Housing: Leasehold Properties - Question

– in the House of Lords at 3:12 pm on 17 October 2022.

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Photo of Lord Kennedy of Southwark Lord Kennedy of Southwark Shadow Chief Whip (Lords), Deputy Chairman of Committees 3:12, 17 October 2022

To ask His Majesty’s Government what plans they have to either abolish or reform leasehold as a housing tenure.

Photo of Lord Kennedy of Southwark Lord Kennedy of Southwark Shadow Chief Whip (Lords), Deputy Chairman of Committees

My Lords, I beg leave to ask the Question standing in my name on the Order Paper and declare my interest as a leaseholder.

Photo of Baroness Scott of Bybrook Baroness Scott of Bybrook Parliamentary Under Secretary of State (Department for Levelling Up, Housing and Communities)

My Lords, home ownership provides people with greater control over their own homes and lives. We are committed to creating a housing system that works for everyone. This includes our programme of reform to improve leasehold. Following the introduction of the ground rent Act in June, we are due to bring forward further leasehold reforms later in this Parliament, helping millions of households genuinely to own their own home.

Photo of Lord Kennedy of Southwark Lord Kennedy of Southwark Shadow Chief Whip (Lords), Deputy Chairman of Committees

My Lords, I have raised leasehold issues many times in the Chamber in recent years, and the response I receive is never unsympathetic to the problems of this tenure. The frustration is that, despite this, not a lot is happening. I ask the noble Baroness, who I warmly welcome to her new job as a Minister, what we are going to do to move things forward. I will come back month after month and take every opportunity I can until we finally get some real action on this and the change that the Minister has promised finally happens.

Photo of Baroness Scott of Bybrook Baroness Scott of Bybrook Parliamentary Under Secretary of State (Department for Levelling Up, Housing and Communities)

The noble Lord is right: I answered a Question from him not many weeks ago. I have spoken to myself a great deal since that time, as I promised. Noble Lords have to understand that these are very complex and technical issues. The reform will be felt for generations to come, so we need to take time and care. We have made very clear—it is in our manifesto—that we will bring further leasehold reforms in this Parliament. To move things on, I hope the noble Lord opposite will agree that we should meet and talk about what are the important parts of leasehold. I am happy to open that meeting to others in the House, because I know how important it is for noble Lords.

Photo of Lord Best Lord Best Crossbench

Can the Minister confirm that the recommendations from the Government’s own working group on regulation of managing agents will see the light of day in these new reforms? Managing agents look after nearly all the 5 million or so leasehold properties, and their quality and performance vary from the excellent to the dreadful. Will we see these regulatory measures, as recommended by that working group, in the new legislation?

Photo of Baroness Scott of Bybrook Baroness Scott of Bybrook Parliamentary Under Secretary of State (Department for Levelling Up, Housing and Communities)

I thank the noble Lord for the work that he did on that group. The Government are making sure that tenants and homeowners are protected from abuse and poor service; it is happening—we know that. This includes raising professionalisation and standards among property agents, protecting consumers and defending the reputation of good agents. There are many good agents out there and they have to be protected from the actions of rogue operatives. The Government welcome what the industry itself is doing; it has set up a code of practice for property agents. We will work continually, keeping our eye on the working group on the regulation of property agents, chaired by the noble Lord, Lord Best, but also working with the industry to ensure that it continually improves best practice.

Photo of Baroness Pinnock Baroness Pinnock Liberal Democrat Lords Spokesperson (Levelling Up, Communities and Local Government)

My Lords, I wish that the Minister, who I welcome to her position, would recognise the urgency of leasehold reform. I have had a letter from leaseholders in a single block who have themselves had letters from their freeholders listing their liabilities as a consequence of the building safety scandal. The liabilities are an astronomical, unbelievable £3.4 million—for a single block. The developer responsible may pay some of those costs but certainly not all of them. The leasehold model is broken and urgent action is needed to reform it—abolishing it would be a preferable way forward. I recognise that the Minister wants to make a difference but please can she help these leaseholders?

Photo of Baroness Scott of Bybrook Baroness Scott of Bybrook Parliamentary Under Secretary of State (Department for Levelling Up, Housing and Communities)

I obviously cannot comment on a particular instance. I would like to have more information; if the noble Baroness would like to write to me, we will meet and I will look into it. That is not what should be happening. Leaseholders should not be paying; it should be others who are paying. We made that very clear in the Building Safety Act.

