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Question
The MP thanked the Minister for his remarks and acknowledged progress on leasehold reform, noting that Labour had promised this when they stood for election 18 months ago.
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Question
Pay tribute to the Minister's hard work in getting us to this stage. Can he confirm that he will support the Committee’s inquiry with the necessary evidence, including the Government’s response to the 2023 ground rent consultation?
Minister reply
We have published a series of documents at 7 am, including a copy of the draft Bill and a policy document setting out our rationale for the £250 per year ground rent cap. We will make available to the Committee other information, evidence and documentation as needed and at the earliest possible opportunity.
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Question
While welcoming measures such as introducing a commonhold framework, abolishing leasehold for newbuild flats, and ending forfeiture, why should leaseholders continue to pay £250 for nothing? What proposals will the Minister take forward to abolish residential leasehold charges?
Minister reply
The Government's proposals need to go further, but we are committed to enacting remaining recommendations over the course of the Parliament. We aim to switch on the rent charge provisions soon after Royal Assent and expect the ground rent cap to be in place by 2028.
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Question
As a leaseholder, I understand the issues faced by my constituents. Will the Minister assure me that we will look at improving the conveyancing process and address considerations such as historical service charges?
Minister reply
We are consulting on changes to increase protections over service charges and have received useful feedback in response. We will continue to reflect on recommendations from Lord Best's report, including mandatory qualifications for managing agents.
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Question
Does the commitment by the Government to protect leaseholders mark a break from years of weak regulation by coalition and Conservative Governments?
Minister reply
We acknowledge previous deregulation under coalition and subsequent governments. The 2024 Act includes some relief for leaseholders, but we need to take it further. Labour will continue with measures recommended in Lord Best's report.
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Question
Will the transition from £250 to a peppercorn ground rent be backdated when it becomes effective?
Minister reply
People will continue to pay existing ground rents up until the measures are brought into force. Once implemented, this cap will provide immediate financial relief for leaseholders paying high ground rents.
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Question
What support can the Government offer to existing leasehold house owners who remain trapped in unfair systems?
Minister reply
Existing leaseholders can choose to stay in leasehold ownership but take advantage of new rights and protections. An easier mechanism for converting to commonhold is included, which is a radical improvement on leasehold.
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Question
Will evidence around the peppercorn rent and 40-year requirement be made available to the Housing, Communities and Local Government Committee? Could we address service charges as soon as possible?
Minister reply
This Bill will not do everything. The provisions in the 2024 Act are sufficient for now, but help is on the way. We aim to switch these measures on at the earliest opportunity.
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Question
Please will the Minister explain why he is not using the draft Bill to end the wild west of unregulated property companies?
Minister reply
We launched two comprehensive consultations before Christmas on how we switch on the consumer protections set out in the 2024 Act for those living on freehold estates and on how we end the prevalence of private management arrangements.
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Question
Can my hon. Friend address that specific loophole where developers put up a new building with a proportion of commercial property in its base?
Minister reply
We have given consideration to all these issues, and it is our intention to persuade as many leaseholders as possible to convert to commonhold.
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Question
Which of the changes will be most beneficial for my Park25 residents?
Minister reply
If they are subject to high ground rent charges, the cap on introduction will benefit them hugely on its introduction. If they have suffered from the threat of forfeiture, they will benefit in myriad ways from the legislation.
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Question
How soon will Southampton’s leaseholders get the rights, protections and securities that they have been waiting a long time for?
Minister reply
It is the Government's intention to ensure that the draft Bill becomes law as soon as possible so that leaseholders can benefit from the new provisions. No one will pay more than the ground rent cap.
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Question
Could he say a little more about how his announcement will not spook the City and how he will ensure that there continues to be a flow of investment into our high streets?
Minister reply
We consider the intervention on ground rents through this draft Bill to be a justified and proportionate approach, taking investors' concerns into account when developing the policy.
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Question
Could the Minister tell us now—or write to me with the details—how shared ownership might be impacted by the changes?
