Leaseholders: Protection from Unfair Practices

Housing, communities and local government – in the House of Commons on 19th July 2021.

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Photo of Mark Logan Mark Logan Conservative, Bolton North East

What steps his Department is taking to help protect leaseholders from unfair practices.

Photo of Eddie Hughes Eddie Hughes Parliamentary Under-Secretary (Housing, Communities and Local Government)

Unfair practices have no place in our housing market and the Government are committed to ending them. In January, we announced a package of reforms that will result in substantial savings to leaseholders, and we are currently legislating to restrict ground rents to zero for future leases. The legislation is currently with their lordships and will come to this House in the autumn.

We have asked the Competition and Markets Authority to investigate potential mis-selling in the leaseholder sector. In September last year, the CMA began enforcement action against a number of developers and investors. I was particularly pleased to hear that both Persimmon and Aviva have already agreed to amend their practices as a result.

Photo of Mark Logan Mark Logan Conservative, Bolton North East

This is my first time shooting the breeze with the Minister in his new role—I offer him big congratulations. Will he clarify whether the Building Safety Bill will protect leaseholders in cases in which the property developer has failed to complete its work diligently, even if the company in question becomes insolvent because of its own malpractice?

Photo of Eddie Hughes Eddie Hughes Parliamentary Under-Secretary (Housing, Communities and Local Government)

It is a pleasure to shoot the breeze with my hon. Friend. It is fundamental that industry contributes for having compromised public safety, which is why the Building Safety Bill introduces a new levy on high-rise residential buildings. Clause 124 of the Bill also provides legal requirements for building owners to explore alternative ways to meet remediation costs and provide evidence. If that does not happen, leaseholders will be able to challenge costs in court. In addition, we have announced more than £5 billion towards remediation work on buildings of 18 metres and above and a generous finance scheme for remediation work on buildings of 11 to 18 metres.

Photo of Mike Amesbury Mike Amesbury Shadow Minister (Housing, Communities and Local Government)

There is, finally, much in the Leasehold Reform (Ground Rent) Bill for many people to welcome going forward, but people like Tracy in my constituency, and many millions of existing leaseholders, remain trapped, with unjust and feudal charges. Will the Minister commit to supporting Labour’s amendment, which is to be considered in the other place tomorrow, to extend the ban to the many leaseholders and not just the new?

Photo of Eddie Hughes Eddie Hughes Parliamentary Under-Secretary (Housing, Communities and Local Government)

It is important that we take the opportunity to be proportionate about the situation we are in: 96% of the high-rise buildings with unsafe aluminium composite material cladding identified at the start of last year are now remediated or have work under way. The Government are already taking action to help people who are in a difficult position. As I said, the new Building Safety Bill will provide legal requirements for building owners to explore alternative ways to meet future remediation costs.