St Mary Magdalene and Holy Jesus Trust: Leasehold — House of Commons, 2017-11-01
Topic: Housing
Alok Kumar Sharma (Conservative, Centre-right): I always try to respond to the issues that are raised in a debate, and I hope I will do so in this case too Many leaseholders have concerns about fairness and transparency within the leasehold sector. Our housing White Paper, and the all-party parliamentary group on leasehold and commonhold reform, have helped to move leasehold issues up the political agenda. The White Paper identified pressing areas for reform. We have talked about galvanising the house building market overall, but specifically in terms of leasehold. In our recent consultation, "Tackling unfair practices in the leasehold market", we consulted on whether new-build houses should be sold as leasehold and on the issue of onerous ground rents The consultation, as the hon. Lady pointed out, has closed. It clearly struck a chord with consumers and leaseholders. As she said, we have received over 6,000 responses, many of them extremely detailed. My officials are currently analysing those responses. I would like, before the end of the year, to announce the Government’s response to the consultation and propose reforms to be taken forward Let me now turn to the hon. Lady’s direct concerns about charitable organisations such as the St Mary Magdalene and Holy Jesus Trust. I understand that, as she set out, a small number of individuals have in the past acquired leases of houses on the St Thomas estate and now wish either to extend the lease or acquire the freehold. The freehold is owned by the Mary Magdalene and Holy Jesus Trust, and the head lessee is Home Housing Association. Both organisations have charitable status. Unfortunately, as she outlined, the leaseholders have not been able to enfranchise—that is, purchase the freehold interest—or, indeed, extend their leases. The frustrations and anxieties that this has caused are clearly evident in the stories that she relayed—particularly, as she pointed out, for families who wish to sell and relocate. The remaining terms on a lease may well mean that a prospective purchaser will find it very difficult to secure a mortgage So, specifically, what I am going to do? I have asked my officials to be in direct contact with the trust to see what help can be provided to leaseholders with regard to their desire to exercise their right to buy in terms of the freehold. We will cover what flexibilities there may be for the trust to apply existing legislation to help to resolve some of the issues raised by the hon. Lady, especially where the trust and the leaseholders are both willing and agree to progress either lease extensions or the purchase of the house freeholds. Returning to the wider recent consultation, we will look at the responses and also consider issues on the disposal of charitable leasehold homes. This will need to show fairness to the needs both of the freeholder and the leaseholder, and also strike a balance with the needs of charities to remain on a sustainable footing to continue their good work. It may be the case that the hon. Lady’s constituents were not fully informed about their rights and responsibilities when they acquired their leases, especially the whole issue of enfranchisement exemptions attached to these particular charitable leasehold properties. That leads me to another general area of concern about the transparency, or lack of it, in the way some leasehold property is marketed—in particular, whether there is clarity over the terms of lease agreements at pre-purchase, and whether sales teams are working in the best interests of prospective leasehold purchasers I will, as part of our wider work on leasehold reform, consider whether changes to legislation are required to improve transparency and fairness for leaseholders who want to enfranchise, where their freeholder is a charity and both parties agree that a lease extension or enfranchisement is mutually beneficial. I also want to ensure that the future marketing of leasehold homes, whether for private or charitable provision, is clearly promoted and advertised by charitable organisations to their beneficiaries. I hope that my comments have provided some comfort to the hon. Lady and her affected constituents. My Department will absolutely continue to liaise with her.