Minister reply
I am more than happy to write to my hon. Friend about the issue of shared ownership specifically.
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Question
Do the Government envisage driving this process so that people are empowered and encouraged to make that conversion, and when does the Minister think that we will get rid of the last leasehold in England?
Minister reply
It is absolutely our intention to make it easier for leaseholders to convert to commonhold, but leaseholds will exist for some time to come.
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Question
May I take this opportunity to tell my hon. Friend how much residents in Chelsea and Fulham are looking forward to the further steps on service charges and managing agents that he has outlined?
Minister reply
We are absolutely committed to strengthening regulation of managing agents, and some proposals on charges were set out in the consultation on protections for leaseholders.
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Question
Hundreds of thousands of freeholders up and down the country who are locked in financial arrangements with unaccountable estate management firms will be very frustrated by this statement, because it focuses solely on leasehold. Will the Minister very clearly set out the next steps to tackle this enormous travesty?
Minister reply
I must correct the hon. Gentleman: it does not solely deal with leasehold. The draft Bill will repeal sections 121 and 122 of the Law of Property Act 1925, ending disproportionate remedies for rent charge owners.
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Question
Will the Minister give us a bit more detail on the timetable for the Bill and assure us that he will do everything he possibly can to ensure that the cap is brought in as soon as possible?
Minister reply
The Government's intention is to make these reforms law as soon as possible following scrutiny by the Housing, Communities and Local Government Committee.
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Question
Leaseholders in Bristol Central are being ripped off. I am disappointed that the Minister and the Government will not enforce peppercorn ground rents immediately, although a £250 cap is an improvement and the movement towards commonhold is really welcome. However, there are big problems for leaseholders that are still unaddressed. Will the Minister please commit to tackling the soaring insurance premiums that have left homes unmortgageable and leaseholders trapped?
Minister reply
On the specific issue of insurance charges, we need to bring into force some provisions in the 2024 Act that relate to insurance commissions. We remain committed to doing so at the earliest opportunity.
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Question
Will the Minister give some reassurance to leaseholders in Gravesham who have experienced poor service that this is about rebalancing power so that they are protected going forward?
Minister reply
All provisions in the draft Bill aim to rebalance leasehold and freehold interests. Freeholders have often been in an unassailable position of strength vis-à-vis leaseholders, which we intend to address by introducing the Bill.
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Question
Will the Minister meet me to explore how we might address issues affecting residents in the Cooden area of my constituency who have been sent letters by a company demanding thousands of pounds for regularising covenant breaches?
Minister reply
I will happily meet the hon. Gentleman to discuss these issues and our intentions as a Government to end unjust practices from which leaseholders suffer, including those in his constituency.
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Question
What hope can he offer my constituents who are unable to extend their leasehold or buy their freehold because of the actions of the St Mary Magdalene and Holy Jesus Trust?
Minister reply
The provisions to address this specific issue are not in the draft Bill, but we are giving serious consideration to how and where we will resolve it. My officials and I have had many discussions about it.
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Question
Will he meet me following a service charges forum in Oxford so that I can relay to him the issues my constituents, particularly social housing tenants, are having?
Minister reply
I am happy to agree to meetings across the House. The matters raised by the hon. Lady address an ongoing consultation on standardising and making more transparent service charges across the country.
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Question
Will the Minister take this opportunity to reassure my constituent that this Labour Government are on her side and doing all they can to free her from what has become a nightmare?
Minister reply
We are on his constituent’s side. It is because so many leaseholders across the country are suffering from unjust practices that we have to overhaul and ultimately end this feudal system.
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Question
When will the Minister finally crack down on exploitative property management companies such as FirstPort and Eagerstates?
Minister reply
We have already set out proposals to strengthen the regulation of managing agents. These are not the summit of our ambitions; there is more to come, including an even more important role for managing agents as we progress towards a commonhold future.
