My Lords, I am very grateful to the noble Lord, Lord German, for introducing this debate—and for the way he introduced it—and to the Minister for the time he gave some of us on Monday to express our concerns. He will therefore anticipate much of what I will say.
The Minister made it clear in that meeting that the purpose of this instrument is essentially to help the Government meet their housing targets. I completely appreciate that but, as he will know, I do not think this is the way to do it. In fact, I do not think it will help very much; it will make a marginal difference, as we have heard—possibly 800 homes a year, but probably far less. Of course, none of them will be affordable because it is permitted development.
This SI will guarantee uncontrolled profits for developers who are looking around at the scale of building in the centre of London, for example, thinking “I want some of the action” and taking opportunities to do just that. It will also damage the prospects and well- being of residents of existing residential blocks of flats who in different ways will be put at serious risk by this.
The impact statement reflects the imbalance in interests expressed. It reveals the scale of profit potential for developers, which has been estimated by the Leasehold Knowledge Partnership—which is very authoritative—to be between £20 billion and £40 billion. However, it is silent on the costs to the well-being and safety of residents, tenants and leaseholders from these massive interventions to existing buildings. It is also silent on the prospect of huge increases in the cost of enfranchisement, which will follow from the uplift in the value of a freehold. In this case, this policy absolutely cuts against what the Ministry of Justice wants, which is essentially a much simpler, more accessible and cheaper form of enfranchisement.
When launching the policy, the Secretary of State was, like other Ministers, silent on this point too. All he referred to was the opportunity for individual families and homes to add a storey. Yes, the policy is presented as one of gentle densification; there is nothing gentle about the impact on residents. I must declare an interest as a resident of a block of flats in London which is already threatened with such an upward extension. We have not been consulted; we do not want it; it is unpredictable and problematic in terms of buildability, safety and loss of amenity. We may well be faced with a choice between living in a building site—ceilings coming down and holes in the walls—or evacuating, and there is no compensation for the loss of peaceful enjoyment.
There will be resort to law, but only for people who can afford it. The Government knew from the start that this was an unpopular policy, as the noble Lord, Lord German, explained, and many of the issues raised were completely ignored. I suspect the Minister is discomforted by what he has inherited here; will he consider whether anything more can be done to protect residents by way of the planning Bill coming down the track, or can he commit to an early review of the policy rather than waiting the normal five years? Will he also seize the opportunity presented by the Law Commission to accelerate the reforms in leaseholding and look for ways to restrain the colossal prospects of developers? It is an unfair, unbalanced and inefficient policy, but we have a chance to do something about it.
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