Leasehold and Freehold Reform Bill

Richard Fuller Excerpts

2nd reading
Monday 11th December 2023 Commons Chamber

[Michael Gove]

I won’t at this stage.

I freely admit that this Bill does not go as far as some in the House and elsewhere would like. Strong arguments have been made about how property agents can be better regulated and Lord Best in another place has made arguments that I find incredibly persuasive—so why not legislate for them now? Well, as I mentioned earlier, this Bill has many clauses, deals with technical aspects of property law, requires close scrutiny and is likely to face a lobbying exercise from deep-pocketed interests outside attempting to derail it. Legislating to give effect to Lord Best’s proposals and to set up a new regulator—I am always a wee bit wary about setting up new quangos but on this occasion he makes a good case—would require significant additional legislative time of a kind we simply do not have in the lifetime of this Parliament. There are changes we are making overall in order to deal with some of the abuses for which managing agents are responsible, but there is still some unfinished business. I happily grant that, and there are organisations like FirstPort, which many of us will be familiar with from our work as constituency MPs, that require some gentle direction towards behaving in a better fashion.

[Richard Fuller (North East Bedfordshire) (Con)]

I am grateful to my right hon. Friend, my hon. Friend the Member for Redditch (Rachel Maclean) and Ministers for bringing the Bill forward. The Secretary of State spoke about leasehold improvements and improving the rights of leaseholders, but he will be aware that part 4 of the Bill looks to protect and improve the rights of families who hold the freehold of their property against the estate management charges about which he is speaking; the Bill does a lot to meet some of the requests of many of my Conservative colleagues on this matter.

One issue that is not addressed in the Bill, however, is the right to manage. In the 2019 response to the 2017 consultation, the Government said they would look at that and introduce legislation. What is the current Government thinking on giving people the right to manage, and therefore to take back control from the estate management companies?

[Michael Gove]

My hon. Friend makes a good point. I was going to say there are two other areas in particular that we should look at in Committee: the right to manage; and the abuse of forfeiture, which is sometimes used by freeholders to intimidate leaseholders. I am very open to improving the Bill in Committee; we will be improving it ourselves by bringing forward the legislation that will ban new leasehold homes in the future, so I hope we will have a chance to do that.

I mentioned earlier that we have been debating leasehold and freehold in this place for a long time. In the preparation of this Bill, one of the brilliant civil servants in the Department drew to my attention comments made by Harry Levy-Lawson, 1st Viscount Burnham and MP for St Pancras, as it happens, when the Leasehold Enfranchisement Bill 1889 was brought forward by another great reforming Conservative Government under the Marquess of Salisbury.

Freehold Estate Management Fees

Richard Fuller Excerpts

Thursday 13th July 2023 Westminster Hall

[Richard Fuller (North East Bedfordshire) (Con)]

It is a pleasure to serve under your chairmanship, Dr Huq. I congratulate the hon. Member for North Shropshire (Helen Morgan) on securing this debate and on highlighting her residents’ concerns about estate management charges. She knows that her and her residents’ concerns are not unique to Shropshire—indeed, they are nationwide. It is perhaps a sign of the momentum that this is about the third debate in recent months that we have had on this issue directly or tangentially.

It is a pleasure to see the Minister in her place. I want to put on the record that I have had a number of interactions with her on this issue over past few months. She has been extraordinarily helpful and understanding about the issues and has kept abreast of everything that is needed.

So here we are again. As the hon. Member for North Shropshire said in her opening, the issue has been around for some time. Whether one is a member of the Liberal Democrats—we will wait to hear what the Labour party has to say—or the Government, everyone has a sense that now is the time. We all understand that the power to bring the measures into law does not reside just in the Minister’s Department. It is a matter for the whole of Government to decide. I hope that those who are considering the legislative agenda for the next parliamentary Session take heed of this debate and others, because a large and growing number of people are affected by estate management charges, and homeowners recognise that they have few rights, no rights or inferior rights to challenge the charges placed on them.

Many of my constituents find that they do not understand where the charges come from. Why were they charged a particular amount for the maintenance of lamp posts? Why is it correct that they are being charged for the maintenance of a pond? Why is an estate of 1,500 houses carved into little subsections, each with their own management company? People scratch their heads and then get angry, because they see the charges mounting up but they get no response from the companies and have no forms of challenge. I re-encourage the Minister to engage with the three Rs: rights, reasonableness and redress.

First, it is important that the Government come forward with measures that place the rights of freeholders on at least the same level as those of leaseholders. That means rights to manage or self-manage, rights to complain and other rights as well. Secondly, we need to find a way to ensure that the reasonableness of the charges levied on homeowners is understood. That is difficult to undertake in practice, but measures could be introduced. There could be a code of practice between property management companies that requires a certain amount of transparency.

As I have mentioned to the Minister before, I hope that she will consider the possibility of having a national register of the charges imposed, so that people in one area of the country can see what other residents are being charged for their communal spaces. Transparency is extraordinarily helpful in any market, and I point the Minister to a recent move by the Government on pricing transparency for fuel prices. If it is good to make sure people understand that they are not being ripped off on fuel prices, surely it is also good for homeowners to know that they are not being ripped off on estate management charges.

Since the last debate on this topic, I have been contacted by even more constituents who have had estate management companies speak to their mortgage provider in an attempt to put some restriction on the rights of the homeowner to sell their home. Regardless of whether that is legitimate—maybe it is; I do not know the details of each case—it is clearly a potentially tremendous impediment to somebody seeking to sell their home if they have to go through a process of investigating whether the charges placed on them were legitimate, or if they are not able to complete their transaction in time. We really need to look at the limits on what estate management companies can challenge. If an estate management company has legitimate, unpaid fees, they should be paid—no one is questioning that—but why is it appropriate to go to the mortgage holder and not to pursue the unpaid bills through the civil courts? It seems to me to be perfectly reasonable to separate the two and not combine them into one action.

