Leasehold and Freehold Reform Bill

Samantha Dixon Excerpts

2nd reading
Monday 11th December 2023 Commons Chamber

[Samantha Dixon (City of Chester) (Lab)]

It is a pleasure to take part in this debate—it has been fascinating to hear from Members from around the Chamber. I pay tribute to the dedicated campaigners, including the Leasehold Knowledge Partnership and the National Leasehold Campaign, for their hard work up to this point. They have campaigned tirelessly for justice in the broken leasehold system, and for the Government to live up to their own manifesto promise and bring this Bill before the House. I am sure they will continue to campaign.

It is estimated that there are 4.86 million leasehold homes in England. That is 4.86 million households stuck in a system that denies people power, control or even a say over the security, safety and future of their own home. As we have seen, this is a cross-party issue: Members from across the House have been expressing the concerns of their constituents for many years, long before I arrived in this place a year ago. This Bill is an opportunity to rebalance the scales in favour of leaseholders, but the question remains: will it actually do so? Unfortunately, I and many others feel disappointed by the limited state of the Bill before us.

It is often said that an empty vessel makes the loudest noise. We have heard a lot of noise, which may reveal the reality that this Bill is somewhat hollow. Not only does it not ensure that new flats will be sold as freehold, contrary to what Ministers have claimed; it does not even do what it says on the tin and ban the sale of new leasehold houses, as the Government originally promised, because it contains no provisions to end leaseholds on newly built houses in England and Wales. I understand that that ban is going to be brought in in Committee, but it was first promised in December 2017 by the right hon. Member for Bromsgrove (Sajid Javid). Originally, the Government claimed to have run out of time to put it into the Bill, but they have been planning it for six years. They repeatedly comment on how complicated leasehold law is, yet they cannot include that one simple provision in the Bill. In reality, it is leaseholders who are exasperated.

Indeed, it appears that the Government have dropped quite a lot of the Law Commission’s recommendations. They claim that the Bill will make it easier, cheaper and quicker to buy the freehold or extend the lease on a property, but how do we know that without knowing what the prescribed rates will be? Thousands of leaseholders have been waiting for this Bill to arrive, and in the meantime they remain in a state of leasehold limbo, trapped by this iniquitous system. Many are unable to sell and move on with their lives. They are being forced into a game of poker in which the stakes could not be higher. Do leaseholders stick, and wait to buy their freehold or extend their lease—in itself, an appreciating asset—in the hope that Government promises to make it cheaper actually materialise, or do they twist, and pay these faceless offshore investment companies thousands of pounds? I do not know the answer, and I am not too sure the Government do either. Professional valuers and leasehold solicitors are struggling to advise their clients, too. Without knowing what the prescribed rates are going to be when calculating these figures, the claim that this legislation will make it cheaper to buy is unsubstantiated.

Also missing from the Bill is the regulation of property agents. The single biggest rip-off in the leasehold system is service charges, and without robust regulation of this, it will continue and leaseholders will remain at the mercy of bad managing agents. On the Opposition Benches, we are committed to implementing the recommendations of Lord Best’s working group, which were published by the Government four long years ago and on which they have sat. The Government have yet another consultation, which leaseholders are busy completing as we speak, on reducing current ground rents for existing leaseholders. As the hon. Member for Harrow East (Bob Blackman) has pointed out, it is not quite clear what the relationship is between this Bill and that consultation, but perhaps the Minister will expand on that.

After so many years of unfulfilled promises, the Government appear to have yet again failed to deliver for our constituents. As my right hon. Friend the Member for Ashton-under-Lyne (Angela Rayner) has said, a Labour Government will make commonhold the default tenure for all new properties, as part of our commitment to reform the leasehold system fundamentally and comprehensively, by enacting in full the Law Commission’s recommendations on enfranchisement, commonhold and the right to manage. I am glad to see this Bill in front of us, but from listening to this debate, it is still clear that there remains a great deal of work ahead before these fine ambitions become a reality. In fact, it is becoming increasingly clear that we need a Labour Government to truly deliver for the so many people stuck in this feudal system.