Leasehold Reform

Debate between Stephen Doughty and Andy Carter

Tuesday 23rd May 2023 Commons Chamber

[Andy Carter (Warrington South) (Con)]

It is a pleasure to follow the hon. Member for West Lancashire (Ashley Dalton), and I am pleased to be able to speak in today’s debate because this issue is very relevant for my constituents. However, I am a little sad that this is an Opposition day debate rather than the Second Reading of a Bill that would resolve many of the issues. Lord Greenhalgh, when he was the Minister responsible, made a promising start to the process when he brought in the first stages of leasehold reform to crack down on exploitative freeholders by removing escalating ground rents. Now is the time to ensure that the next stage of reform delivers for those who are currently trapped in a leasehold system.

The north-west has some of the highest proportion of leasehold dwellings in the country. The most recent statistics from 2019-20 put the proportion built at just shy of a third of all homes—the highest outside London. Throughout my time as the Member of Parliament for Warrington South, its residents have raised issues with me regarding leasehold time and again. There are issues in Chapelford, Edgewater Park in Latchford, Chase Meadow in Lymm—I could list endless developments built over the past 20 years under the leasehold system where problems have been raised. In turn, I have raised those problems with a variety of Ministers, all of whom have said, “Reform is coming.”

I recognise that there has been some progress from Government. I particularly welcome the work to protect elderly residents by reducing ground rent to zero on all retirement properties. It is also welcome that we are restricting ground rents to zero for new leases to make the process fairer for leaseholders. That will also apply to retirement leasehold properties when homes are built specifically for older people, so purchasers of these homes have the same rights as other homeowners and are protected from uncertainties and rip-off practices, but it needs to go beyond that.

I welcome the Secretary of State’s proposals to address the problems associated with leasehold sales, but there is growing worry among many of my constituents that the difficult situation in which they find themselves may not be completely addressed by what we have heard so far. I am afraid that bringing forward plans to give leaseholders the right to extend their leases by up to 990 years, boosting property rights and giving homeowners long-term security and peace of mind do not address all the issues. The constituents I talk to have genuine concerns about the purchases they made 20 years ago and are stuck with problems that are ever-increasing, particularly in relation to service charges, for which they receive little. I urge the Minister to go further in many of the proposals they have put forward.

Colleagues might recall that in a speech in the Christmas Adjournment debate I raised the issue of homes in the Chapelford area of my constituency. I pay tribute to the residents who live there, who first raised their concerns 13 years ago with one of my predecessors. I wrote to the Minister about it recently, and she kindly responded, for which I am grateful. Residents not only have to pay fees, but run into difficulties just trying to get hold of a freeholder. They are faced with complicated, protracted processes from which they cannot even get information about the leaseholds on their homes. They then have to spend money to get information from those leaseholders. My constituents are trapped in leasehold. It makes it difficult to sell those properties. In fact, I assisted a constituent recently because the plans drawn up in the leasehold were just not correct and the solicitors acting for the new buyer rightly would not proceed with the sale.

A number of solicitors in Warrington approached me to say that they had been asked to act for people buying leasehold properties in the Chapelford area, and they refused to do so, because they were so concerned about the details in the contracts. As a result, when purchasers returned to developers, the developers recommended solicitors who disappeared overnight when the development had finished. The process that the developers had put through to the solicitors ended up going absolutely nowhere, and there is a scandal with how solicitors behaved and disappeared once the process and the development had finished. I raised this matter in the House about six months ago, and the Solicitors Regulation Authority approached me asking for details of the solicitors. Frankly, it is impossible to trace them. They sign their names with a company, and the company dissolves and we cannot trace the individuals involved in any way. The Government need to look much more closely at how the solicitors in these cases have acted.

As I mentioned earlier, the Competition and Markets Authority looked at some of the leasehold situations for two years and made progress with several developers, but it did not resolve all the concerns, particularly in relation to properties in Chapelford. That was a missed opportunity for a deep dive into what is going on and addressing individual problems, rather than just looking at the big picture. Will the Minister ensure that the proposals that the Department brings forward in the next Session will address many of these problems? It is vital that people wanting to get out of leasehold can do so without facing extortionate fees that leave them trapped in a leasehold indefinitely or result in them being short-changed when they have to leave the leasehold system.

[Stephen Doughty]

The hon. Member rightly talks about transparency and the difficulties with contacting freeholders. I have had that experience in my constituency too. Does he agree that there needs to be a lot more transparency and communication among freeholders, managing agents and leaseholders? Often there is not transparency over insurance charges, service charges or who to contact when things are going wrong. I have experienced many frustrations on behalf of constituents in that regard.

[Andy Carter]

The hon. Gentleman reminds me of a recent situation with a development in Lymm, where the constituent asked me if I could contact the freeholder to go through the details of what they were actually paying for, and I have still not had a response. I am not sure the freeholder knows what services are being charged for. I am grateful for the point that the hon. Gentleman raises. Finally, I say to the Minister that this legislation is desperately needed. My constituents and I want to see a solution. I sincerely hope that the Department will take heed of the speeches being made in the House today so that we get the reform needed in the next King’s Speech.