Longevity may run in my family, but not to the extent of 1,000 years. The hon. Gentleman makes a good point and I am sure the Minister will seek to answer it in his summing up.
Introducing new rights for long leaseholders to buy out the ground rent without needing to extend the term of the lease is another extremely welcome move, as is removing the requirement for a new leaseholder to have owned their house for two years before they can benefit from the changes. The new right to require the freeholder to take a leaseback of non-participating units when a collective enfranchisement claim is made is also vital. We do not want to get to a position where people are deterred from enfranchisement because they cannot take on those who do not take on enfranchisement.
A new costs regime for enfranchisement and right-to-manage claims so that each party bears their own costs is vital. Far too often, the freeholder has sought to obtain their costs from the purchaser, which is clearly unfair and unjust. Moving jurisdiction for enfranchisement and right-to-manage disputes to the first tier tribunal and the leasehold valuation tribunal in Wales makes it much easier for parties to identify how they can bring about a dispute. I note the point the Chair of the Levelling Up, Housing and Communities Committee, the hon. Member for Sheffield South East (Mr Betts), raised when he said that freeholders often make it as difficult as possible for enfranchisement to take place.
The issue of transparency of service charges is vital. One of the benefits of serving on a Select Committee for a long time is being able to remember the reports the Committee was involved in, and I well remember an
inquiry into this issue. We wanted all service charges to be transparent and fixed to the cost of providing that service, as opposed to a figure plucked out of the air and then passed on to the person supposedly receiving the service. It is welcome to see that the Bill contains measures for minimum key financial and non-financial information to be supplied to those receiving the service on a regular basis, including through a standardised service charge and an annual report. That means leaseholders can scrutinise and better challenge costs if they are unreasonable.
Equally, replacing buildings insurance commissions for managing agents, landlords and freeholders with transparent administration fees stops leaseholders from being charged exorbitant, opaque commissions on top of their premiums, an issue that has already been raised in the debate. I welcome scrapping the presumption for leaseholders to pay their freeholders’ legal costs, which in my opinion is outrageous, as well as granting freehold owners on private and mixed-tenure estates the same rights of redress as leaseholders, by extending their equivalent rights to transparency over their estate charges and to challenge the charges they pay by taking a case to a tribunal.
All these measures are welcome, but there are many other areas where we need to go further. The promise to do away with leasehold—or fleecehold—completely was clear in the manifesto; in my view, that promise should be honoured, particularly on the sale of new-build flats. In London, they are now the most common property type; almost all flats are sold on leasehold basis, compared to just 6% of houses.
On the individual building firms, we have heard about Persimmon, but we should also remember Bellway, whose chief executive came in front of our Select Committee and told us—I repeat what they said almost word for word—that it was the company’s policy not to offer the freehold to leaseholders at the first opportunity. Instead, six months after building the properties and selling the leaseholds, it would transfer them to a finance company, which would go through the detail of all the charges it could make and then really leverage up those charges, and the finance company would refuse to allow the leaseholder to even consider buying the freehold. That was the policy of that company. I think Permission admitted that that was its policy too, and other building companies do exactly the same. That is a scandal and it should be stopped, and we should legislate for that.
Clearly, we all want to see the promotion of commonhold. However, as the Chairman of the Committee said, we need more education for individuals, so they understand not only their rights but the responsibilities they would take on with commonhold.
One concern that has been raised with me on several occasions is about what will happen, once this welcome Bill is on the statute book—we look forward to the amendments that are made—to existing leaseholders who bought their leaseholds in good faith but are not being dealt with properly or effectively. We need to ensure that squeezing out the bad practices of freeholders and managing agents, which are unfair to individuals, is part and parcel of the legislation.
There is also the issue of conveyancing. Most people who buy their first property pay the minimum legal costs they can get away with. As a result, they often are
not given proper advice about the consequences of their decisions. We need to ensure that individuals are given the opportunity to understand the responsibilities they are taking on and, more importantly, what will happen to them in the future if there are service charges involved.
Local authorities hold a huge number of properties under lease conditions and, if they want to sell the freehold to leaseholders, they are often among the worst sets of people to deal with across the country. I agree that a leaseholder should have the right of first refusal if a freehold is being offered. Will my hon. Friend the Minister give a commitment that, after we have engaged in consultations on service charges, the results of those consultations will be reflected in Committee so that we can strengthen the Bill?
Finally, I want to refer to a particular building in a constituency that neighbours mine. It has 13 floors and still has the old, Grenfell-style cladding. We all know the tragedy of Grenfell, but the owners of the building are refusing point blank to remove the cladding unless and until they are given planning permission to build on top of the building, so that they can sell more property to pay for the cost of remediating the cladding. The self-same company, Ballymore, although it has yet to submit a planning application, wants to build 29 blocks of flats, the tallest of which will be 29 storeys and the majority of which will be more than 20 storeys, at a density greater than Manhattan, Singapore or any other place in the world. That is a scandal. When the Secretary of State named certain building companies, he promised that if they refused to carry out the work that they should do, they would not be given planning permission to enable the development of more leasehold flats. I call on him to ensure that they are not given planning permission until such time as they are putting right what they have put wrong.
I pay tribute to all those who have fought for so long and so hard to achieve this limited reform. I will support the Bill, and I look forward to us taking forward further measures so that we can end the feudal system of leasehold once and for all.
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