Leasehold and Freehold Reform

4. Whether his Department is taking steps to reform the leasehold system.

6. If he will bring forward legislative proposals to give freeholders rights to directly challenge management and service charges equivalent to those of leaseholders.

The Government are committed to building on the Leasehold Reform (Ground Rent) Act 2022 and delivering the second phase of our major two-part leasehold reform programme within this Parliament. This will make it easier for leaseholders to purchase their freeholds and will establish greater fairness between those parties.

I welcome the steps taken by my right hon. and learned Friend and look forward to seeing them progress into law. Nationally, much of the focus has been on high-rise flats, but in Fylde there are many new housing developments completed in recent years with leasehold issues of their own. In light of that, what action is she taking to ensure that these reforms include those living on recently completed housing developments?

I can give my hon. Friend assurance that the many measures we will bring in will affect not only new purchasers but existing leaseholders. We will be bringing forward legislation later in this Parliament.

In my constituency, Councillor Weir of Great Denham, Councillor Gallagher of Shortstown and Councillor Dixon of Stotfold are leading efforts on behalf of local residents who own a freehold property to challenge excessive fees, lack of transparency and poor service by estate management companies. Will the Minister review the terms of reference of the property ombudsman to make it easier for homeowners—freeholders—to challenge these unfair practices?

My hon. Friend is right to highlight unfairness in relation to freeholders. Estate management companies must be more accountable to homeowners on how money is spent to maintain privately managed estates. We will be giving freehold owners on these estates new rights to challenge costs and appoint a manager, as well as requiring private estate management companies to join a redress scheme.

The Minister will know that in some parts of the country, residents are impacted by chief rents. The Rentcharges Act 1977 extinguishes all chief rents in 2037, but many of the property companies that hold the chief rents are now using sharp practices and scams to con their residents out of extra money by sending questionnaires to residents about home improvements they have had. What is she doing to tighten up on these scams and sharp practices?

The hon. Member makes an important point, and I know that freeholders are paying charges for maintaining communal areas, known colloquially as “fleecehold”. It is something we are looking at, and I am happy to update him on that.

Just before Christmas, a constituent of mine received a service charge bill in respect of her leasehold flat for fire-stopping works. Leaseholders rightly believe they should not have to pay to fix fire safety defects, and they think the Building Safety Act 2022 protects them from having to do so. Can the Minister therefore set out for the House in what circumstances it is still lawful for the owner of a building to charge leaseholders to fix fire safety defects?

As the right hon. Gentleman will know, we are taking a number of steps in the Building Safety Act 2022 to strengthen protections for the residents living in these buildings. The Under-Secretary of State for Levelling Up, Housing and Communities, my hon. Friend the Member for North East Derbyshire (Lee Rowley), or I will write to the right hon. Gentleman on his specific question.

I welcome what the Minister has said about bringing forward legislation, which this House needs to pass as soon as possible, to protect leaseholders in ways put forward by the Law Commission, with proposals commissioned by the Government. Will she also consider how to make leaseholders parties to the building insurance for which they pay the premiums? For some reason, they are not thought to have an interest in it, but they should. That needs to change.

I have had a number of conversations with my hon. Friend; I know he is very committed to this area. He will know that we are bringing in legislation in due course that will make it much easier for leaseholders to enfranchise their leases. I am already looking at the particular area that he mentions.

Last month marked five years since a previous Secretary of State, the right hon. Member for Bromsgrove (Sajid Javid), promised to liberate leaseholders from “feudal practices”. We have obviously had some progress in terms of new builds, but existing leaseholders are still facing the same problems. I recognise the warm words from the Minister, but can she confirm that we will see legislation coming forward this year to deal with all the existing problems that leaseholders face?

What I can confirm is that we will be bringing forward legislation in this Parliament to make valuations easier for those extending their leases, to make the lease extension experience easier and cheaper, to make it quicker for freeholders to take control of the management of their buildings with a right to manage and a number of other measures.