I am pleased to follow the hon. Member for St Albans (Mrs Main), who, apart from her other duties in this place, very ably leads the all-party parliamentary group on Bangladesh, on which I am pleased to be one of her vice-chairs.
I want to speak on new clauses 3 and 4, which stand in my name. I express my appreciation to Mr Glenn McKee in the Public Bill Office for his expert assistance in drafting them. I thank the Leasehold Knowledge Partnership for its encouragement in making sure that we have new clause 3 on leasehold reform. Poplar and Limehouse has the second highest number of leasehold properties in the country, so this is a matter of great constituency significance. In relation to new clause 4 on tenants’ rights, 50% of the properties are social-rented, so that is also a big issue locally.
I am pleased that the Government have recognised the scale of the leasehold reform issue. The hon. Member for Worthing West (Sir Peter Bottomley) has led on the issue, having campaigned on leasehold reform for many years. I am pleased to support him, backed up by the Leasehold Knowledge Partnership, which is organised by Martin Boyd and Sebastian O’Kelly. The hon. Gentleman and I have arranged a number of open forums here at Westminster for parties interested in leasehold reform. They have been attended by professional bodies, individual leaseholders and others who have raised these matters with the civil service and with Government. I am grateful to the Minister for affording us a number of opportunities to meet him and civil servants at DCLG to explore these issues and try to identify a way forward.
One of the major successes that we have had in the past 12 months is that although the Government initially estimated that there were between 2 million and 2.25 million leaseholders, it has now been recognised that there are now at least 4.5 million. That demonstrates that this is a bigger problem than perhaps the Government thought it was before. Of course, that does not take into account the nearly 2 million leaseholders of former council properties who exercised right to buy or who subsequently bought those properties, so we are talking about nearly 6 million households, which means that a significant number of our citizens are affected by leasehold regulation.
The issue affects my constituents, among whom are not only very wealthy professionals who live in smart and very expensive properties in Canary Wharf, but a number of pensioners in the east end who exercised right to buy and who own former council properties. They clearly do not have access to the resources, assets
or finances available to some of my constituents. The issue also affects retirement homes. Leaseholders are represented in every strata of society, from the poorest right the way to the richest, so nobody is excluded from being exposed to the vulnerability of living in a leasehold property.
I use the word “vulnerable” because the lack of protection and the informal dispute resolution procedure, which is abused by unscrupulous freeholders who employ high-powered barristers, affects ordinary leaseholders, whether they be professionals, rich or poor. I see that Conservative Members are smiling because they are either vulnerable leaseholders or freeholders. I will not say that they are unscrupulous, because that certainly does not apply to the hon. Member for Bromley and Chislehurst (Robert Neill), who I know, as a fellow West Ham United supporter, would never be unscrupulous when it comes to his properties. There are major anomalies and weaknesses in leasehold regulation, including the amount paid in service charges, as well as insurance, ground rent and forfeiture charges, all of which mean that leaseholders are vulnerable to unscrupulous freeholders. Sadly, there are too many such freeholders, even though they are in the minority.
It is appropriate to recognise that the sector has been attempting to improve its performance and raise its game with a new voluntary code. Significant progress has been made, but leasehold reform should be on the Government’s radar, especially given that leasehold has been increasingly used over many years. Six major statutes, a number of statutory instruments and dozens of sections of other Acts of Parliament have dealt with the issue. Previous Conservative Administrations—notably in 1985, 1987 and 1993—and Labour’s Commonhold and Leasehold Reform Act 2002 all tried to address that which is recognised collectively as an area that needs attention, but we have signally failed to protect leaseholders. I would be interested to hear the Minister’s response.
New clause 3 proposes to abolish leasehold by 2020. I hope—I am sure that other colleagues do, too—that it will galvanise the Government into asking why nothing has happened in respect of commonhold. I understand that the Government have been having key discussions on moving responsibility for commonhold legislation, which still falls under the Ministry of Justice, to the Department for Communities and Local Government and the housing department. It would make sense to place such responsibility for housing in that Department. At the end of the previous Administration, with the general election approaching, all three main political parties supported moving that responsibility to DCLG, but there has been no movement. I would be grateful to hear the Minister’s response.
New clause 4 is far less complex, but I am disappointed that there has been no movement on the issue, because it is very much one of localism and community empowerment. One of the few existing protections for leaseholders—it is, however, very difficult to implement—is the right to sack property management companies responsible for the upkeep of residents’ homes. There is provision within legislation for ballots to take place, and a simple majority allows residents to look for a new property management company to manage their properties. However, as I have said, it can very seldom be used.
In recent decades, many thousands of tenants in my constituency have voted in stock transfer ballots to move responsibility for their homes from the council to
housing associations. That was one of the mechanisms that the Labour Government between 1997 and 2010 used to deal with the 2 million homes we inherited that were perceived as being below the decency threshold. That led to upgrades of nearly 1.5 million of those properties by 2010, including new kitchens and bathrooms, double glazing, new security and all the rest of it.
Most such schemes were successful. However, in a small minority of transfers, the offer provided by the housing associations when seeking the support of local tenants was not delivered. There is no provision for those tenants to express their disappointment and to sack their registered social landlord. This is a basic element of consumer protection. For any product that one buys on the open market, there are protections in consumer law—the ability to return the product, and to seek a refund, redress or compensation—but for a home, and a council tenant who has voted to move to a new registered social landlord, there is nowhere else to go once they have been transferred. A leaseholder at least has such a provision, even though it is rarely used.
With my new clause 4, I am trying to introduce an provision—with, I suggest, a five-yearly review—to give council tenants an opportunity to say to the housing association or their registered social landlord that is supposed to deliver the services for which tenants are paying, “You are not doing a good enough job. If you don’t up your game, we will have a ballot in five years’ time. We can then sack you and move to a new housing association, go back to the council or set up a tenant management organisation.” That would basically give tenants the right to hold their housing association to account.
The current protections are to complain to the Housing Ombudsman Service, the Homes and Communities Agency or the regulator. It is very difficult to go to such lengths, however, and the regulator is very reluctant to transfer ownership and responsibility from one housing association to another. New clause 4 suggests that tenants should have the right, when the registered social landlord or housing association is not delivering, to say, “You’re not doing a good enough job. We want somebody else to manage our property.”
On new clauses 3 and 4, one of which is very complex and the other relatively straightforward, I am very disappointed that the Government have not seen it to be in their interest to introduce such provisions. I am sure that there will be some interest in them when the Bill makes progress in the other place. I will be very interested to hear the Minister’s response to the points I have made in supporting my new clauses.