Leasehold Reform

May I start by sending my thoughts and prayers to everyone involved in yesterday’s incident at Southend airport?

We remain committed to giving leaseholders greater rights, powers and protections in respect of their homes, and bringing the feudal leasehold system to an end. We have made significant progress, implementing the Leasehold and Freehold Reform Act 2024 and, this month, launching a consultation to strengthen leaseholder protections when it comes to charges and services. We are delivering, but we will go further; we will publish a draft leasehold and commonhold Bill later this year. This week, the High Court will hear challenges to some of the enfranchisement reforms in the 2024 Act; we will defend those challenges robustly, and will await the Court’s judgment.

I have been contacted by more than 300 residents in Peterborough about problems relating to FirstPort’s leasehold and management service charges. They face unfair charges, a lack of transparency, bad communication and poor services. Residents in, for example, Hammonds Drive and Manor Drive are fed up with getting a second-class service. What is my right hon. Friend doing to help residents in places like Peterborough get the peace of mind and justice that they so deserve?

My hon. Friend is absolutely right to raise this issue. Many Members from across the House have found that too many leaseholders suffer as a result of poor-quality services from managing agents. We are consulting on proposals to strengthen the regulation of managing agents, including a proposal to make minimum professional qualifications mandatory.

My constituent Ed, a leaseholder in Monument Court, Stevenage, has been trapped for years in an unsellable flat after the building failed its EWS1 assessment because Higgins Homes had not followed its own architectural plans. He has faced uncapped and unregulated service charges and utility billing, and the threat of disconnection, while seeing the saleable value of his property decrease by more than £70,000. Will the Secretary of State consider introducing a statutory route through which people like Ed can pursue legal action against a developer without bearing the full cost burden?

I am very sorry to hear about Ed’s situation. The Building Safety Act 2022 protects qualifying leaseholders from uncapped costs relating to non-cladding remediation. When remediation is not progressing, leaseholders can apply to the tribunal for remediation orders, which can compel relevant landlords to fix relevant defects in their buildings, as well as for remediation contribution orders, which require developers to pay towards the costs of the remediation.

At Fletton Quays in my constituency, managed by Gateway Properties, leasehold residents are reporting that service charges have increased by as much as 150% in the last two years. Flats are under warranty and faults should be fixed by Weston Homes, which built the property, but instead are being fixed by Gateway, which has increased the service charge and, I understand, has even been sending separate bills on top. I know that the Government have been keen to address issues relating to high service charges and the need for financial transparency for leaseholders; can the Secretary of State provide an update on that work?

Unjustified service charges are wholly unacceptable, and I strongly recommend that the homeowners obtain legal advice. The Leasehold Advisory Service, for instance, gives free legal advice to leaseholders. Developers are typically responsible for rectifying defects within the first two years of the warranty period; even if no warranty claim is made, developers are still liable, and should not pass charges on to leaseholders. Unreasonable service charges may be challenged at the first-tier tribunal.

Through the Government’s landmark Renters’ Rights Bill, we are doing much to address the inequities of the rental sector for constituents in Bracknell and across the country—for instance, we are extending the right to request a pet. Now the Government are turning our attention to reforming leasehold. My right hon. Friend will know that many leaseholders are also blocked from having a pet by a clause in their head lease. What can we do to deal with that?

I know that my hon. Friend has already spoken to the Minister for Housing and Planning about this issue, and that those discussions will continue. As you well know, Mr Speaker, pets bring joy, happiness and comfort to their owners, while also supporting their mental and physical wellbeing. We have strengthened the rights of private tenants to keep pets in the Renters’ Rights Bill, and we will of course keep the position of leaseholders with pets under review.

Leasehold residents of Marlborough House in Maidenhead found that their developer had entered liquidation, leaving £250,000 in section 106 payments outstanding, as well as massive defects in the development. Leaseholders fear that the authorities will ask them for the section 106 money, and that the costs of finishing the development will fall on their shoulders. Given that some developers have poor track records, with dozens of companies going into liquidation, how can we strengthen leasehold legislation to ensure that future leaseholders do not have the same problems as those in Marlborough House?

It is frustrating when we hear of situations like this, which is why it is our intention to publish the draft leasehold and commonhold reform Bill in the second half of this year. I hope the hon. Member will contribute his views on it, so that we can build on the proposals that the previous Government brought forward. They needed extra work, as I mentioned in my opening answer, but hopefully we can start to deal with this issue, so that leaseholders get the protection that they deserve.

At a recent surgery, a constituent brought to me the leasehold problems that she is experiencing with her housing association. Despite paying a considerable amount in service charges, leaseholders have been whacked with a £7,000 bill for improvements to the property’s roof, with the expectation that they will pay within 30 days of completion. There was limited consultation, and leaseholders had no choice in who carried out the works. What does the Secretary of State advise my constituent to do?

Again, the consultation exercise that we are undertaking is about how we deal with such matters. I hope the hon. Member will work with us during the consultation period, so that we can bring forward the draft legislation and get this matter right. We hear these stories time and again, and we need to fix this problem and protect leaseholders.

I thank the Secretary of State for her answers. The issues with the leasehold system, and the need for legal protection for everyone, have been set out in debates in Westminster Hall and this Chamber, and I very much welcome the Government’s commitment to changes. The leasehold system here is slightly different from that in Northern Ireland, but the legal protections need to be the same. I have a very simple question for the Secretary of State: will she have discussions with the relevant Minister in Northern Ireland to ensure that what happens here can happen for us in Northern Ireland, and that we will be given the same protection?

The hon. Gentleman is absolutely right. We do work with the devolved nations, not just to show them what we are doing, but to learn from them. We have seen that the housing situation is not an England-only situation; the issues affect the whole of the UK, and we all need to learn from each other. Hopefully, the reforms that we are bringing through will be informed by the devolved nations, but we will also have some learnings for them. We need to work together in lockstep to protect people, wherever they are in the United Kingdom.