While I am on the issue of the sale and purchase of homes, will the Minister please look at the role of solicitors in advising on the sale of new homes? Often, estate management charges are for new estates. People often come and talk to the housebuilder selling the houses, and the housebuilder recommends a solicitor to them. What responsibilities does the solicitor have to advise the purchaser about the charges for which they will be liable and what their rights might be if they wish to sell their house? Some clarity and transparency on that would be helpful.

The Minister has indicated previously that she is alert to the issue of redress and understands people’s frustration at the fact that they are not able to find an efficient route to get it. I would be grateful if she could advise us on whether providing adequate redress can be achieved through non-statutory means. Is that feasible or not, and is it preferable or not? My answer is that it is not, but I would be interested in what the Minister has to say on that.

Another issue in my constituency has been the willingness of certainly one of the two local authorities in the past to slough off their responsibilities for what would normally be public services, covered by council tax, on to these new schemes of estate management charges. It really is not on for local authorities to set up a two-tier charging system, where some people in the local authority area pay once for their public services—communal areas, lamp posts, parking facilities, ponds, grass verges being mown—while another group of residents in the same local authority pay their council tax in exactly the same way as everyone else and then is stiffed with another bill for services that other people are getting covered by council tax. This two-tier system is a growing anomaly in local authority areas. We need investigation by the national Government to see what limitations might be prudent for that.

We have heard in past debates—I fear I may hear it again—the phrase “when parliamentary time allows”. Well, I’m up for it. I think other political parties are up for it. I hesitate to put words in the Minister’s mouth, but I think she is up for it as well. Parliament clearly wants to look at this issue. We want progress to be made, so it is important that we should look at it.

I do not often like to talk about specific companies, but in this instance I will. I wonder whether the Minister has had a chance to look at the tribunal decision in May 2023 between FirstPort and the residents of St David’s Square. It is an interesting judgment that was obviously conducted by someone with tremendous legal knowledge, who was able to get through the whole morass of issues and have an effective case. If the news reports are right, £479,000 in overpaid service charges were required to be paid back to the homeowners at St David’s Square, and £55,000 of the money the Government had provided in energy subsidies that had not been passed on had to be paid for. I would like to applaud the decision in that case. I do not know the details, but it seems to me to be on the right track.

It is important that we understand that if we make changes to estate management charges, we should not let companies off the hook for charges that have been imposed unfairly and excessively before the point when the legislation changes. I ask the Minister to ensure not that we pass retrospective legislation, but that legislation that changes the facility with which people can seek redress is open to people, so that they can make claims on historical excessive charges—not just charges subsequent to any legislative change. If the Government are not prepared to put that in legislation, then I would certainly table an amendment to enable my residents, who right now are being charged excessively by estate management companies, to claim that money back.

This is an important debate. It bears repeating that residents across the country, including many in my constituency, are looking to the Government to bring forward the necessary legislative change to make effective what has been promised now for six years. It is time for the Government to take the action required.

--- Later in debate ---

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

It is a pleasure to serve with you in the Chair, Dr Huq. I congratulate the hon. Member for North Shropshire (Helen Morgan) on securing this important debate, and on the well argued remarks with which she opened it. I thank the hon. Members for North East Bedfordshire (Richard Fuller), and for Buckingham (Greg Smith), for participating. In their compelling and thoughtful contributions, they highlighted, among other points, how widespread across the country problems associated with estate charges and fees are.

As in the debate last week on freehold and leasehold reform, hon. Members usefully brought the issue to life by detailing the impact of estate charges on homeowners living in developments in their constituencies. The accounts we have heard today, and many others I have heard from colleagues over recent years, illustrate vividly the abundance of problems associated with new build estate charges and fees; they are well known and well understood. They include excessive or inappropriate charges levied for minimal or even non-existent services; charges imposed for services that should, by right, be covered by council tax; charges that include costly arbitrary administration fees; charges hiked without adequate justification; and charges levied when residential freeholders are in the process of selling their property.

There is often a startling lack of transparency about what services are covered by service charges, estate charges and fees charged to long leaseholders in blocks of flats, but residential freeholders on privately owned and managed estates clearly suffer from inadequate transparency in other unique respects. As was said at the start of the debate, it appears to be fairly common for residential freeholders not to be notified of their future liability for charges early in the house buying process, and many learn of their exposure only at the point of completion. I listened with great interest to the suggestions about solicitors and conveyancers. As the Minister noted in the debate last week, even where notification of future liability is given in good time, many contracts do not specify limits or caps on charges and fees.

As the hon. Member for North East Bedfordshire said, there also appears to be a particular issue with fragmentation on privately owned and managed estates, which further exacerbates the general lack of transparency and potential for abuse in respect of charges and fees. It is not uncommon in blocks of flats, particularly older ones, for ownership and management to become fragmented over time, but on privately owned and managed estates, even relatively new ones, residential freeholders frequently have to navigate scores of management companies, each levying fees for services.

Underpinning all those issues of concern is a fundamental absence of adequate regulation or oversight of the practices of estate management companies. They are deficient in many important respects, which is one reason why fundamental and comprehensive leasehold reform is urgently required. Leaseholders have at least some protections and rights that enable them to challenge the charges and the standard of service they receive, but residential freeholders have no equivalent statutory rights.

No hon. Member in this debate has claimed that the present arrangement is not inequitable, or suggested that there is anything other than a pressing need to give residential freeholders on new build estates greater rights and protections. Indeed, I would go so far as to submit that the House appears to be of one mind on the matter.

[Richard Fuller]

The shadow Minister is making some very good points, but in the spirit of evolving the debate, I want to ask him a question. My hon. Friend the Member for Buckingham (Greg Smith) talked about council tax, and mentioned, as I did, that people are being doubled charge. If there are reforms to be made, would the hon. Gentleman favour giving residents of estates that levy estate management charges the opportunity to hand back responsibility to the local authority in any circumstances?

