Commons Sense

House of Commons · Westminster Hall

Leasehold Reform and New Homes

28 February 2024 · 7 other contributors · 11,681 words

Opened by Neil O'Brien Con Harborough, Oadby and Wigston

Responding minister: Lee Rowley

Housing

Summarised by AI from the official record, so it can contain mistakes.

Read the full transcript on Parliament.uk

At a glance

Neil O'Brien raised concerns about leasehold reform and new homes in Westminster Hall. A government minister responded.

Key points

  • Concerns raised about excessive charges and poor service for leaseholders in the constituency.
  • Developers often fail to meet planning conditions, such as providing GP surgeries and maintaining trees.
  • Calls for ending the leasehold model and providing clearer rules on planning conditions and developer responsibility.

Key requests to Government

I urge the Government to end the fleecehold estates model entirely and provide a right to manage or council adoption for existing residents. Furthermore, I ask for clearer rules on planning conditions and developer responsibility to prevent the misuse of variations in planning permissions. Lastly, I request that councils adopt all amenities on new housing estates as recommended by the Competition and Markets Authority.

How the debate unfolded

MPs spoke in turn to share their views and ask questions. Here's what each person said.

Opened the debate

Neil O'Brien Con Harborough, Oadby and Wigston

I am concerned about the issues faced by leaseholders in my constituency. This includes excessive charges for services like terrorism insurance for a fence, as well as developers' failure to meet planning conditions such as providing GP surgeries or maintaining trees. Residents are often misled about their rights and responsibilities when purchasing homes under the fleecehold model, leading to unfair practices that leave them with large bills for poor service. Additionally, many new home buyers face serious issues like sewage backups into their homes and inadequate infrastructure due to the fast-turn development model.

Other contributors (7)
  • Adam Holloway Con West Worcestershire

    Adam Holloway highlighted the issue of leaseholders receiving biased advice from conveyancers recommended by estate agents, leading to situations where buyers are unaware of their rights and potential future costs. He mentioned a case in his constituency where a first-time homeowner missed the opportunity to extend their lease before it dropped below 80 years due to lack of proper advice. Holloway suggested that the Government should prevent sellers from recommending conveyancers and instead encourage buyers to choose their own, potentially enhancing the role of the Leasehold Advisory Service for better support.

  • Jim Shannon DUP Strangford

    Apologised for missing earlier parts of the debate and thanked Julie Marson for allowing an intervention. Emphasised the urgent need for leasehold reform affecting young people starting their lives and older individuals downsizing, stressing that every penny counts.

  • Julie Marson Cons Hertford and Stortford

    Discussed the issues of developers avoiding planning commitments, highlighted problems with leasehold ownership including lack of control over agency fees, difficulty in extending leases, and diminished property value. Mentioned examples of constituents facing high costs to extend their leases or sell properties due to rising ground rents.

  • Keir Mather Lab Selby

    Mr Mather expressed concern about the exorbitant maintenance charges and lack of transparency in new build homes, citing examples where residents are paying high fees for poor service quality. He highlighted issues such as non-functional street lights, damaged roads, and shoddy building work that leaves residents insecure and unable to use basic services like front doors properly.

  • Marsha de Cordova Lab Battersea

    The hon. Member argues that the current leasehold system is unfair and not just, highlighting her constituency of Battersea as having the 18th highest number of leasehold transactions in 2022. She calls on the Government to address this outdated system for fairness and justice.

  • Matthew Pennycook Lab Greenwich and Woolwich

    The hon. Member supports ambitious leasehold reform, pressing for stronger protections and rights for residential freeholders on private estates and advocating the abolition of forfeiture to ensure fair dispute resolution between landlords and leaseholders. The MP disagreed with the Government's assertion that new leasehold houses were banned, raising concerns about schedule 2 which could allow for significant numbers of new leasehold homes over the coming years. He asked if the Government would review their position on schedule 2.

  • Peter Bottomley Con Bexhill and Battle

    Peter Bottomley expressed gratitude to his colleagues for their contributions on the Leasehold and Freehold Reform Bill. He highlighted issues with rentcharges and estate management charges, emphasizing the need for developers to adhere to agreements made with residents. He also called for a bond mechanism ensuring developers deliver as promised before releasing funds. Concerning rentcharges, Bottomley noted that while new ones are prohibited after 1977, existing ones will expire in 2037 unless conditions arise requiring court intervention. He urged the Government to address these issues promptly and not postpone action until future terms of office. The MP shared a concern regarding rentcharge holders turning freehold properties into leases, potentially reducing property values significantly. He called for prompt action following a roundtable discussion.

Government Response

Lee Rowley

It is a pleasure to serve under your chairmanship, Mrs Harris. I thank all the Members who have contributed to the debate and those who are listening to it. The fact that we are talking about this issue for the second time in two days shows how important it is. It is clear, as we discussed yesterday, that Members on both sides of the House recognise that this area badly needs attention and reform. Thankfully, the general consensus across the House is that we have to move in that direction, so I hope the Bill, which went to the other place yesterday, will make fast progress there. The Government absolutely acknowledge this issue and introduced the Leasehold Reform and New Homes Bill, which makes it cheaper and easier for leaseholders in houses and flats to extend their lease or buy their freehold. The standard lease extension term is increased from 90 years to 990 years with ground rent reduced to zero. We are also requiring transparency over leasehold service charges and replacing building insurance commissions for managing agents, landlords and freeholders. The Minister noted the progress made but acknowledged that hon. Members want to go further in certain areas. He discussed specific concerns raised by MPs about GP provision, conveyancing issues, Harron Homes, rentcharges, forfeiture, and clarity of information for leaseholders. The minister stated that the Government is looking at these issues seriously and hopes to be able to report back to the House on them shortly. In conclusion, the Minister thanked all contributors and expressed hope for real progress in this important area which has needed reform for so long.

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