Leasehold Reform — House of Commons, 2019-07-11
Topic: Housing
Justin Piers Richard Madders (Labour, Centre-left): I am delighted to take part in today’s debate on an issue close to my heart, having first been contacted by constituents back in March 2016 and having campaigned with the APPG of which I am proud to be the vice-chair under the wise stewardship of the hon. Member for Worthing West (Sir Peter Bottomley) and my hon. Friend the Member for Poplar and Limehouse (Jim Fitzpatrick). With the Leasehold Knowledge Partnership and the National Leasehold Campaign we have shone a light on these issues over the last three years. It has been a long journey. We have had some successes, but the further we have travelled the more deceptions, scams and greed we have uncovered, and the more it has become crystal clear that this has been nothing short of a national scandal As my hon. Friend the Member for Leigh (Jo Platt) mentioned, first there is the serious impact on mental health. A survey carried out by the National Leasehold Campaign found that 90% of leaseholders thought about their leasehold problems every single day and about a fifth thought of self-harm. We must never forget the human cost of all this It saddens me to say that while the Select Committee inquiry brought a sense of vindication and indeed hope among all those who campaigned on this issue, the Government response feels tepid in comparison. An example of that is the response to the Committee’s conclusion that leaseholders were treated as a source of steady profit, because it is not good enough just to say that the Government have noted the conclusions of the Committee. One campaigner said to me, "How do they think that makes us feel?" Having waited four months for a response, I agree We have had voluntary codes, which are doing some good, but that is not enough, and an example that has come to light recently in a new Redrow development just down the road from where I live shows why we need to do more to enforce these changes. The first phase of the development was sold on a leasehold basis—goodness knows why—but following some pressure locally, Redrow agreed that subsequent phases would be freehold and all those who had purchased leasehold properties would be able to purchase the freehold at 26 times the ground rent after two years; that was still too high, but at least Redrow was prepared to sell it back rather than send it to an offshore investor. Several constituents have now contacted me because after the offer was made they inquired of Redrow whether they would still need to pay the ground rent during that two-year period and were told they would not need to, but now Redrow is sending out bills and denying ever having said that. That is rubbing salt into the wounds, because it has also asked for a legal contribution to its costs, and is refusing to disclose any information about other covenants that might go with the land should it purchase. That, along with the fact that Taylor Wimpey has got rid of doubling ground rents but has still left itself in control of advantageous leases, shows me why we need legislation. We cannot have confidence that the developers, who, after all, are the authors of this racket, can put right the wrongs they have created I look forward to hearing the outcome of the Competition and Markets Authority investigation. There is plenty of evidence out there for it to conclude that this was a deliberately constructed income-stream effort. I have seen many documents talking about leases being optimised. It does seem to me that there was a deliberate strategy here.