[Matthew Pennycook]

The hon. Gentleman pre-empts a point that I will come to later. There is an issue with local authority adoption, but if he is not satisfied with my comments, he is more than welcome to intervene on me again.

The question is not, “Should we do anything?” but “Why have no concrete steps been taken over recent years to give residential freeholders the rights and protections they clearly need?” The Government have recognised publicly for at least six years that there is a problem, and that they need to act to address it. As has been said, and as the Minister clearly understands, in their December 2017 response to the “Tackling unfair practices in the leasehold market” consultation, the Government made it clear that they intended to

“legislate to ensure that freeholders who pay charges for the maintenance of communal areas and facilities on a private or mixed use estate can access equivalent rights as leaseholders to challenge the reasonableness of service charges.”

That commitment was repeated in the Government’s June 2019 response to the “Implementing reforms to the leasehold system in England” consultation, and successive Ministers have echoed it numerous times since then in the House.

Indeed, the Minister, who has responsibility for housing and planning, has been clear in several debates this year that the Government intend to create an entirely new statutory regime for residential freeholders based on the rights that leaseholders have. That would ensure that estate management charges must be reasonably incurred, that services provided must be of an acceptable standard, and that there is a right to challenge the reasonableness of charges at the property tribunal.

Given that there are almost certainly over a million residential freeholders across the country whose lives are being blighted because the practices of estate management companies are not adequately regulated, the Opposition urge the Government to find the time, in what remains of this Parliament, to legislate for freeholders’ protection. At a minimum, that legislation should ensure equivalence between the regulation of estate charges and the regulation of leasehold service charges.

This criticism is not directed particularly at the Minister, but it is incredibly frustrating for hon. Members from across the House, and for members of the public who have a stake in a given outcome, to hear Ministers assure us time and again that long overdue legislation will be taken forward “when parliamentary time allows”, especially as the House has frequently risen early in recent months because the Government’s legislative agenda is so light. There is a strong cross-party consensus on the need for urgent legislation to tackle the problem, so let us get on and progress that legislation.

Before I conclude, I will draw three important issues to the Minister’s attention, and I ask her to address them when she responds to the debate. First, on the Opposition Benches we take the view that we need to ensure that residential freeholders can more easily take control of their estate management company or companies. To be clear, that is conceptually distinct from the reform proposals made by the Law Commission in its 2020 report on exercising the right to manage.

There are a number of ways in which residential freeholders could be empowered to take over estate management functions on any given estate, but what is important at this stage is the principle. Could the Minister assure the House that when the Government legislate, it is their intention to provide residential freeholders on privately owned estates with a statutory right to manage?

Secondly, we believe that specific measures are required to protect residential freeholders from being evicted from their home due to a failure to pay estate charges and fees—or rent charges, as they were historically known. The Government committed in 2020 to repealing section 121 of the Law of Property Act 1925, which enables this practice to continue. Can the Minister confirm that the Government remain committed to doing so when they legislate?

Thirdly—this point has been raised by several hon. Members in the debate, and the hon. Member for North East Bedfordshire challenged me on it—we feel strongly that residential freeholders deserve far more certainty about the circumstances in which communal areas and amenities on privately owned estates should be adopted by local authorities, and by water companies in the case of sewage infrastructure, and the timescales within which such adoption should take place.

Let me be clear that we sympathise with local authorities that are reluctant to adopt roads and common services of poor quality. However, some authorities refuse to adopt areas and amenities, most commonly roads, that are built to an acceptable standard unless an excessive fee is paid by the developer. There is a general need to drive up built environment standards across new build estates, so that councils do not have to pick up the long-term cost of repairing and maintaining them. However, we also need further clarity from the Government on if and when local authorities are required to take forward adoption, thereby saving residential freeholders from the type of fees that the hon. Member for North East Bedfordshire referred to in his intervention. Does the Minister agree with us on that point, and if so, can she at least give us a sense of the Government’s thinking about what steps might be taken in that regard? I very much look forward to hearing the Minister’s response to those questions, and to the debate as a whole.

--- Later in debate ---

[Rachel Maclean]

I thank the hon. Member again for reminding us of this issue. I hope that she will bear with me, as I am coming on to our intended legislative remedy, through which we intend to drive up transparency for homeowners. Better transparency will help people to be better informed about buying a home on a managed estate and empower them to question or challenge the charges when they are billed. Alongside that, they must have better rights to challenge, as the hon. Member just said.

Freeholders on managed estates are currently at a disadvantage compared even with leaseholders, for whom the system is not perfect by a long way, regarding their ability to challenge costs and poor service. Leaseholders already have certain protections and rights that enable them to hold landlords and management companies to account, yet freehold homeowners have no such equivalent, although they may be paying for very similar services. The situation is clearly unfair, and we are committed to introducing legislation to plug the gap.

Let me come on to what we intend to do, which I am sure Members are keen to hear. We intend to create a new statutory regime for freehold homeowners based on the rights that leaseholders have. We will give homeowners the right to challenge the reasonableness of the estate management charges at the first-tier tribunal, and the right to change the provider of management services by applying to the tribunal to appoint a new manager. That will be an important power when a homeowner is unhappy with the service that they are receiving and there is a significant failure by the estate management provider in meeting its obligations.

The hon. Member for North Shropshire mentioned existing homeowner rights, which will depend on the ownership of the land and the terms of the transfer. People should seek independent advice on the options available to them. For example, if a management company is not complying with its obligations, homeowners may be able to use contract law and make an application to the county court for an injunction for specific performance. That will require the management company to comply with its obligations.

