Leasehold Reform

Describes cases of leaseholders who were misled about the cost of buying freehold rights and now face insurmountable fees, along with difficulties in selling their homes due to high management charges.

Shares a constituent's story of being charged £80,000 for leasehold charges on top of rising mortgage payments, causing significant financial distress and mental health issues.

Highlights problems with management companies charging exorbitant fees without accountability or regulation, affecting both leaseholders and freehold owners alike.

Discusses a case in her constituency where a freeholder attempted to exploit leaseholders under the pretence of fire safety measures, raising concerns about security of tenure for residents.

Recalls previous Government commitments from 2019 to restrict the sale of new houses on leasehold basis but notes that thousands more properties have been sold since then, continuing the exploitation.

Illustrates a situation where homeowners do not own the land their house is built on, facing high fees for making basic alterations to their home, highlighting the unfairness of the leasehold system.

The Minister has spoken of a lot of support and commitment to doing something at some stage in the future. Why is it taking so long? The Select Committee was pleased with the Government’s response to our 2019 report, but we are still waiting for progress on simple legislation such as banning leasehold for new houses, restricting ground rents, simplifying enfranchisement processes and addressing service charges. Four years later, why have these issues not been addressed? The Select Committee also got Government agreement on further restrictions on ground rents for new properties, but we do not see progress on any of these issues. Why is leasehold reform taking so long?

Thanked the hon. Member for Sheffield South East and the Minister, expressing that forcing a non-binding vote on the issue shows party politics but is not criticism of any political party. Emphasised the need to improve life for those in unsatisfactory leasehold situations and criticised poor behaviour from house builders and landlords. Noted the long history of issues with commonhold viability and government inaction. Highlighted variations in leasehold property percentages across constituencies, and questioned the voting rights of overseas owners on enfranchisement. Criticised misreporting by BBC regarding the possibility of quickly transforming all leaseholds into commonhold. Urged the Government to fund test cases against unfair practices and criticised post-Grenfell consequences related to fire safety regulations. Asked why not have a way of funding some test cases to rule that this kind of crookery ends. Mentioned the need for review and change in Fire Safety Act 2021, Building Safety Act 2022, and statutory instrument 2020 No. 632. Suggested housing providers must be trusted to attract people into decent retirement homes.

Declared an interest as both a leaseholder and the owner of one buy-to-let flat, expressing that leaseholders had to pay for remedying faults after another floor and roof garden were built above his top-floor flat.

Questioned if the reason there is no urgency on this issue is due to developers making excessive profits from leasehold expansion, suggesting a correlation between excessive profits and the increase in leasehold properties.

Mr Jones highlighted the complexities and issues faced by first-time buyers in the leasehold system, particularly stressing the greed of developers who exploit this system for profit. He mentioned that the number of houses sold as leasehold has more than doubled between 1995 and 2015. Mr Jones also pointed out problems with legal advice being dependent on property developers, stating solicitors should act in buyers' best interests rather than pushing through unfair deals. He gave examples from his constituency involving Persimmon Homes, detailing sharp practices such as passing maintenance costs onto leaseholders for unfinished common areas and refusing to pay 15 years’ maintenance on an area of land which is then passed on to a management company owned by the leaseholders.

Ms Morton raised concerns about the uncertainty faced by constituents due to delays in leasehold reform. She called for easier and cheaper processes for extending leases, reducing costs associated with lease extensions, ensuring independent legal advice, and ending the feeling of being held ransom by freeholders. She urged the Minister to confirm commitment to making necessary changes this year.

Ms Dixon criticised the Government for delaying leasehold reforms despite manifesto commitments, causing serious harm to millions of households. She highlighted issues such as increased ground rents and the inability to sell properties due to short leases, stressing the need for urgent meaningful change. She emphasised the impact on people's mental health and economic security.

Agrees with the Government's plans to reform leasehold and calls for a balanced approach that addresses both feudal aspects of leasehold and potential excesses of free market capitalism. He suggests commonhold as an alternative, alongside community land trusts which he praises for their long-term stewardship role in affordable housing provision. Danny highlights the need to protect community-led housing models under any reforms and advocates for changes such as enabling public land transfer to CLTs at agricultural prices.

Intervenes to highlight the influence of lobbyists paid by developers and those exploiting leaseholders, suggesting that equal resources should be given to advocacy groups like the National Leasehold Campaign for balanced lobbying.

Luke Thomas's story highlights how the leasehold system has turned a dream into a nightmare for many, trapping them due to issues like lack of EWS1 certificates or completion of fire safety works. The Government needs urgent action on practical measures such as introducing standard forms and providing guidance to conveyancing solicitors.

Welsh Government have taken steps in Wales, virtually eliminating new leasehold for houses and reducing ground rents. However, we need ambitious reform from the UK Government on an England and Wales basis to help constituents escape terrible situations.

In Leigh, many leases were originally put in place by Churches or landowners as a replacement for agricultural revenue. Over time, these have decayed into a semi-dodgy business where people receive unexpected bills for legal work to trace back the origin of last paid rent. Comprehensive leasehold reform is needed now.

