Leasehold Reform (Ground Rent) Bill [Lords] — House of Commons, 2021-11-29
Topic: Housing
Robert Edward Jenrick (Conservative, Centre-right): My right hon. Friend gets to the nub of the issue. The debate, exactly as he says, was whether it would be better for a retired person looking to move into such a community to pay a somewhat lower purchase price for the property or the share in it that they were taking, and then, for as long as they live there, pay a ground rent, which might escalate at an unfair level, and a service charge. That is not a system that occurs in any other country in the world, including countries such as the United States that are far more advanced in their take-up of retirement properties. I took the view that it would be much fairer and more transparent for an individual to know exactly what they had to pay from the outset: they pay their purchase price and then their service charge, but they do not have to face escalating ground rent. That makes sense to me; I appreciate that there will be differences of opinion, but it was done as a matter of basic fairness I make it clear that the reason for the Bill’s very limited scope was to bring an end to unfair practices as quickly as possible. That was the advice of the Law Commission, which said that it was better to have a two-step process so that the iniquity of escalating ground rents could be brought to a close, and then we could move on to the much more complex piece of legislation that will inevitably take the Department and Parliament a great deal of time to prepare and pass. I think that that was probably the best way to proceed. Two further points emerge as a postscript to the events of the past few years. First, as my right hon. Friend the Member for New Forest West (Sir Desmond Swayne) said, we need to think about the conveyancing solicitors who gave or failed to give advice in the process of house sales. They failed in their duty to their clients: many constituents have come to my surgeries who were oblivious about the homes that they were buying. That applies not only in the situation we have discussed, but with respect to management fees, which may be very high or—as the right hon. Member for Alyn and Deeside (Mark Tami) mentioned—may involve charges, for example for putting up a satellite dish, building a conservatory and so on. Conveyancing solicitors need to take much greater care to bring such matters to the attention of their clients Secondly, the work of the Competition and Markets Authority must move forward at pace. It has already ensured that some of the major developers have settled, but I encourage all developers behind the sale of these properties, many of which they mis-sold to members of the public, to do the decent thing—the inevitable thing—and settle, so that the purchasers get some compensation for the issues that they have faced. I see that many are on the cusp of doing that, but I hope that the remaining ones will do so quickly I also hope that the Government will ensure that the second Bill features in the next Queen’s Speech and is delivered early in that Session. There is, as I have said, a great deal of work for the Department to do in preparing that Bill and ensuring that it is sufficiently comprehensive, but I think it extremely important that it does so, and that within the course of this Parliament we deliver comprehensive reform to leasehold. It should include 990-year leases, a simpler, cheaper enfranchisement process, ending marriage value, improving the position of leaseholders in the management of buildings, and ending—as has already been suggested—the building and selling of new houses as leasehold, because there really is no justification for that Finally, I hope that that Bill will look to the destination of a world beyond leasehold. That is the end point towards which we must work. I established the Commonhold Council to see how we could chart that course, and it seems to me that all the complex issues that are raised are surmountable—that is the evidence from the council so far. It also seems to me that commonhold will never take shape to any substantial degree in this country without a major Government intervention, which means indicating that it is our tenure of preference, or setting an end date for new leasehold properties. I favour the latter: I think we should say clearly that, beyond a certain date, no property, whether it be a flat or a house, should be built unless it is commonhold. I hope that the Bill to be introduced in the next Session will set that course, because I think it would be an important step towards ending a feudal system and helping us to move forward as a country.