Resident-led management companies are independent companies to which residents are appointed as directors. Sometimes the articles of association, which set out how the company will run, will specify that homeowners are automatically part of the company and so can vote at the AGM. Homeowners may also be able to call extraordinary general meetings, and they can apply for an injunction for specific performance if the company is not complying with the articles of association of any management agreement. But we know we must do more, which is why we will consider introducing a right to manage for freehold homeowners. That will follow from our consideration of the Law Commission’s report and recommendations on changes to the right to manage for leaseholders.

It is not only estate management charges that need to be reasonable. As I mentioned in last week’s Westminster Hall debate, the principle must also apply to the administration fees that individual homeowners may face in their dealings with estate management companies. Therefore, we will legislate to require that all administration charges must be reasonable, which will mean that they may be challenged at the first-tier tribunal.

I want briefly to mention the Competition and Markets Authority’s house building market study.

[Richard Fuller]

Before the Minister moves on from charges, I wish to make the point that I made earlier, although she may not wish to comment now. If those changes are made, is it the Government’s intention that people who have been charged excessively, or can make the case that they have been, prior to that legislative change will be provided with access to those tribunal options?

[Rachel Maclean]

My hon. Friend’s point is very much in my mind. He is right to make it—he has made it to me multiple times—because it is a very important point. While the legislation is being prepared, I cannot comment specifically on the individual measures that will be in it, but I have no doubt that when we bring it forward, he will probe and challenge every part of it. I very much hope that we can achieve a successful situation at the end of that process.

In February, the Competition and Markets Authority launched a market study on house building, as part of which it will examine the fairness of estate management fees charged for unadopted roads and amenities. It will make recommendations about policy and regulatory changes. My hon. Friend the Member for North East Bedfordshire may be interested to find out about those.

There is also an issue of redress in relation to the fit and finish of residents’ homes on new estates. Invariably, the problems are the result of inadequate quality control. People have encountered unfinished roads, half-built playgrounds and a lack of recourse to resolve those issues, all of which are unacceptable. We have been clear that new housing developments should be finished on time and to a high standard. If things go wrong, homebuyers must be treated promptly and fairly.

There are existing routes to redress, which we are strengthening through the Building Safety Act 2022. We have included a provision for a statutory new homes ombudsman, which will make developers more accountable and make it easier and simpler for new home buyers to seek redress when things go wrong. We are considering the arrangements for the statutory scheme and are working on the next steps, which we will set out in due course. In the meantime, the independent New Homes Quality Board has established the voluntary new homes ombudsman service, which launched last autumn. It can handle complaints from homebuyers about new homes built by developers that have registered, and it is 100% free for homebuyers to use.

Let me turn finally to the most important matter for hon. Members: the timing of these changes. Unfortunately, I do not have much to add to what I have already said, which is that legislation for the next Session will be set out in the King’s Speech. Everybody in the Chamber will have heard the Secretary of State and I say that it is our intention that the King’s Speech will contain a Bill that will address the issues that have rightly been raised. That remains our priority.

Fairness needs to be at the heart of the housing system. The arrangements for the upkeep of open spaces and roads on freehold estates should always be clear to potential homebuyers, and costs charged must be transparent and reasonable. Homeowners need to have access to redress when things go wrong and be empowered to hold their estate management companies to account. That is why we remain committed to legislating as soon as we can. I thank all colleagues for their consistent advocacy and campaigning on this vital issue, which, as has been said, affects a million people around the country.

Oral Answers to Questions

Richard Fuller Excerpts

Monday 10th July 2023 Commons Chamber

[Michael Gove]

The Bill, as you know, Mr Speaker, is beautifully formed, but the impact assessment that goes with it, as I pointed out earlier to my hon. Friend the Member for Christchurch (Sir Christopher Chope), needs to be read in the round to see what a great piece of legislation it is. One thing that would enable us to bring forward legislation is if the Labour party were to end its pointless opposition to our Illegal Migration Bill. It is curious that the Labour party seems keener on being on the side of people smugglers than it is on the side of the private rented sector.

[Richard Fuller (North East Bedfordshire) (Con)]

T5. The recent transfer of the administration of home equity loans from Target to Lenvi has gone appallingly badly, with my constituents reporting unanswered emails and phones that ring out with no reply when they are looking to transfer their home in a time-critical phase. Will my right hon. Friend update me on what is going on with the administration?

[Rachel Maclean]

I have been having daily meetings with Homes England and the service provider. It is the case that there have been some issues with the transfer, as my hon. Friend highlights. I want anyone listening to this to know that they can contact either their local MP or the service line, and we will resolve it. I have insisted that additional call centre staff are available and extended working hours. We are very much seeing the issues being worked through at pace now.

Freehold Management: Service Charges

Richard Fuller Excerpts

Thursday 20th April 2023 Commons Chamber

[Richard Fuller (North East Bedfordshire) (Con)]

I am grateful to the House for being able to call this debate to draw attention to the problems with the current framework of legislation and regulation covering estate management and service charges that are placed on freeholders. I do so on behalf of the thousands of homeowners in my constituency who are being charged for services that ordinarily might be covered by their council taxes, who frequently are not given easy access to the scale of charges they face and who have inferior rights of legal challenge or redress when something goes wrong. I do so to support the efforts of local councillors, especially Councillor Jim Weir, from Great Denham, in my constituency, who has done so much to draw attention to these issues, and to support the efforts of those in local resident associations, such as Tom Middleton, the chair of the New Cardington residents’ association. He has doggedly pursued estate management companies to get clarity and promote accountability. I also do so on behalf of 30 other Conservative colleagues who cannot be here today but joined me in writing to the Prime Minister to urge action. I want to put on the record my thanks to the Minister for her thoughtfulness in listening to the concerns I have raised with her ahead of this debate. I look forward to her response to some of the points I wish to make.