The bad news just keeps on coming for leaseholders. As much as the Leasehold Reform (Ground Rent) Act 2022 made meaningful progress in all but abolishing ground rents for leaseholders of newly purchased new builds, reform for existing leaseholders has been kicked into the long grass. There are 4.8 million existing leasehold properties and, unless reform comes quickly for those homeowners, new build leasehold properties will be seen by prospective buyers as more desirable since they are not subject to the same ground rent charges. The Government keep promising that reform is just around the corner—if leaseholders just keep supporting the Government at another general election, they will really mean it this time and sort the problem out. The reality is that they have had 13 years to clean up this feudal model of home ownership, but they show no signs of doing it soon. Britain is in the midst of a housing crisis: private renting costs are out of control; the disastrous Tory mini-Budget made it harder for millions to get a mortgage; and the leasehold model is clearly broken.

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.

The leasehold system, unique to England and Wales, is described as an antiquated and unjust feudal practice that traps millions in ever-increasing costs without real choice. Mike Amesbury cites his constituents' experiences with exorbitant ground rents and service charges, emphasising the need for comprehensive reform to enfranchise existing leaseholders and prevent new homes from being sold under this system. He criticises the Government's U-turn on their commitment to legislate against leasehold.

No substantial contribution in provided text.

Marie Rimmer highlights that almost every country in the world has reformed or abolished the leasehold system, except Britain. She raises concerns about the increase in new build houses sold as leaseholds since 1995, leading to more people trapped in mis-sold arrangements. Despite changes restricting ground rents on new properties, existing leaseholders remain unprotected. Rimmer calls for legislation to help those already caught in the leasehold scandal and stresses the importance of legislative change for both new and existing leases.

Ms. Morgan argued that the leasehold system is outdated and needs urgent reform, emphasising issues such as extortionate ground rents and management fees, which are often imposed by developers in new housing developments. She cited examples of fleecehold arrangements where homeowners are forced to pay significant maintenance costs without proper oversight or recourse. She highlighted the importance of including provisions for managing shared spaces, addressing concerns about unfinished infrastructure and unaffordable maintenance charges. Ms. Morgan urged the Minister to consider measures protecting existing leaseholders from exploitative practices until comprehensive reforms can be implemented.

Mr. Madders outlined the historical context of the debate, citing a previous statement made in 2016 to highlight the persistent nature of leasehold issues. He discussed specific instances where homeowners faced financial hardships due to unfair ground rent clauses and excessive fees for property alterations or planning permissions. The MP stressed that leasehold tenure is not only unjust but also exploitative, with freeholders often treating homes as mere assets rather than lived-in spaces. Mr. Madders called for legislative changes to empower residents, regulate service charges more transparently, and end the ability of third-party landlords to exploit homeowners.

Described personal experience with leasehold properties, highlighted issues such as extortionate service charges, lack of sinking funds, and other prohibitive costs. Criticised government's failure to implement commonhold system despite 2019 manifesto promises.

Cited personal experience with leasehold system and examples from his constituency, such as Oaklands on Argyle Road and Chartwell Close in Greenford. Called for reform to end sale of new private leasehold houses and introduce commonhold system.

The Opposition is concerned that leaseholders are facing a living nightmare due to escalating ground rents, unjustified charges, and onerous conditions imposed without consultation. Labour aims to address the historical inequity in the leasehold system by reforming it fundamentally and comprehensively. The Government has committed to implementing all Law Commission recommendations but recent reports suggest this commitment is wavering. The Minister must clarify whether the forthcoming Bill will include measures such as a cap on ground rents, more powers for tenants, and a ban on building owners forcing leaseholders to pay legal costs.

The Minister thanked Members for their contributions and emphasised that the Government is committed to further reforms in this Parliament, despite media speculation suggesting a U-turn. She stated that officials are working hard to bring forward leasehold reform but declined to provide specific timelines or details of forthcoming legislation due to House traditions.

The Member raised a point of order, criticising the Minister for not addressing detailed questions from Members and providing a speech written by civil servants rather than responding directly to the debate. He highlighted that she was refusing interventions.

The Member responded to Kevan Jones's point of order, noting that she is not responsible for the Minister’s speech and assured the House that the other Minister, Lee Rowley, would be coming back to address concerns. She also addressed the timing issue and mentioned checks being made.

The Member questioned the absence of the Secretary of State and suggested that supporting the motion would be a way to address concerns about priorities. He asked for clarity on the Government's commitments.

The Member inquired whether the Minister was committed to bringing forward both banning new leasehold homes and introducing a new enfranchisement process in the upcoming Bill. He sought confirmation of these commitments.

The Member pressed for a commitment on Wales, asking if the Government would consider reform based on an England and Wales basis as per Welsh Government preference. He also questioned why there was delay despite previous promises.

The Member asked for clarity regarding the Law Commission's recommendations, questioning whether it is the Government’s intention to legislate all three reports in the forthcoming leasehold reform part 2 Bill.