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Question
What can the Minister say to reassure my constituents that there will not be loopholes in the cap and all charges are included in the £250 limit?
Minister reply
It is certainly not our intention to allow any loopholes into the legislation. We have brought forward a draft Bill for additional scrutiny by the Housing, Communities and Local Government Committee.
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Question
What consideration has the Minister given to protecting housing with care sector organisations such as St Monica Trust that provide affordable rents and shared ownership?
Minister reply
The draft Bill includes exemptions for new leases entered into since 30 July 2022, but we will consider through pre-legislative scrutiny whether other exemptions would be appropriate for a small number of leases granted for specialist purposes.
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Question
What will the Bill do to ensure that this Government make the transition to commonhold happen, rather than failing as previous Governments have done?
Minister reply
Commonhold failed to take off after its introduction in 2004 and the legal framework is now out of date. We aim to reform and reinvigorate commonhold as a tenure with an easier conversion mechanism.
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Question
Will the Minister ensure that when decisions are being made about the transfer to commonhold, those who do not respond do not hold up the decision?
Minister reply
I am more than happy to write to her on the specific issue she raises. It is these nuanced points that we want to work through, and that is why we have brought forward a draft Bill for enhanced scrutiny.
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Question
Why does he not use this Bill as a golden opportunity to bring forward Lord Best’s recommendations on having a property regulator?
Minister reply
We have given serious consideration to how we will take forward Lord Best’s recommendations from his 2019 report and, as I have made clear, we are taking some of them forward already. This Bill introduces reform in a number of specific areas.
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Question
Can the Minister set out how the upcoming legislation will reform and reduce the minimum qualifying threshold for the right to manage?
Minister reply
My hon. Friend will be aware that there were very few provisions relating to the right to manage in the 2024 Act. We are committed to enacting the remaining Law Commission recommendations relating not only to the right to manage but to leasehold enfranchisement.
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Question
What are the Government’s plans in respect of service and maintenance charges?
Minister reply
We intend to switch on the 2024 Act provisions that standardise service charges and increase transparency around them, so that people can more easily challenge unreasonable charges at tribunal.
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Question
Can he promise protection from this exploitation for my constituents in this Parliament?
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Question
Does he agree that strengthening and simplifying the route to commonhold will shift power away from distant freeholders and back to residents?
Minister reply
Absolutely. Commonhold is a purpose-built tenure designed specifically for people to own and manage a shared building without a third-party landlord and without a ground rent.
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Question
Will the Minister undertake to discuss these proposals with the devolved regions to enable a blanket costing to apply UK-wide at this time of austerity?
Minister reply
I can give him the undertaking that the devolved Administrations will be kept up to date with what we are doing.
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Question
Does the Minister agree that the age of the exploitative leasehold system—and the ripping off of residents—is finally over, and that it is thanks to a Labour Government?
Minister reply
My hon. Friend is absolutely right. We are calling time on the abusive practices of unscrupulous property agents and on the leasehold system as a whole.
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Question
Will he set out what additional steps that Government are taking to regulate rogue freeholders?
Minister reply
I will be careful in what I say in respect of that particular case, but a meeting with my hon. Friend and other Sheffield MPs was postponed because this legislation was being brought forward.
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Question
Will the Minister outline what steps will be taken, and what the timeline is, for action on managing agents?
Minister reply
We are clear that we need to strengthen the regulation of managing agents. I appreciate the strength of feeling, across the House, on the matter.
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Question
Would she agree to visit my constituency to see the difficulties that homeowners face?
Minister reply
I think that I have already committed to ensuring that a visit to her constituency is on the very long list of requests that I have received, but I will bear her request in mind.
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Question
How will the Government ensure that multi-level service charges like those are addressed?
Minister reply
We are committed to ensuring that all residents have fair and transparent service charge provisions. We will continue to reflect on the various recommendations made in Lord Best’s 2019 report.