Let me set out a bit of the background. Freehold service charges can cover the provision of a variety of services on housing estates, such as the upkeep of play areas, communal gardens, unadopted roads and communal parking areas, such as parking courts. The requirement to make a financial contribution is most usually defined in the deed of transfer when the property is first sold by the developer. Alternatively, a liability might arise as a result of an estate rent charge that forms part of a purchase contract. The developer then usually enters a contract with a management company to organise the necessary work on the estate and to recover costs from homeowners. Sometimes the developer will set up a residents’ management company to take ownership of the communal areas. Where that happens, the residents’ management company can appoint a management company to work on its behalf. That may sound a little confusing, as it did to me as I said it. I was surprised to learn that in what one might think would be a single housing development area there can be 10, 20 or 30 individual companies handling small areas, such as little parts of roads or smaller communal areas. For my constituents, that is a confusing issue if they ever want to follow up with an inquiry. I am going to talk about some of those problems in this debate.

Based on my research, what is clear to me is that after the completion of a purchase these costs to homeowners can often increase significantly; that there is no clear or effective accountability; and that these arrangements have created a mini-industry of companies providing services of varying quality and charging often high fees, many of which relate to administration rather than to the services provided themselves. For the homeowner affected by estate management charges, these raise some pertinent issues that I know the Government are considering.

First, the notification to home buyers of their future liability for charges is not made clearly. Secondly, when bills arrive, it is often unclear what the charges relate to or why they are being applied to a particular property. Thirdly, it is often difficult for residents to obtain information about the charges, to challenge their reasonableness or to effect change when the work is being completed inadequately. Fourthly, the regulation or oversight of the practices of the management companies is very weak, creating problems for homeowners and, increasingly, creating reputational damage to many of our major housing developers, which it would be wise to address now.

It is also clear to me that the voice of homeowners is absent at a crucial stage. It is right at the start, while planning approval is going on, when the developer and the local planning authority determine who is responsible for the costs to maintain shared areas in the proposed development. In the room, there is the local authority planning authority and the developer. The people not in the room are the homeowners who will subsequently have to pay those charges. That structure means that the incentives are stacked too heavily for the developer and the local authority to stick the bill to those not represented—the homeowners themselves.

[Fiona Bruce (Congleton) (Con)]

My hon. Friend is making an excellent speech on an issue that affects many of my constituents. Does he agree that another issue is that, when the local authority is in the room at the start of a development, there should be some way of agreeing a time-bound point at which that local authority takes over, making certain the services or the facilities within some of these developments, otherwise a situation can arise whereby the residents can be responsible, for years sometimes, for covering the costs through service charges that should actually be taken over by the local authority?

[Richard Fuller]

My hon. Friend, with her great expertise in these and other matters, is absolutely right. This question of the timeframes in which certain common services might be adopted can create a number of concerns. This issue was raised for me by Councillor Phillipa Martin-Moran-Bryant, who has a number of residents affected by this issue. There is also the period of time that it can take for an estate management company to be handed over to the residents themselves. There is a double source of risk of delay, and my hon. Friend is absolutely right that the Government should consider whether there is a reasonableness in terms of the time limit that could be put in place.

[Fiona Bruce]

There is also the situation of some homeowners buying early on in a development and then finding that they are bearing charges for the subsequent development of the site or the maintenance of the site during its development, which, realistically and fairly speaking, should be borne by the developer itself.

[Richard Fuller]

I am grateful to my hon. Friend for saying that. I know the Minister will be listening, because she has been listening to all the points that I have previously made on these issues.

Just to cap the concerns, at the end of it, a person might want to sell their property. What we find increasingly is that, as they are going through the sales process, they hit a snag, because the estate management company is saying, “You haven’t paid charges.” Sometimes, they are charges that the homeowner was not even aware that they were liable for. This is the reality for many homeowners living in areas with estate management charges: they have no voice, no explanations, no transparency, no redress and, potentially, no ability to move house.

Let me give a couple of specific examples to bring those points to light for the Minister—they will largely be from my constituency, but they occur in many places. I return to Councillor Jim Weir in Great Denham, who conducted a survey to which 300 residents replied, and which identified multiple instances of excessive administrative fees. A number of my local councillors have done the same.

In one scheme, the anticipated maintenance work to be carried out and the charges for electricity comprised 30% of the total charge to the residents, while 70% of the charge was fees, reserves and overheads. In a second scheme in his ward, the anticipated maintenance was 10% of the total charge, with 90% of the charge going on fees, reserves and overheads. In a third scheme, the estate manager had just one job: the management of seven lamp posts. Jim and his team compared the costs charged per lamp post with the standard cost of the local council for doing the same job and found that the management agent is charging twice the standard rate.

When residents challenged the estate management company to see the electricity bills, they were informed that the bills could not be shared electronically and someone would have to visit the offices of the agent 170 miles away if they wanted to inspect them. One good resident said, “I’m up for that,” and that he would go and have a look. He arranged an appointment, which got cancelled and cancelled and cancelled. After more pressure from residents, the company finally admitted they did not have any electricity bills to show. No individual should have to go through that level of turmoil to try to find out something so simple about why they are being charged something in their own area. It is ludicrous.

I have a couple more examples from New Cardington of other issues relating to handovers and conflict of interest. Tom Middleton, the chair of the New Cardington Residents Association, wrote to me:

“Residential management companies (RMC) are set up by developers to look after the various open spaces not placed for adoption. The directors of the RMC are usually senior directors at the developer. This means the managing agent is effectively the developer’s client until handover. This is usually prolonged. Here in New Cardington the RMC was incorporated in July 2010, 13 years later the developers are only NOW starting the handover process. This means for 13 years residents have paid a service to an agent of some description but over which they have had no control.”

My hon. Friend the Member for Wyre Forest (Mark Garnier) has a similar problem in the Silverwoods development in Kidderminster. He cannot be here today, but he wrote to tell me:

“Multiple iterations of the estate management company has resulted in absolute opaqueness in accounting and use of funds generated, whilst failure to enforce planning conditions by Wyre Forest District Council has passed on a financial burden to rectify failures onto residents. This is not good enough.”

