Leasehold Reform

Question

Asked by

To ask His Majesty’s Government why they did not proceed with the planned abolition of leasehold for flats in the Leasehold and Freehold Reform Bill.

My Lords, in begging leave to ask the Question standing in my name on the Order Paper, I refer the House to my relevant interests, as set out in the register, and the fact that I am a leaseholder.

My Lords, the Leasehold and Freehold Reform Bill contains a substantial package of measures to increase leaseholders’ rights as consumers and home owners. We have prioritised the most significant measures that will help existing leaseholders now. We remain committed to continuing our leasehold and commonhold reforms, and the Bill is a major step forward. The best way to help leaseholders now is to make the existing leases fairer and more affordable. Our focus is on legislating where we can in order to make genuine improvements to leaseholders’ daily lives straightaway.

My Lords, although many of the measures in the Bill are very welcome, we have been told for years that the Government would abolish, as they put it, this “feudal” leasehold housing tenure. The Bill had been promised in the third Session of this Parliament. Here we are in the last Session of the Parliament, and the abolition of leasehold is completely left out of the Bill. It was then confirmed that the Government would introduce amendments later on, but only to abolish leasehold houses, with leasehold flats, which comprise 75% of leasehold, here to stay. That is not good enough. Will the Minister take the opportunity to apologise, given the Government’s pledge to abolish the feudal leasehold housing tenure?

My Lords, I will not apologise; the measures in the Bill will benefit owners of flats and houses alike. The majority of houses have always been provided as freehold, and there are few justifications for building new leasehold houses, so the Government will ban them, other than in exceptional circumstances. However, flats have shared fabric and infrastructure and therefore require some form of arrangement to facilitate management. This has been facilitated by a lease. None the less, the Government recognise the issues in the leasehold system and remain committed to reinvigorating the commonhold system so that developers and home owners have an alternative to leasehold ownership.

My Lords, further to the question from the noble Lord, Lord Kennedy, the Secretary of State made his views absolutely clear when he said:

“I don’t believe leasehold is fair in any way. It is an outdated feudal system that needs to go”.

But the Bill does not do that—it does not even mention commonholds. When I asked about this in the previous exchange, I was told by the noble Baroness, Lady Penn:

“When it comes to reforms to commonhold, we continue to consider the Law Commission’s report in detail to find the best way forward”.—[Official Report, 30/11/2023; col. 1180.]

The commission reported in 2020. When will we learn the Government’s conclusion?

I assure my noble friend that we remain committed to continuing our leasehold and commonhold reforms, and the Bill is a major step forward. The Government remain committed to a widespread take-up of commonhold for flats, and we have been reviewing the Law Commission’s recommendations to reinvigorate commonhold as a workable alternative to leasehold, alongside working with the Commonhold Council to consider practical steps to prepare consumers and the markets.

I congratulate the noble Lords, Lord Kennedy and Lord Young, on their persistence in this matter. We took a Question on this on 30 November, replied to by the noble Baroness, Lady Penn, in which she said that

“commonhold provides a potential way forward to move away from leasehold”.—[Official Report, 30/10/2023; col. 1181.]

That we know. She also promised to explain in writing the complications of abolishing leasehold in flats, to which she referred. Can the Minister explain what the delay is in implementing commonhold and what the complications are perceived to be?

My Lords, I can only reiterate what I have said. We are reviewing this, and it is a complex matter that has ramifications throughout housing law. We are looking at and reviewing the Law Commission’s recommendations, and we are working with the Commonhold Council. It is an important matter, and we will come forward with further steps on it in due course. It is a complex issue, and I am more than happy to meet noble Lords as we move into the Bill. If any noble Lords would like to meet me and my team, I am very happy to do so.

My Lords, the noble Lord, Lord Campbell-Savours, is participating remotely.

Is not the simple, unvarnished truth that, on leasehold for flats, the Government are under intense pressure from powerful institutions, which have sunk millions into freehold title, to duck the big decision and delay? The Government’s response is to leave it to the next Government to sort out. Is it not no more than an income stream for lazy investors, greedy developers and pension funds, all of which are squeezing the Government through political pressure to back off, while leaseholders pay the price? Labour will sort this out.

That is not the case. If noble Lords have listened to some of the things that the Secretary of State has said in the last many months, they will know that we are committed to changing this. It is complex, and we will take our time and do it properly.

It is very good to see the Minister back at the Dispatch Box. She has read out very faithfully the Civil Service briefing. However, we know from the Post Office scandal that Ministers are ultimately responsible and should take responsibility. Her Secretary of State was born and brought up in Aberdeen—and in Scotland leasehold was abolished in 2000 by a Labour and Liberal Democrat Government. Will the Minister go back to Michael Gove and say, “For goodness’ sake, if it can be done in Scotland, do it in England as well”?

I assure the noble Lord that I shall go back and take that message to my Secretary of State, but I can also say that we are looking at the Scottish model.

My Lords, the Law Commission reported in 2020, and I understand the Minister to say that the Government are taking their time—but four years is far too long. It cannot be so complicated that there cannot be a decision.

It is extremely complex; it affects many other legal issues to do with housing—with leaseholds and freeholds. We are looking at it as we move through the Bill. What we are putting forward is a very good first step, but it is not the end of the line. We will be working further.