Photo of Baroness Jones of Moulsecoomb Baroness Jones of Moulsecoomb Green

My Lords, the Government promised to make this whole system fairer, faster, easier and cheaper, yet somehow it has absolutely stalled. It is fair enough to have meetings; that is wonderful and very fair of the Minister. At the same time, “before the next election” may be a rather difficult timetable to be sure of. Can the Minister please get some sort of date—some idea—of when this will happen? There is urgency; I ask as a leaseholder.

Photo of Baroness Scott of Bybrook Baroness Scott of Bybrook Parliamentary Under Secretary of State (Department for Levelling Up, Housing and Communities)

The noble Baroness is right, and I can assure her that I am talking about it almost daily in the department. I will continue to do so and hope that, the next time I come to the Dispatch Box on this issue, I will have a date.

Photo of Viscount Hanworth Viscount Hanworth Labour

Some of the companies issue contracts in which the small print declares that their leaseholders will be liable for any costs that the companies might incur if they are called before a tribunal. Does this have any legal sanction and, if it does, can steps be taken to prevent this happening?

Photo of Baroness Scott of Bybrook Baroness Scott of Bybrook Parliamentary Under Secretary of State (Department for Levelling Up, Housing and Communities)

I am not sure what the noble Lord is talking about. If he is talking in particular about leaseholders with a freeholder who does not have a managing agent, that can often be quite difficult. The Government are looking at that; we are looking at suitable legislation slots so as to have something in place if they do not employ a managing agent. If I am wrong on that, perhaps the noble Lord could write to me and I will answer.

Photo of Viscount Hanworth Viscount Hanworth Labour

It is a clear issue and I will give the Minister instances of its occurrence.

Photo of Lord Foulkes of Cumnock Lord Foulkes of Cumnock Labour

Is the Minister aware that, notwithstanding the appalling situation of housing in England, there is one part of the United Kingdom where it is even worse? The First Minister of Scotland refuses to visit the Homeless Project Scotland in Glasgow, students are sleeping in hotels and on the floor, and the housing policy in Scotland is engineered by two Ministers who are eccentric members of the Scottish Green Party. Is that not a ridiculous thing? This minority party is driving the policy in Scotland and causing so much hardship.

Photo of Baroness Scott of Bybrook Baroness Scott of Bybrook Parliamentary Under Secretary of State (Department for Levelling Up, Housing and Communities)

I am afraid I have no line into the Scottish Parliament but it does not seem a very good reflection on the way that party works.

Photo of Baroness Bennett of Manor Castle Baroness Bennett of Manor Castle Green

Does the Minister agree that many tenants in England would absolutely welcome a freeze on rents, as tenants are enjoying in Scotland?

Photo of Baroness Scott of Bybrook Baroness Scott of Bybrook Parliamentary Under Secretary of State (Department for Levelling Up, Housing and Communities)

My Lords, we are continually looking at how we can support the rented sector through this particularly difficult time. On Section 21, as the noble Baroness probably knows, the Prime Minister has said that she will not change her decisions on that either.

Photo of Lord Lexden Lord Lexden Deputy Chairman of Committees, Deputy Speaker (Lords)

My Lords, does not the point of the noble Lord, Lord Foulkes, underline the importance of doing all we can to induce voters in Scotland to vote for parties other than the Scottish nationalists, preferably the Conservative and Unionist Party?

Photo of Lord Campbell-Savours Lord Campbell-Savours Labour

My Lords, with dramatically escalating service charges nationally aggravating the position, is not the answer greater transparency over leasehold, freehold and sub-lease title issues more generally? Transparency alone can often solve problems where landlord anonymity hides accountability. If that is combined with the rolling-up of lease liability payments pending payment on the death of a lessee under the debenture arrangements I proposed on 20 June, it would ease the problem. Will the Government please look at what I am proposing?

Photo of Baroness Scott of Bybrook Baroness Scott of Bybrook Parliamentary Under Secretary of State (Department for Levelling Up, Housing and Communities)

The law is very clear that service charges must be reasonable, as in Section 19 of the Landlord and Tenant Act 1985. Leaseholders can apply for a First-tier Tribunal for a determination on this. The Government are also committed to ensuring that service charges are, as the noble Lord says, transparent and that there should be a clear route to challenge or redress if things go wrong. We will continue to work on that for the people affected.