Leasehold Reform

2. What steps his Department is taking to reform the leasehold sector.

15. What steps his Department is taking to reform the leasehold sector.

The Government continue to implement those leasehold reforms that are already in statute and to progress the wider set of reforms necessary to end the feudal leasehold system for good. In respect of the latter, the King’s Speech confirmed our intention to introduce the substantive commonhold and leasehold reform Bill, which will include fixes to the small number of specific but serious flaws in the previous Government’s Leasehold and Freehold Reform Act 2024.

I met residents of the Hucknall colliery development in my constituency who have been left frustrated by high estate management charges, a lack of transparency and the appalling performance of managing agent FirstPort. Many cannot understand their bills or how they are calculated. Some are paying different amounts for similar properties, and many were led to believe that roads and public spaces would be adopted, only to find themselves facing ever increasing charges. They have been misled and ignored. Does the Minister agree that homeowners should not be trapped in these so-called fleecehold arrangements? Will he set out what action the Government will take to ensure that managing agents, such as FirstPort, are properly regulated, transparent and accountable to the residents who are ultimately funding them? My residents continue to be treated with contempt.

I thank my hon. Friend for her advocacy on this issue. Homeowners should not be subject to unfair management charges or poor standards of service at the hands of managing agents, and I commend her for bringing this case to the House’s attention. Our recent consultation on enhanced protections for homeowners on freehold estates closed on 12 March, and we are analysing the feedback received alongside continuing to develop plans to strengthen the regulation of managing agents.

I thank the Minister for coming to speak to the all-party parliamentary group on leasehold and commonhold reform and setting out so comprehensively his vision for ending fleecehold for good. He has explained many of the things that need to be done to get us to that place, including fixing some of the flaws in the 2024 Act, which will enable enfranchisement to proceed. There is a great deal of interest in this issue, so can he set out when we will see the long-awaited consultation on valuation rates for enfranchisement?

My hon. Friend has considerable expertise on leasehold reform, and he is right to press for clarity on this important matter. To commence the Leasehold and Freehold Reform Act’s enfranchisement provisions, we unfortunately do need to fix the flaws he refers to through new primary legislation, and we will do so in this Session. In the interim, we will need to establish what capitalisation and deferment rates to set, and I am pleased to tell him that I am aiming to launch a consultation on those in the coming weeks.

A couple of weeks ago at my constituency surgery, I met my first victim of FirstPort. He and his wife live in a sheltered accommodation flat on the third floor, and the lift has been out of use for months. They are paying exorbitant management fees, and recently his wife had to negotiate three flights of stairs to get to an appointment while on bottled oxygen. This is not just a rip-off, but an accident waiting to happen. Will the Minister meet me and other concerned MPs to sort out what we can do about FirstPort?

As you will recall, Mr Speaker, this is not the first occasion on which I have had to mention FirstPort at the Dispatch Box. We need to drive up standards across all managing agents. I shall be more than happy to meet the hon. Lady and a group of other Members, as she suggests, to discuss this particular provider in more detail.

Shortly after becoming the MP for my constituency, I was contacted by Jeremy in Wimborne, who lives with his wife in a leasehold flat. In 2023, all the funds from the management company were fraudulently stolen. I have been working with the Financial Services Authority, but have been told that such issues are not covered, and that there is no route to redress via the financial services compensation scheme. While I welcome the draft Commonhold and Leasehold Reform Bill, will the Minister commit himself to developing it and working with the Treasury to bring property management companies into scope?

As the hon. Lady is—hopefully—aware, the last Government asked Lord Best to chair a working group to look at the regulation of property agents in the round. We are giving careful consideration to the recommendations in its report, with a view to strengthening the regulation of managing agents. If the hon. Lady will write to me with more details about that specific case, I will look into it.

I call the Chair of the Select Committee.

I thank the Minister for allowing my Committee to have a really good look at the draft Commonhold and Leasehold Reform Bill before it was laid before the House. I also thank my Committee colleagues and our specialist Clerk, Jack Edwards.

I was pleased to read in The Times that the Government may be willing to accept our recommendation of the implementation of a £250 cap on ground rents by late 2027. Can the Minister confirm that? Will he also update the House on when the Bill will finally be introduced? As he has heard from Members on both sides of the House, this continues to be a pressing issue for many leaseholders. People continue to be ripped off. The earlier the Bill is put before us, the sooner we can bring this leasehold nightmare to an end.

I commend my hon. Friend, the other members of her Committee and its officials for the thorough piece of work that they have done in scrutinising the draft Bill: that will make for a better Bill when it is introduced.

My hon. Friend will forgive me if I do not comment on press speculation but merely build on what I said in my letter to her of 8 June, namely that the Committee and the Government are of one mind when it comes to the necessity of making progress with the substantive Bill as quickly as possible so that we can transform the lives of leaseholders. While I remain committed to ensuring that any Bill put forward is robust so that we do not have to fix problems in primary legislation, as we had to in the case of the 2024 Act, I am seized of the urgency of both presenting the Bill and commencing the ground rent provisions as quickly as possible.

I welcome the measures introduced in England and Wales through the 2024 Act to improve the transparency of service charges. Unfortunately, however, in Northern Ireland leaseholders have limited control over service charges imposed on them, and under the current legislation they have limited means of challenging the underlying justification for those charges. The Minister is always a very good Minister who always gives me a very good response, so I am looking for one today. Will he liaise with his colleagues in Northern Ireland to support the introduction of similar protections in Northern Ireland to ensure that leaseholders there are not left exposed to unjustified charges?

The hon. Gentleman is as charming as ever, but all I can say to him is what I say in respect of this and many other issues: I am more than happy to help our counterparts in Northern Ireland to learn from the very good work that this Government are doing in relation to leasehold reform.

I welcome the new shadow Minister to the Front Bench.

Thank you, Mr. Speaker.

Like millions of people across the country, I am a leaseholder. We have been waiting nearly two years since the Government promised to improve the system. While the Government dither, leaseholders are being ripped off with higher service charges from companies such as FirstPort. We need action, not words, to take on these bad companies. Every MP in this House is aware of the situation, so can the Minister tell me why the leasehold Bill does nothing to hold management companies to account?

As I have said to the hon. Gentleman on previous occasions, I have a great deal of respect for him, but he has some front in standing up and accusing this Government of dithering when it comes to leasehold reform. The Conservative party had 14 years in which to end the system, and did not do it. It raised expectations, and let leaseholders down. We are going to end the system within a Parliament. We are going to strengthen the regulation of managing agents. We will respond to the Select Committee, and will set out further details in the near future.