New Homes: Developers, Housebuilders and Management Companies

Theresa Villiers Excerpts

Wednesday 5th January 2022 Westminster Hall

[Theresa Villiers (Chipping Barnet) (Con)]

I start by declaring my interest as the owner of an investment property held on a long leasehold basis. I congratulate my hon. Friend the Member for Wantage (David Johnston) on securing this important debate.

I have concerns about the plight of owners of freehold homes, who often face unreasonable charges and sharp practices at the hands of developers. So-called “estate charges” for the maintenance of roads and common areas are often levied by the developer who built the estate in the first place. It is unfair that that type of homeowner cannot challenge the reasonableness of those charges, and that they have no access to dispute resolution or tribunals, meaning that they do not enjoy rights equivalent to those granted to long leaseholders under the current rules. I fear that that is allowing inappropriate practices to occur. One of my constituents has told me of his anger and unhappiness at the high level of charges to which he is subjected, with no effective means to dispute or resist them. The Government have indicated a willingness to legislate to give freehold owners some rights similar to those enjoyed by leaseholders, and I think it is time that they got on with it. I urge them to include some additional protections for freehold homeowners in the Leasehold Reform (Ground Rent) Bill.

As others have done, I strongly condemn abusive practices in relation to leaseholders. I very much support the work of the Competition and Markets Authority in investigating rip-off practices such as the doubling of ground rents every few years. As I said on Second Reading of the Leasehold Reform (Ground Rent) Bill, there is a case for allowing the continued use of ground rents in large apartment blocks. The complete exit of professional freeholders from the market, which is the expected consequence of the abolition of ground rents, would leave leaseholders moving into such buildings with extensive financial and legal responsibilities, so as the Bill goes through, it is worth considering whether some leaseholders in some new blocks might want the option of leaving the stewardship of their block to a professional freeholder.

I will turn to the planning system, which others have addressed with great insight. I have put on the record many times my concerns about the proposed reforms in the “Planning for the future” White Paper. I very much welcome the Secretary of State’s indication that he is willing to think again about those plans, and I look forward to a clear public statement about his views on the White Paper. I do not believe that the way to deliver the homes we need in this country is to strip people of their right to have a say in what is built in their neighbourhood.

There is a range of factors that slow down house building in this country but that have nothing to do with the planning system, and I will set out a few ideas on how we can ensure that the right homes are built in the right quantities in the right places. As a principle, any changes we make to the planning system should increase, not undermine, local democracy. They should strengthen and simplify the local planning processes to ensure that development is led by communities, not forced on them against their will. National housing targets should be advisory, not mandatory, and developers should not be able to use them to try to force local councils to agree to inappropriate development. Housing should sit within an integrated long-term development plan for urban regeneration to prioritise the Government’s levelling-up commitments.

[Jim Shannon]

The right hon. Lady is speaking many words of wisdom. In my constituency of Strangford and across Northern Ireland, the council rules are a wee bit more stringent and strict. For instance, if a developer wants to develop a number of houses, they must make a financial commitment to infrastructure, including roads, and set land aside for leisure, shopping and education. That is all part of the integral planning regulations, and the requirements change as they go through each phase of the planning process. Does the right hon. Lady, whom I know has much knowledge of Northern Ireland, agree that when considering changes and how things can be done better, the Minister should look to Northern Ireland?

[Theresa Villiers]

I am grateful to the hon. Gentleman for his intervention. There are certainly aspects of the Northern Ireland planning system that we could usefully learn from, but it has its drawbacks as well. However, I feel strongly that developer contributions should be ring-fenced for the local communities that are directly affected by the new homes. Too often—certainly in England—such contributions end up being distributed to a broader area and those who bear the burden of the new development do not necessarily get the benefit of the developer contributions.

We should use home building as a core part of efforts to regenerate cities and communities in the north and midlands. Many of those areas have seen population declines over the past 50 years, but new housing and infrastructure could help to reverse that trend.

We also need to address land banking. As my hon. Friend the Member for Wantage proposed, we could introduce a “use it or lose it” rule for land-banked permissions. An agreed start-by date could be imposed and permission could be withdrawn if that deadline was not met, and “start-by” should mean significant initial works and not digging a few holes or a trench. We could also impose end-by dates, after which council tax is payable on every home that is planned, regardless of whether it has been built or not. There is also a case for introducing a rule to limit the number of applications that can be made in relation to the same site, which would bring to an end the exasperating practice of developers coming back again and again, with multiple applications being turned down, which effectively turns the planning process into a war of attrition with planners and local residents.

There is a strong case for a character test in planning, so that if people have a poor track record in development or there are other reasons to doubt their ability to deliver, they can be blocked at the planning stage. I believe that sites that have been illegally prepared for building—for example, where tree felling has taken place illegally—should be made ineligible for future planning applications, and I would certainly like to see the penalties increase for illegal tree felling by developers.

Lastly, we could provide tax incentives for elderly homeowners to downsize, for example by reducing stamp duty.

As the Secretary of State contemplates which reforms to take forward and which to reject, I hope that he will listen carefully to the concerns that have been expressed in this debate. We must not let our rush for new homes compromise our environmental commitments or destroy our green and pleasant land, and we must not repeat the mistakes of the 1960s and 1970s, when poor quality high-rise housing blighted the lives of millions of people.

[Mr Clive Betts (in the Chair)]

I must emphasise that speeches should last for no more than six minutes, please. Otherwise, other Members will not get as much time in which to speak.