New Clause 2 - Commonhold ownership

Part of Leasehold Reform (Ground Rent) Bill [Lords] – in a Public Bill Committee at 12:00 pm on 9 December 2021.

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Photo of Eddie Hughes Eddie Hughes Parliamentary Under Secretary of State (Department for Levelling Up, Housing and Communities) 12:00, 9 December 2021

The hon. Gentleman’s new clause 2 would require the Government to produce an assessment of the legislation’s impact on the level of commonhold ownership. The impact assessment would have to be published within 60 days of the Act’s passage. However, as he said himself, the problem with commonhold in this country is that, despite its name, it is not a common tenure at all. Fewer than 20 developments have been created since the Commonhold and Leasehold Reform Act 2002 Act came into force.

We want that to change. We want to see the benefits of freehold ownership extended to more homeowners. The change brought about through this legislation will help to create the conditions for more commonholds. It will level the playing field, as it will remove an incentive for developers to build leasehold rather than commonhold homes. However, we also need further to lay the groundwork for greater use of commonhold, which is why we have established the Commonhold Council—a partnership of industry, leaseholders and Government—to prepare consumers and the market for the widespread take-up of commonhold. It is also why we asked the Law Commission to recommend reforms to reinvigorate commonhold as a workable alternative to leasehold, for existing and for new homes. We are reviewing those proposals and will respond in due course.

The new clause looks at the interaction between the Bill and commonhold. We have of course considered that interplay, and believe that the Bill and our work to increase uptake of commonhold are consistent with our aim of more fairness and transparency for homeowners. The Bill and our commonhold reform programme are complementary and we do not believe it necessary to conduct a specific impact assessment as the new clause demands. As hon. Members will know, such exercises also take up considerable resources. I think we are all agreed that we should avoid delaying further leasehold reform, and I am afraid that would be the effect of the new clause.

The hon. Member for Weaver Vale asks about progress on the Commonhold Council. All I can say is that work is ongoing. I am sure the chair of the council, Lord Greenhalgh, will continue to push forward, and we will be publishing more information on its work early in the new year.

I am sorry that the hon. Gentleman felt it necessary to table the new clause, but I hope he will consider withdrawing it.