There is a further point about conflict of interest that, on balance, I want to make. The Association of Residential Managing Agents has 10 standards in its consumer charter, the seventh of which is, “Avoid conflicts of interest”. Concerns have been raised by the New Cardington Residents Association that their estate management company, RMG, has created a conflict of interest by establishing a wholly owned subsidiary, Osterna Ltd, to conduct annual fire risk assessment processes.

I have kindly been copied in to a letter from RMG that explains its rationale, and I am in no way asserting that there is any wrongdoing here, but it clearly changes the arm’s length nature of an estate management company hiring services if some regular services, such as fire risk assessments, go untendered to related companies. Will the Minister write to companies reminding them of their obligations and calling for greater accountability and transparency?

I will canter quickly through the history of Government reviews. In July 2017, there was a consultation on tackling unfair practices in the leasehold market. In December 2017, the Government said that they would legislate to ensure that freeholders who pay charges for the maintenance of communal areas and facilities on a private or mixed-use estate can access equivalent rights as leaseholders to challenge the reasonableness of service charges. In October 2018, the Government confirmed their intention to

“replicate consultation requirements and obligations on the provider of services to provide information to the freeholder.”

In June 2019, the Government committed to equal rights for freeholders and the right to manage for freeholders. In December 2021, the then Minister told the House:

“The Government also intends to give freeholders on private and mixed tenure estates equivalent rights to leaseholders to challenge the reasonableness of estate rentcharges, as well as a right to apply to the First-tier Tribunal to appoint a new manager to manage the provision of services. In addition, we will ensure that where a freeholder pays a rentcharge, the rentcharge owner is not able to take possession or grant a lease on the property where the rentcharge remains unpaid for a short period of time. We will translate these measures into law when parliamentary time allows.”

May I ask the Minister to confirm, first, that there has been no dilution of those commitments by the Government, and secondly, that it is the Department’s desire to include this long-promised legislative change in the next session of Parliament? I say “Department” because, of course, it is the Prime Minister who has to balance the multiple claims on parliamentary time. That is why I—along with thirty of my colleagues—wrote to the Prime Minister to ask him to include the legislation in the King’s Speech.

The Prime Minister kindly wrote back and included the following comments:

“The Government believes that it should be made clear to potential purchasers what the financial arrangements and their responsibilities are for the upkeep of communal areas. It is also important that we hold these estate management companies more accountable on how they perform and how homeowners’ money is spent.”

He went on:

“These changes will be introduced when Parliamentary time allows, and I will carefully consider your call for it to form part of our legislative session for the next Parliamentary session.”

I put on the record that I am very grateful that the Prime Minister wrote back. I hope that he understands the purpose of this debate and the calls by 30 of my Conservative colleagues, including the contribution from my hon. Friend the Member for Congleton (Fiona Bruce). It is the time for the Prime Minister to take the action that has been promised for so long. We know that the issues preceded his time, but he has a great capacity for understanding problems and finding solutions. We are close—I think the Minister will be clear that the Department is ready to move—and I hope that the Prime Minister will take further consideration and action to help my constituents and those in many other places around the country.

Oral Answers to Questions

Richard Fuller Excerpts

Monday 27th March 2023 Commons Chamber

[Michael Gove]

North West Leicestershire is one of a number of local authorities with which we are working. The affordable homes programme and, indeed, the ability to use right-to-buy receipts are critical to making sure that we deliver the social homes the country needs.

[Richard Fuller (North East Bedfordshire) (Con)]

2. If he will make an assessment with Cabinet colleagues of the potential merits of updating the report on the Cambridge-Milton Keynes-Oxford growth arc published by the National Infrastructure Commission in 2017.

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

The Government completed a 12-week public consultation gathering views to shape a vision for an Oxford-Cambridge arc spatial framework. We are currently considering the responses to that consultation and will provide more information in due course.

[Richard Fuller]

Over the past decade, housing growth in Bedfordshire has been two and a half times the national average, with acute pressures on our GPs, dentists and other local services. Today’s progress review by the National Infrastructure Commission confirmed what many of us have always known—namely, that East West Rail is an excuse for even greater housing development in Bedfordshire and the region. Will my hon. Friend please meet me and ensure that we do not progress housing growth in the Ox-Cam arc before the shortages in services are settled?

[Rachel Maclean]

I thank my hon. Friend for raising the concerns of his constituents, which are shared by many communities. We know how important it is that infrastructure is delivered alongside housing growth. That is why, through the Levelling-up and Regeneration Bill, we will require local authorities to produce an infrastructure strategy as part of the infrastructure levy. I would be delighted to meet my hon. Friend to discuss it further.

Oral Answers to Questions

Richard Fuller Excerpts

Monday 9th January 2023 Commons Chamber

[Mark Menzies (Fylde) (Con)]

4. Whether his Department is taking steps to reform the leasehold system.

[Richard Fuller (North East Bedfordshire) (Con)]

6. If he will bring forward legislative proposals to give freeholders rights to directly challenge management and service charges equivalent to those of leaseholders.

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

The Government are committed to building on the Leasehold Reform (Ground Rent) Act 2022 and delivering the second phase of our major two-part leasehold reform programme within this Parliament. This will make it easier for leaseholders to purchase their freeholds and will establish greater fairness between those parties.

--- Later in debate ---

[Lucy Frazer]

I can give my hon. Friend assurance that the many measures we will bring in will affect not only new purchasers but existing leaseholders. We will be bringing forward legislation later in this Parliament.

