I pay tribute to hon. Members who are present for the debate, and in particular the hon. Member for Worthing West (Sir Peter Bottomley) and my hon. Friends the Members for Poplar and
Limehouse (Jim Fitzpatrick) and for Ellesmere Port and Neston (Justin Madders). Those longer-standing Members have done much groundwork on the issue.
I come to the matter we are debating as a new MP, elected in June; it was one of the first issues that I encountered in my surgeries. It was the one on which the most people expressed concern. They were people who had recently bought new-build properties; having been told that they would be able to buy the freehold in two years and that that would not be a problem, they had since been informed that it would cost at least twice, and sometimes three times, what they were first told. They felt, as many Members have said in the debate, ripped off. Many are first-time buyers, who had been renting a home for years and saved up every last scrap so that they could afford a deposit to buy a house and feel that they were not being ripped off any more; however, when they purchase a leasehold home they still feel that they are under the cosh and do not have control of their home or the fees charged on it.
I welcome the response to the consultation, which the Government issued today. I thank the Ministers concerned. I am particularly pleased about what it says about ending the sale of houses on leasehold as soon as possible. That is important in areas such as mine, where there is a range of homes for sale, either on leasehold or freehold, and people who want to buy a home are confused about what they should do. Often they find, on approaching a sales team, that the team will try their best to sell the property on leasehold, and that only if they persistently refuse will buyers, in some cases, be offered the freehold. However, hundreds of people have already purchased homes without being aware of that, and others were not allowed to buy the freehold even if they pushed to do so. They now feel that their situation is difficult.
I am concerned that the consultation response says that, where land is currently under a leasehold that is being developed, the sale of leasehold homes will still be permitted. I hope that the Government will look at that, because there are many instances in which developers buy rights to develop on certain land, and that can be deemed a leasehold in kind. There are not many estates in my area where that has not happened; so I hope that the Government will look seriously at what constitutes a lease and make sure that that is not a loophole for developers to get round, although I recognise that they say they will make sure that no new leasehold is occurring on land.
My major concern is the existing leaseholders, who are in a poor predicament having saved up and put all their savings, and now their income, into their mortgages. They face charges that they were not aware of, as well as a disproportionate escalation in fees for buying the freehold. I echo what my hon. Friend the Member for Ellesmere Port and Neston said about sharp selling practices and thank him for the work that he has done to expose what happens when, if solicitors are not quite being forced on buyers, certainly, in my constituency, buyers have been told that the solicitor recommended by the developer is the only one who can manage the Help to Buy system in the east midlands and manage a sale quickly enough for buyers to keep the incentives of carpets and kitchens. People really feel they have been led up the garden path. I hope that the Government will make proposals on that as soon as possible.
I welcome the consultation response about making sure that there is a set formula for buying freeholds by summer 2018, with legislation as soon as can be arranged. However, there are people now in the predicament that they bought a leasehold home and, for various reasons, need to sell it. Some may need to move to assist elderly relatives who need care, or to follow career prospects. Will the Minister consider the possibility mentioned by the hon. Member for Worthing West of reforming the system by which at the first tier tribunal the leaseholder must meet their own legal costs and those of the freeholder? That is used to rip off leaseholders; freeholders instruct Queen’s counsel and rack up the legal charges. I hope that such a reform might be a short, quick-fix solution that would help people who are now in a predicament.
I welcome what has been said in the debate and the response to the consultation, and hope that Members on both sides can work together to make it a happier new year for leaseholders in all our constituencies.
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