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Question
I have heard too many horror stories from leaseholders in Bournemouth West. One constituent, Jeremy Green, described feeling like a second-class citizen subject to the total autocratic control of his freeholder landlord and its managing agent. Will the Minister assure me that this Labour Government are getting on with reform and giving leaseholders the protections and dignity that they deserve?
Minister reply
We want to act as quickly as possible, particularly to bring in the new consumer protections provided for by the 2024 Act.
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Question
This package of measures will transform the lives of thousands of my constituents. On fleecehold, residents in Forge Wood are paying thousands of pounds for services that other constituents receive for free. Can the Minister confirm that he will act as quickly as possible following the end of the consultation?
Minister reply
I am acutely aware of the strength of feeling on freehold estates. It cannot be an either/or when it comes to ensuring that residential freeholders and leaseholders get the rights and protections that they need.
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Question
I welcome the statement and the progress that it represents, and I put on record my thanks to the National Leasehold Campaign. For the benefit of Warrington South leaseholders who are trying to understand the 40-year peppercorn cap, will the Minister explain how the 40-year cap was arrived at and whether there is any scope for the transition to be brought forward so that relief is felt sooner?
Minister reply
The rationale for the ground rent approach that we have chosen is set out in a policy paper published this morning. The Select Committee will scrutinise the draft Bill, providing suggestions.
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Question
I welcome the statement and the Minister’s great work. Leaseholders and freeholders across my constituency, in places like Greenhithe, Ebbsfleet and Stone, will hugely welcome the cap on ground rents and the rest of the detail on the draft Bill. May I impress on the Minister the need for us to go further on supporting those who live on unadopted or freehold estates, and to address poor practices by managing agents?
Minister reply
I am more than happy to meet him to discuss the draft Bill and related matters.
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Question
Correspondence from leaseholders in my constituency, which makes up a lot of my inbox, mentions poor service, rising charges and homes that they can no longer remortgage or sell. They will very much welcome today’s announcement, but will the Minister reassure them that the Government will rise to all the challenges that they face, swing the balance of power back towards homeowners, and tackle the real problem of service charges?
Minister reply
I absolutely agree with my hon. Friend. His constituency is just over the river from mine, and is, in many ways, very similar. Day in, day out he will receive complaints about service charge increases and onerous ground rent terms.
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Question
Since my election I have worked to support leaseholders across my constituency. When I surveyed local leaseholders on what they needed from the Government, the most common response was a reduction of the unfair charges that they face. Does today’s announcement not show that we finally have a Government who are listening to leaseholders and putting money back in their pockets?
Minister reply
That is absolutely right. In this area and so many others, the cost of living and addressing the affordability crisis faced by so many families across the country is the Government’s driving mission.
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Question
I thank the Minister for his genuinely groundbreaking statement. It feels like a little while ago that he visited Ipswich to talk to local people about the building safety crisis and leasehold. Now we are capping ground rents, making it easier to move to commonhold, and scrapping leasehold for all new builds. Is this a case of a Labour Government keeping their promises and making a real change for many people up and down the country?
Minister reply
That is absolutely right, and I can assure my hon. Friend that we have given consideration to building safety remediation in the design of this legislation.
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Question
My constituents in Hartlepool are facing outrageous estate management charges, including a 49% increase in the administration fee by management company Sela just this year. When will we switch on the protections of the 2024 Act, and give the powers necessary for homeowners to challenge unfair charges?
Minister reply
I simply say to my hon. Friend: as soon as possible.
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Question
Yet again, we have the wonders of hindsight from the Conservative party. In the immortal words of Beverley Knight, ‘‘Shoulda woulda coulda’ means I’m out of time”, and the Tories certainly were. Given that these proposals will not only reform a feudal system but cap ground rents at £250, does the Minister agree that this is another way in which this Government are putting money back into the pockets of families struggling with the cost of living?
Minister reply
I do not want to be too critical of the Conservative Government, because they did bring forward the 2024 Act, and they did move the dial when it comes to the public conversation about things like ground rents. But ultimately, they did not finish the job.