I beg to move,
That this House has considered leasehold and commonhold reform and leasehold abuses.
May I first say that we are grateful for your chairing the debate, Sir David? We hope that the next time we debate this issue, it will be on the Floor of the House. The all-party parliamentary group on leasehold and commonhold reform, which now has more than 130 members from both Houses, is probably one of the largest and most active all-party parliamentary groups that there is. One reason for that is that leasehold abuse is a desperate problem, which I am grateful to the Minister for recognising through his presence in the Chamber.
We have been able to be so active because of the work of two people in particular, Martin Boyd and Sebastian O’Kelly, from the Leasehold Knowledge Partnership—LKP. They also help run the good cause campaign, Better Retirement Housing, which was once known as Carlex—the Campaign Against Retirement Leasehold Exploitation. The debate will not focus primarily on the elderly, although it could, as their exploitation is a big problem. It will also not focus primarily on park homes, another form of tenure through which people can be exploited by scoundrels, crooks, rogues and those who exploit the law by making those who are badly off even worse off; through some legal stratagems, they can manage to take away the last assets that some people have.
Leasehold is a form of residential tenure that has been abolished in most places around the world and should be ended in this country. When I say this country, I basically mean England, or England and Wales; the situations in Northern Ireland and Scotland are different, and it needs to change here. That was recognised by Martin Boyd and Sebastian O’Kelly when they started asking Parliament about the plans to bring in commonhold ownership, which should have taken away half the opportunities for exploitation. It should have eliminated the problem; it would not be a question of a small fix —it would be solved.
As it happens, since Parliament passed the Commonhold and Leasehold Reform Act 2002, things have gone wrong. We have not had the growth of commonhold, which in Australia might be called strata title. The reason for that is that the responsibility for it was left with the Ministry of Justice, and of all its concerns, the condition of people living in leasehold homes was not one.
In the years since Parliament last gave serious attention to this issue, we have had a succession of Governments from both parties, and a coalition Government, and we have had Housing Ministers who I think have not been properly advised, because their officials did not actually understand the scale of the problem. At one stage, people thought there were about 2.5 million residential leasehold premises in the country. It is quite clear from
the work Martin Boyd and Sebastian O’Kelly have done —with the help of Sir Nigel Shadbolt, Sir Tim Berners-Lee and the Open Data Institute, to whom I pay credit—in getting information that is publicly available and putting it together that the actual number of residential leasehold premises is between 5 and 6 million.
I do not want to get myself too involved in some figures in the Department’s announcement at one minute past midnight today. I do not think they have the number of new leasehold houses right, but that is immaterial to the debate. What matters is that what was an anomaly in the north-west—selling houses as leaseholds when they could be sold as freeholds—began to spread. To those who say that the leasehold house was sold at a lower price than the freehold house, LKP’s work shows that that is not correct. It was just a way of exploiting leaseholders, who thought that it was a normal way of taking on a home.
Of course, when the ground rent on a leasehold was a peppercorn, there was no problem at all. When it is £10 a year and doubles every 20 years, from £10, to £20, and to £40, people cannot see the problem. However, when it starts at more than £200 and doubles every 10 years, that is a 7% increase per year.