My hon. Friend puts his finger on the key point. We will be looking to the Minister for reassurance on the 5 million leaseholders who will not be covered by future regulation and legislation and many of whom are disadvantaged and are looking to the Government to address those concerns. I will come back to that later in my contribution.
According to House of Commons Library figures, my constituency has the second highest number of leasehold properties in the country. In 2016, it had the highest proportion of leasehold sales, at 97%. Only a couple of years ago, DCLG figures calculated that there were 2.3 million leasehold properties in England and Wales. Under pressure from the LKP and others, the Department adjusted that figure to 4.1 million, which is quoted often, even by the Library, as being as a more accurate figure.
However, as the hon. Member for Worthing West mentioned, the LKP now estimates that there are 6.2 million homes provided with leasehold services. That means millions of homes and homeowners are vulnerable to inflated service charges, exorbitant insurance costs, a lack of tender transparency and poor standards of work—original or repairs—as well as refusal to recognise properly constituted resident or tenant associations, mismanagement of funds and other fundamental problems. I hope that the Minister will elaborate on how today’s announcement will help to address many of those concerns.
I want briefly to focus on the post-Grenfell fire safety costs being inflicted on many leaseholders. On Monday, I asked the Secretary of State for Communities and Local Government when he made his statement on Grenfell Tower and building safety whether he could tell us how many applications for the costs of cladding replacement and fire precautions, including fire marshals, have been registered with the first-tier tribunal by landlords and freeholders. In relation to meeting the costs of building safety, he said:
“I have made it clear that I expect private sector landlords to take the lead that has been shown by housing associations and local authorities.”—[Official Report, 18 December 2017; Vol. 633, c. 784.]
That is, that leaseholders will not be charged for the costs. David Orr, the chief executive of the National Housing Association, said in correspondence today:
“As freeholders of leasehold properties, our members”—
housing associations—
“have legal responsibilities as part of their leases and are therefore legally entitled to recoup the reasonable costs through service-charges”.
That is hardly a ringing endorsement of what the Secretary of State said.
Equally, information from the first-tier tribunal shows that 17 applications have been made to it. I would be grateful if the Minister confirmed whether those were to dispense with the full section 20 consultation process or to gain prior approval, under section 27A, of the amount the landlord proposes to spend on cladding and pass on to leaseholders. Ministers have been positive in asserting that costs for removal and replacement, and so on, should be borne by the owners, freeholders and agents, but the experience on the ground may be different.
In my constituency, for the New Festival Quarter development, HomeGround, Bellway, Pinnacle, Adriatic Land 6 and Family Mosaic have informed me—after many calls and emails—that they have secured confirmation that the works costs will be met, but the cost of fire marshals, originally set at £32,000 a week plus VAT, will be met by leaseholders. That figure, after much examination and pressure, is now down to just under £20,000 a week plus VAT, but will run from October to at least February 2018, and I suspect probably longer. My question to the Minister is this: does he think it is fair that residents should pick up the tab? It is obvious from previous statements that he does not, so what further steps can they take to protect themselves? To be fair, the housing association Family Mosaic is opposed to leaseholders footing the bill, but managing agents Pinnacle are not so inclined—certainly not so far.
Can the Minister tell us how many other blocks are affected across the country? Page 74 of Dame Judith Hackitt’s interim report, published this week, says:
“In a significant proportion of buildings visited, fire and rescue services had to issue notices”.
As I understand it, these notices are known as NODs—notices of deficiencies, not alterations, enforcement or prohibition notices. Can the Minister tell us—or perhaps write to us afterwards—how many NODs there have been, and how many developments have confirmed no costs to leaseholders?
Returning to the Government announcement today, the Minister will know that Lord Justice Bean, chair of the Law Commission, issued a statement last week, saying:
“We are delighted to be able to confirm that Commissioners agreed that a project on residential leasehold and commonhold should form part of the 13th Programme and this has been approved by the Lord Chancellor.”
He goes on:
“Our project will commence with a review of leasehold enfranchisement, commonhold and managing agent regulation.”
He concludes:
“On the basis of receiving funding from the sponsoring Government Department, we expect to start work immediately.”
The question for the Government is: have they confirmed that they have the funds to carry out that fundamental job?
In conclusion, leasehold is not only well past its “sell by” date or its “best before” date; it is clearly at its “time to do something now” date. The media have woken up
to the abuses. We have had more coverage of leasehold abuse in the past three to six months than we have had for the past decade. House buyers and mortgage lenders have woken up, by not buying where possible and declining to lend on many properties. The Government have reached a point where they need to be seen to be doing something, and they are. However, it is only a start. There are more than 5 million home owners now exposed and vulnerable, with more joining them in almost every new development. Urgent and fundamental reform is required. The Minister is just the chap to deliver. He has allies across the House; many he can see here today and others mentioned by the hon. Member for Worthing West. The fact that we have 130-plus members of the all-party group for leasehold and commonhold reform across both Houses demonstrates that this is a huge issue for millions of people across the country. They are looking to the Government to deliver for them. I look forward to the Minister’s response and other contributions in this debate.
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