UK Parliament / Open data

Leasehold Reform

Proceeding contribution from Wendy Morton (Conservative) in the House of Commons on Tuesday, 23 May 2023. It occurred during Opposition day on Leasehold Reform.

I think for many years, many of us thought leasehold was an issue affecting London and other cities across the country, where there are big blocks of flats, mansions and apartments, but that is not the case. In the past 30 or 40 years, many properties have been built on a leasehold basis. In fact, in 2020-21 there were an estimated 4.86 million leasehold dwellings in England, equating to 20% of the English housing stock. Of those 4.86 million, 2.82 million, or 58%, were in the owner-occupied sector and 1.79 million, or 37%, were privately owned and let in the private rented sector. The remainder were owned by social landlords.

That gives an indication of the size of the sector and the number of constituents who could be affected. My office undertook research and found that in the west midlands, 5.7% of houses and 56.4% of flats—or the equivalent of 14.4% of the total dwellings in our region—are leasehold. In my constituency we have many residents and homeowners who have contacted me to raise this issue. One of the things that concerns them most is the uncertainty about what is happening and when. They need some clarity and they need it soon.

I have casework relating to a number of leasehold properties, both apartments and houses. I am sure Ministers will have seen some of my casework of late; I must admit that I regularly put in parliamentary questions asking for an update on the leasehold reform Bill and I will continue to do so. I can see the Ministers on the Front Bench nodding, and I know they take the matter seriously.

In our manifesto, we included a pledge that we would continue our work on reforms to leasehold, including implementing our ban on the sale of new leasehold homes, restricting ground rents to a peppercorn and providing necessary mechanisms of redress for tenants. I welcome the progress to date, particularly the Leasehold Reform (Ground Rent) Act 2022, which put an end to ground rent for most new long residential leasehold properties, but we must keep it going.

My reason for speaking in this debate is to highlight the cases in my constituency, not only so that my constituents know that I am raising those issues in this place, as they would expect me to, but to nudge my right hon. and hon. Friends on the Front Bench to continue to take this issue seriously. We know that the formal process of extending a lease must be made easier and cheaper. I suppose I must declare an interest here, Mr Deputy Speaker, because before coming into this place, I went through the really painful process of trying to extend the leasehold on our apartment. It is not something I would want to go through again in a hurry.

Why do we need to speed up progress? Doing so would help to remove the uncertainty that constituents such as mine face, especially since the problem becomes more and more apparent with every year that goes by. For every extra year that reform takes, more people will face the dilemma: “Should I extend or should I not? Should I wait for action or should I take action now? Will it cost more now or will it cost more later down the track?”

As a lease reduces, there is a question of the impact on sales and mortgages. That is another question I am regularly asked, because the shorter the lease, the more difficult it is to get a mortgage and the more difficult it can be to sell a property. Most lenders will not lend on properties with a lease under 70 years and will want the lease to be extended for at least 40 years after the end of the mortgage term.

As I mentioned earlier, the process of negotiating a leasehold extension and working through the whole process of marriage value is anathema to most people. I had no clue about it until I started going down that track, but people have to engage two sets of solicitors and pay for both of them, and it can be difficult and stressful. Obviously, when they have gone through it, they have the benefit of having extended their lease, but it is time that we continued to make some progress on this issue.

On the broader point, as we have heard from others today, there are questions to be addressed about the need to ensure the independence of legal advice. That is something else that constituents have raised with me, because there are developers who suggest using a certain, supposedly independent, legal adviser. That cannot be right at all.

In short, for too long leaseholders have really felt that they are being held to ransom by freeholders. They are being left to pay unjustifiably high ground rents, exorbitantly high costs for leasehold extensions and management charges that go up and up, and they have very little control over or input into them.

My request in this debate is simple. Can the Minister in her winding-up speech confirm—I believe it is true, but I would like to hear it from the Dispatch Box today—that the Government remain committed to making the leasehold reform changes that constituents such as mine in Aldridge-Brownhills and right across the country so badly need and deserve? Can we get a move on with it, and see some progress this year?

2.29 pm

Type
Proceeding contribution
Reference
733 cc184-5 
Session
2022-23
Chamber / Committee
House of Commons chamber
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