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MPs call for government action on existing leaseholds

A commons debate held yesterday resulted in MPs of all stripes calling for legislative action to help leaseholders dealing with “onerous” fees and rents.

The session was chaired by Clive Betts MP, who opened proceedings by referencing several “scandals” uncovered by a report published by the housing, communities and local government committee back in March.

These scandals included the withholding of leasehold contract details to new buyers and excessive fees and charges. Betts also touched on the proposed commonhold reform, of which “the government ought to be a bit more enthusiastic than perhaps they have been so far,” as well as bemoaning a lack of action on the government’s part more generally.

Regarding existing leasehold owners, Betts said that, “[the government has] agreed to a ban on leasehold on new houses, which is certainly needed. In the case of future leaseholds, there should be a peppercorn rent; the government’s original proposal was a £10 charge.

“We have asked for clear standardisation for leaseholders when they buy their properties. The government [has] accepted the recommendation in respect of new purchases, but not for resales. We may need to return to that issue, because it is important,” he added.

Geoffrey Clifton-Brown MP agreed with much of the opening statement, saying that, “we need to look carefully at the purchasing system in this country, and the government need to work with the Law Society to ensure that all solicitors make it explicitly clear to their prospective purchasing clients what they are letting themselves in for. In my experience—I do not wish to knock either my own profession or the legal profession—they tend to be fairly blasé about inquiring into what the arrangements are for managing these common parts, which can be very expensive.”

“It appears that we have 18th-century practices operating at 21st-century prices and, more fundamentally, that a person’s home is not really their own, with the freedom to do within it as they please,” added Rosie Cooper MP.

“Everyone knows that people are being charged to receive emails. It takes four weeks for someone to come. There are no phone numbers. People pay extortionate prices to carry out work on their own property. People are being misled, being told they can buy the freehold in a couple of years’ time for a few thousand pounds, only to find the freehold has been sold on, with no first refusal being given to the leaseholder.

“Some do not even offer direct debit, so those who forget to pay their twice yearly charge are slapped with further charges for late payment. People are sent threatening and heavy-handed letters,” she added, before concluding that, “we need leasehold reform now. It is in the government’s power to do it now, and households right across the country demand that they do it now.”

Other MPs who agreed with the general sentiment comprised Bob Blackman MP, Peter Bottomley MP, George Howarth MP, Fiona Bruce MP, Maria Eagle MP Matthew Offord MP, Alex Chalk MP Jonathan Reynolds MP, Marcus Jones MP,Chi Onwurah, Jo Platt MP, Jim Fitzpatrick MP, Liz McInnes MP, Justin Madders MP, Lyn Brown MP, and Sarah Jones MP, who challenged Heather Wheeler MP, current under-secretary of housing, communities and local government to respond to some of the issues raised.

Wheeler’s response include her saying: “On the leasehold house ban, I am pleased with the profound impact our original announcement and the work of campaigners have had on the market. When we made the announcement in 2017, 11 per cent of new build houses in England were sold as leasehold, whereas today the figure stands at 2 per cent.”

Regarding a lack of government action on legislating against existing round rent terms, Wheeler citied “problematic human rights implications” before adding that, “I firmly believe that doubling ground rents are unacceptable and should be varied, which is why we are encouraging the sector to voluntarily vary leases and show that it is willing to solve the problems of its own creation. I have been encouraged by the response we have received.”

However, Betts closed the session by saying that, “The minister said that we would get answers. I do not think that any of the answers went beyond what the government have already said.

“I think that the clear message to the government today is that what commitments they have made so far do not go far enough. There needs to be further action.

“There is a need to end onerous ground rents not just by voluntary agreement but legally. There is a need to end onerous permission fees not just on new properties, but on existing properties. We want the introduction of a clearer and simpler enforcement enfranchisement regime; action to achieve clarity and transparency in service charges and the process of buying leasehold properties; improvements and promotion of commonhold as the primary means of tenure for flats; and, finally, for heaven’s sake, an end of forfeiture.

“If anything goes back to the feudal age, that is it, and ending it would be a clear symbol that we will have real action in this area.”

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