It is a great pleasure to follow the noble Lord, Lord Blencathra. In relation to Amendment 115, the noble Lord discussed the 11-metre question. The emphasis is often on whether there is less risk in safety terms under or over 11 metres. For me, that slightly misses the point—which is that, regardless of whether you have resolved that, the problem is that freeholders are still charging and doing remediation work on buildings under 11 metres. Therefore, there are costs that those people who live in buildings under 11 metres have to pick up. The lecture that it is less risky over 11 metres really needs to be given to the freeholders not, necessarily, to the leaseholders—but that does not really help us, I think.
More generally, this is such an important group of amendments. The noble Baroness, Lady Pinnock, passionately reminded us of the context. It is true that being a leaseholder today is no longer just a description—it has almost become a full-time job in terms of fending off more and more financial demands and getting on top of the law. If you go and meet a group of leaseholders, they are having the kind of discussion about the ECHR that we have just heard from noble Lords, because they are trying to get on top of all these details and technicalities. It has become an overriding source of worry and anxiety, and genuinely—rather than just being about the status of home ownership—it has become a hellish state of affairs. So they need anything that can resolve that, and that is why this Bill is so important and this group of amendments matters.
My amendment in this group is a tiny, modest amendment that relates to evaluations. Amendment 165A in my name asks that any evaluations used to decide on caps for those still being charged for remediation should be looked at in a slightly different way. I do not want anything to be paid—I would go with peppercorn or nil—but if there are caps deployed and evaluations used, I remind noble Lords that we need to rectify a different kind of injustice.
The amendment asks that those valuations take into account that the leaseholder’s ability to pay will have been affected by the fact that their main wealth may be in the form of their asset—their home—and that their asset’s value may well be devalued hugely due to fire safety and building safety policies. The amendment notes that the properties may well be in negative equity as a consequence of government measures.
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I just wanted to read out a few examples—we have heard some before, but this will be very quick. A flat in Highbury Stadium Square was purchased in October 2019 for £377,500. It was sold in May 2020 for £167,000. That massive fall was in less than one year. The Department for Levelling Up, Housing and Communities valuation is £400,000. Then there is Brindley House in Birmingham, where a flat was bought for £198,000 in 2007. It was valued by the Department for Levelling Up now as being worth £300,000, but actually it sold for only £140,000. Again, that is below what it was bought for: in 2020, many years after it was bought, it was devalued. The final one I have here is Royal Artillery Quays in south-east London: £250,000 was paid for a
flat in 2006, but it was unsold at the guide price at auction recently, for £210,000, and yet the Department for Levelling Up values it as worth £385,000.
I think that indicates that there has been a massive crisis that has affected the value of flats. They are not to be valued in any kind of normal way. It illustrates a broader problem: flat sales are actually down 60% in three years, according to Land Registry data. This raises concerns, more generally, that the flats market could be killed off if they become unduly expensive through higher and higher service charges, as we discussed earlier. It illustrates again the potential unintended consequences of aspects of this Bill, in terms of the implications for a housing crisis through this muddle on valuations. It means that the people who own these flats will lose money if they try to sell them, but if not, they will be charged at a cap as though the flats were worth a lot more money.
On those caps on historical remediations, we have heard some important and persuasive arguments from the noble Lord, Lord Young, and the right reverend Prelate the Bishop of St Albans, about anomalies. I think there are lots of inequities still left in the Bill. The least of these inequities is contained in the way the Government have assessed who can afford to pay what. For example, it might sound as though someone is well off if they own a flat valued at more than £1 million; that must mean that they are wealthy. I appreciate that it is not necessarily popular anywhere in the world to be defending people who own flats worth more than £1 million, but I think it is reasonable to point out that often a leaseholder who bought a flat worth £1 million might well be asset rich but could well be cash poor. Maybe a flat was bought after a lifetime of work, meaning they are enjoying their retirement in that flat, but as of now they are not working full-time. So, they are just not well equipped to pay a much greater cap of £50,000 over 10 years, compared to the £15,000 for someone who, ironically, has a flat valued at £999,999.
As the right reverend Prelate the Bishop of St Albans has pointed out, that flat might not be worth £1 million, and I think that is a really important issue not to forget. This has also been raised by Stephen McPartland, an MP in the other place, and I think it is a general issue. I would like the Government to consider looking again at this valuation of houses for caps.