[Richard Fuller]

In my constituency, Councillor Weir of Great Denham, Councillor Gallagher of Shortstown and Councillor Dixon of Stotfold are leading efforts on behalf of local residents who own a freehold property to challenge excessive fees, lack of transparency and poor service by estate management companies. Will the Minister review the terms of reference of the property ombudsman to make it easier for homeowners—freeholders—to challenge these unfair practices?

[Lucy Frazer]

My hon. Friend is right to highlight unfairness in relation to freeholders. Estate management companies must be more accountable to homeowners on how money is spent to maintain privately managed estates. We will be giving freehold owners on these estates new rights to challenge costs and appoint a manager, as well as requiring private estate management companies to join a redress scheme.

Levelling-up and Regeneration Bill

Richard Fuller Excerpts

Report stage
Tuesday 13th December 2022 Commons Chamber

[Lucy Frazer]

I know that my right hon. Friend is very interested in these issues and is conscious of beauty and the importance for us to maintain that. Of course local authorities will be able to take their local decisions on those matters that concern them.

[Richard Fuller (North East Bedfordshire) (Con)]

I am pleased to hear what the Minister is saying about improving the efficiency of the process. She will know that my amendment 75 talks about the fact that the guards are down for local authorities when their local plan is in abeyance. That was brought into sharp relief in the village of Harrold. It was only thanks to local councillor Alison Field Foster and the local parish council that development could be stopped. Is what the Minister is saying today going to close that gap to make my amendment unnecessary, or will there still be a liability for local authorities under her plan?

[Lucy Frazer]

I have studied carefully my hon. Friend’s amendments, which are all on interesting points. We do not think that there is a need for those amendments, because there are provisions in the Bill to ensure that local communities can make decisions to protect local communities.

--- Later in debate ---

[Richard Fuller]

I thank the Minister for reaching out and having conversations with colleagues. The pace of housing development and the consequential pressure on access to public services is one of the most important, and certainly one of the most frequent, issues raised with me by constituents. Context is important. The people of Bedfordshire are not against new housing—indeed, in my constituency we are doing our fair share and a lot more besides, with three to five times the national average of growth—but what local people most want from the Bill is greater local control over the siting and type of new developments, an avoidance of growth that is too rapid and, most of all, improvements to public services such as GPs and school places before there are additional large-scale housing developments. I seek changes to the Bill to achieve those ends, although I recognise from what the Minister said that the Bill is making some progress on all of those fronts.

Amendment 75 seeks to close the loophole that developers use to get around delays in local plans to secure unwanted developments. Amendment 74 seeks to include specific goals regarding net zero, biodiversity, the circular economy and recycling in neighbourhood plans. New clause 87 seeks to provide specific assistance via regulation for listed buildings where there is a wish to insulate or make other changes to the properties consistent with net zero goals. Finally, amendment 76 seeks to implement the manifesto commitment of infrastructure first to improve access to local services.

On amendment 75, good people play by not just the letter but the spirit of the rules. Right after becoming the Member of Parliament for North East Bedfordshire, I was made aware of a loophole in planning law that was being exploited by developers to obtain permission for developments not wanted by local people while a local plan confirmation is in abeyance. The amendment seeks to close that loophole.

I tabled amendment 74 because I am very concerned that Parliament has set a legal requirement to achieve net zero without properly assessing the methodologies or potential costs to taxpayers and consumers for achieving it. I am concerned that the technologies that we need are still evolving and that lowering the overall cost may take action on a community level rather than an individual level through, for example, charging points for electric vehicles or decarbonising home heat. The amendment would require neighbourhood plans to include considerations of three issues important to our natural environment: achieving net zero, promoting and increasing local biodiversity and improving levels of recycling.

New clause 87 is on listed properties. At my local surgery sessions, I have met a number of residents who live in listed buildings and are really concerned that restrictions stop them from insulating their homes or making other changes that might be needed to comply with future legislation. The new clause would place a requirement on the Secretary of State to make regulations making it easier for owners of residential listed buildings to improve the energy efficiency of their buildings and, importantly, place requirements on Historic England to be supportive of such measures and efforts taken by residents.

Finally, amendment 76 is on the Conservative manifesto commitment. I was pleased to see our manifesto commitment to infrastructure first and to listen to what the Minister has said today and in earlier stages of the Bill about the progress that we are making. However, I want to be sure that there is sufficient progress, particularly with regard to the pressure on GP services and school places. I am hopeful that, in summing up, the Minister will talk further and in more detail about how measures in the Bill will deliver on the Conservative manifesto commitment for infrastructure first.

Through a combination of ensuring that we have local control over how housing is developed, a further, deeper commitment at a community level to understanding the practical changes that need to be made to achieve our net zero goals—things like equitable insulation for homes—and to achieve local transportation methods that are green and clean, there are great opportunities in the Bill. I look forward to hearing the Minister’s comments.

[Several hon. Members rose—]

Oral Answers to Questions

Richard Fuller Excerpts

Monday 16th May 2022 Commons Chamber

[Kemi Badenoch]

I remind the hon. Gentleman that the reason we have had such difficulties in local government spending is the terrible state of public finances that this Government found when they came into power 10 years ago. It is only because of the hard work that we have done over the last decade to repair the public finances that we have been able to provide additional funding for local government.

[Richard Fuller (North East Bedfordshire) (Con)]

11. What recent progress he has made in delivering an “infrastructure first” approach for planning and house building.

[The Minister for Housing (Stuart Andrew)]

This is essential to our planning reforms. The Levelling-up and Regeneration Bill introduces a new infrastructure levy. It will ensure that developers contribute funding for infrastructure such as schools, GP surgeries and new roads, and it will give local authorities control over how that is provided to best meet the needs of local people and development.

