embarked on a significant programme of reform to give people real control over their homes and their lives. [Interruption.] It is entirely wrong to say, as Members are chuntering from sedentary positions instead of actually listening to what is being said, that no action is being taken. Perhaps they would like to pay attention.

[Mr Kevan Jones]

On a point of order, Madam Deputy Speaker. I might be old-fashioned, but I thought that when Ministers came to the Chamber to reply, they had to reply to the debate. The Minister has thanked Members from her own Benches who have spoken, but detailed questions were asked by Members from across the House. All we are getting is a speech written by civil servants, not a response to the debate, and she is quite clearly refusing to take any interventions from my hon. Friends.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I thank the right hon. Gentleman for his point of order. Obviously I am not responsible for the Minister’s speech, but I am sure she will be referring to the contributions made by others during her winding-up speech—she is perhaps coming to that now.

I am also checking to make sure that the other Minister, the hon. Member for North East Derbyshire (Lee Rowley), will be coming back to the Chamber. I am not sure that he gave apologies for not being here for the wind-ups, but we are just checking.

[Rachel Maclean]

I wanted to thank my colleagues on the Government Benches—it is a courtesy of the House that we do so, and unfortunately, they were not thanked by the hon. Member for Greenwich and Woolwich (Matthew Pennycook). I am very grateful for all Members’ contributions, and if they will allow me, I will come on to answering their questions.

As I was saying, it is our manifesto commitment to bring to an end the outdated and feudal leasehold system. That is why we have embarked on a significant programme of reform. One issue that has been repeatedly raised in today’s debate is escalating ground rents. The Government have tackled that issue head on through our Leasehold Reform (Ground Rent) Act 2022, ensuring that people buying most new leases will not have to pay a penny in ground rents. For existing leaseholders who have already been saddled with unjustified rent hikes, we have asked the CMA to investigate such unfair terms. The CMA has secured commitments benefiting over 20,000 leaseholders, including the removal of terms that allow for the doubling of ground rents, with the charges instead reverting to original rates.

In 2021, commitments were secured from Aviva, Countryside Properties and Taylor Wimpey to return doubling ground rent terms to original rates, and from Persimmon to support leasehold house owners to buy their freehold at the original price quoted. Last year, similar commitments were secured from 15 landlords who bought freeholds from Countryside Properties, and nine companies that bought freeholds from Taylor Wimpey. A further four national developers—Crest Nicholson, Redrow, Miller Homes and Vistry—

[Several hon. Members rose—]

[Rachel Maclean]

If Members will forgive me, I am attempting to answer the questions they have already asked me, but I will give way briefly to the hon. Member for Ellesmere Port and Neston (Justin Madders).

[Justin Madders]

In her opening comments, the Minister referred to the reason why this motion has been tabled, which is media speculation that there is some backtracking from the Government’s commitments on this issue. The motion very clearly says that the Secretary of State should give an oral statement in one month’s time, and the fact that he is not here today sends a terrible message about his and the Government’s priorities. Surely, in the absence of the Secretary of State, the answer is to support the motion.

[Rachel Maclean]

If the hon. Member will allow me to answer the questions I have been asked, I will come to his points in my remarks.

We are making significant progress to afford real relief to leaseholders, which everyone in the Chamber is calling for, while reforming the system for the better. However, the questions facing leasehold tenure are not simply about money—important though those are—but also include, “Who decides?” For people living in a leasehold home today, we are going to make it easier and cheaper for them to take charge of their building, whether by taking advantage of our reforms to the right to manage or by going all the way and buying out their freeholds following our planned enfranchisement reforms. Both offer to put owners in the driving seat over the decisions that affect them.

In the case of new homes, our ground rent Act has cut off a key source of revenue for freehold landlords. Without strong economic reasons for developers to hold on to, or sell on, the freeholds of other people’s homes, we have created a powerful incentive for builders to put buyers in charge of their new homes from the outset. We know there is more to be done, which is why we are taking two key further steps on new homes.

First, we have made great strides in tackling the needless practice of selling new houses as leasehold. Our actions, including prohibiting Government programmes such as Help to Buy from funding new leasehold houses, have seen the share of new houses sold as leasehold cut from over 15% in 2016 to less than 2% today. But we are clear in our intention to go even further, which means that soon, other than in the most exceptional of circumstances, the selling of new leasehold houses will be banned altogether.