[Richard Fuller]

Can I encourage the Minister in his push for an “infrastructure first” approach with an example from my constituency? Quite a few years ago, a developer in the village of Biddenham proposed that a GP surgery be located there, and gave some land for it. It was to bring in patients from Biddenham and the neighbouring village of Bromham. All the houses have been built, but no part of that new GP surgery has been built. The good news is that the building will start later this year, but can the Minister assure me that the problem regarding the interactions between the clinical commissioning group, Bedford Borough Council, NHS Estates, GPs, the developer and the builder will be cleared up? No one is to blame, but I bet that if he had already introduced “infrastructure first”, we would have that GP surgery today.

[Stuart Andrew]

I completely agree with my hon. Friend. Councils, health bodies and everybody else need to get much better at this. Local planning authorities and CCGs should work together to provide the planned provision. Under our new levy, councils will be able to borrow against future levy receipts to forward-fund the infrastructure that is needed. I am arranging meetings with colleagues in the Department of Health and Social Care to discuss the very issue that he brings to our attention.

General Practice: Large Housing Developments

Richard Fuller Excerpts

Tuesday 29th March 2022 Westminster Hall

[Richard Fuller (North East Bedfordshire) (Con)]

It is a pleasure to serve under your chairmanship, Mr Dowd. I congratulate my county colleague and hon. Friend the Member for South West Bedfordshire (Andrew Selous) on securing the debate. He will know that this is a particular issue for Bedfordshire.

In my own constituency over the course of the last decade, the town of Biggleswade, the village of Stotfold and the newly parished area of Fairfield Park have been dramatically transformed by housing growth. In many instances, that has created very welcome, happy communities and neighbourhoods for people, which have grown and become a natural part of the environment; but we cannot ignore the pace of growth and the impact that it has had on those residents new to the area, and on the existing residents who have accepted the additional growth in their areas.

Two issues make for happy communities. First, is the pace of growth sustainable and are the services there that people come to expect from the Government, in terms of school places and, as we are discussing today, of GPs?

My constituency is growing at a rate of about five times the national average. Between 2015 and 2020, the population of this country grew by about 1.9 million people. If all constituencies grew at the same pace as mine, there would be over 5 million new people in this country. I ask the Minister, when it comes to housing, could we please consider an absolute cap on what local communities are expected to have in any long period of time? If we do not have that pressure against market forces, I fear that we are building some concerns for the future.

I know that Conservative colleagues—replete in their number here today—have a large number of questions about planning reforms. I would just say this to the Minister. The previous Secretary of State focused, I think rightly, on the efficiency of the process of planning: how do we get more houses built? That is important. Will the Minister also focus on how effective the planning is for the communities where those houses are built? If we have that slight nuance in the approach on planning, I think that would be helpful.

Of course, I come today not to bury the Minister, but to praise him; because he knows that his colleague in, I think, June 2021, in response to a debate that I called on housing growth in my constituency, killed the 1 million housing target that was in the Labour peer Lord Adonis’s housing target for the Ox-Cam arc. The Minister also knows that his Department, under the new Secretary of State, has said that it wishes to de-emphasise—to flush away—the Ox-Cam arc, which Lord Adonis, the Labour peer, was using as his Trojan horse to build a million houses in the play spaces of Buckinghamshire, Bedfordshire and Cambridgeshire. It is welcome that those changes were made, so I want to put on record my thanks to the Minister and ask him to make sure that we follow through to ensure that unreasonable targets are not placed on councils in the Ox-Cam arc area.

The Minister also knows that his colleague said that he would arrange meetings for me with the Department for Education for school places and with the Department of Health and Social Care on GP places. I am grateful to the Department for allowing that meeting to take place with school places; we had a very good meeting with the Department for Education, but I am interested to learn more from the NHS. I am completing a survey of GPs and around June this year will have the opportunity to present a report. Will the Minister follow up on that with his colleagues in the Department of Health and Social Care to ensure that I get access to the Secretary of State when that report is ready?

I just want to make a couple of points on GPs, if I may. As many colleagues have said, I know that people are frustrated that they cannot get access, but they should know that their GPs are working very hard. I would make this point: abuse is never acceptable when people contact their GP surgery. People should hold back. Don’t go all Will Smith, right?—don’t go all Will Smith when you call your GP surgery. Make sure you take that extra breath when you talk, because the people you are talking to are under considerable pressure.

We need to look at the GP partner model. I know there are many who would like to say that that model is an oddity in the new world. No, it is not. Entrepreneurship and the idea of running your own business has its place in primary care. We need to make sure that we open up and broaden the way in which we give people access to primary care. We have to recognise that GP access is a bottleneck in the system. I fully support infrastructure first, but the answer is not always more people. Often, it is more efficient processes with the existing people, or new avenues for people to access the care.

Will the Minister go back to his colleagues, as he considers GP practice and housing growth, and say, “Please make more progress on giving people the power to understand how they can access primary care”? We are making good progress with the NHS app, but it is an NHS app designed for us that actually looks like it was designed for doctors; it is very hard to make effective consumer decisions using the app. I ask the Minister to broaden the access for people to get into primary care through chemists and other facilities, and to please move forward with diagnostic centres.

Oral Answers to Questions

Richard Fuller Excerpts

Monday 24th January 2022 Commons Chamber

[Michael Gove]

I have spent many happy hours in Greenock and am looking forward to many more. I imagine that time there can only be enhanced, whether in Cappielow or anywhere else, with the hon. Gentleman. The key thing about the levelling-up fund is that constituencies across the United Kingdom, including in Scotland, have benefited. I look forward to working with him and others to ensure that—[Interruption.] As a Morton fan, he will appreciate that patience is a virtue.

[Richard Fuller (North East Bedfordshire) (Con)]

The forthcoming levelling-up White Paper is an opportunity to undo the imbalance in investment in active travel networks between towns and urban areas, which get the lot, and villages, which get very little to connect them. Will my right hon. Friend arrange for a meeting between me and one of his Ministers, together with members of Potton Town Council and Sandy Town Council, to talk about their active travel network?

[Michael Gove]

Yes.