[Mr Betts]

The Minister has just made two commitments. One is banning the sale of new leasehold homes, and the other is bringing in a new process for enfranchisement. Is that a commitment to have both of those in the Bill that will be presented in this Parliament?

[Rachel Maclean]

It is a commitment that I have made from this Dispatch Box, and the hon. Gentleman has heard me say it clearly. He is an extremely experienced Member of Parliament, and he knows that it is not possible for any Minister to commit to the details of what will be in a future Bill or King’s Speech, but I am making commitments about the measures that we intend to enact.

For buyers of new flats—[Interruption.] Perhaps hon. Members would like to hear some further commitments. For buyers of new flats, we will also bring forward much-needed reforms to the commonhold system, so that flat owners and developers will finally have access to a viable alternative to leasehold. It was this Conservative Government that set up the Commonhold Council, and it has met regularly and we are working closely with it.

Several hon. Members spoke about recent reports from the Law Commission, and it is worth saying that we have been working in lockstep with the commission to ensure that our reforms are workable and deliver the outcomes we all want to see. Indeed, I take this opportunity to thank the commission for all its work in this area. It has made more than 300 recommendations for improving the leaseholder system across enfranchisement, including how valuation operates, commonhold, and the right to manage. I have no doubt that hon. Members appreciate the complexity of the reforms in this fiendishly complicated area, and it is absolutely right that we take the necessary time to ensure that they are done properly. We are unapologetic about saying that, for the sake of the owners of 5 million leasehold homes, we have to get this right, and that is what we are committed to do.

[Stephen Doughty]

I thank the Minister for giving way; she is being generous. I asked a specific question about Wales, and it is the preference of the Welsh Government that reform is brought forward on an England and Wales basis. Will she commit to doing that? Her predecessor, the right hon. and learned Member for South East Cambridgeshire (Lucy Frazer), promised that change would be coming “soon”, so why are the Government dragging their heels?

[Rachel Maclean]

I thank the hon. Gentleman for his question. He will know that we work closely with all the devolved Administrations when we bring forward legislation, and that is the right thing to do.

As hon. Members will know, it is not only leaseholders who are too often subject to unfair or outrageous practices. We should not forget the plight of freehold homeowners who pay towards shared services, such as unadopted roads, but have few rights. The Government remain committed to making estate management companies more accountable to the homeowners for whom they provide services. When parliamentary time allows, we intend to legislate to deliver these commitments, including measures that will allow homeowners the right to challenge the reasonableness of costs they have to pay. We will give them the ability to apply to the first-tier tribunal to appoint a manager to manage the provision of services.

In all aspects of this ambitious programme of reform, the Government are committed to rebalancing what has historically been a largely one-sided relationship between homeowner and landowner. We are affording peace of mind to those who have realised the dream of home ownership—something we on the Government Benches strongly support—giving them much greater control of the place where they and their loved ones sleep at night. Crucially, we are pursuing this agenda in the right way, working hand in hand with the Law Commission, the CMA and our partners across the housing sector.

[Matthew Pennycook]

I think the House is still somewhat confused as to what the Government’s position is. The Minister says there has been no U-turn, so can she confirm that it is the Government’s intention to legislate for all the recommendations that the Law Commission made in its three reports in the forthcoming leasehold reform part 2 Bill?

[Rachel Maclean]

I refer the shadow Minister to the remarks I have literally just made on that point. I repeat that we are committed to moving to a fairer, simpler and more equitable system. We are committed to the promises in our manifesto, as the Under-Secretary of State for Levelling Up, Housing and Communities, my hon. Friend the Member for North East Derbyshire (Lee Rowley), set out in his opening remarks. These promises have been repeated by previous Secretaries of State with responsibility for housing. That is our ambition, and we will work tirelessly with Members from all parts of the House to make it a reality.

[Madam Deputy Speaker (Dame Rosie Winterton)]

Before I put the Question, I am sure that the Whips Office and those on the Treasury Bench will appreciate that concern has been expressed that the Minister who opened the debate is not here for the closing speeches, and I believe attempts are being made to find out what has happened. I assure colleagues that that will be pursued. I just give a reminder for those who wish to participate in the next debate that it is important to get back in good time for the Opposition wind-up as well as for the Minister’s wind-up, and one way to achieve that is to stay for most of the debate, rather than disappearing off for long periods.

Question put.