My Lords, I am pleased to start Committee stage of this long-awaited Bill. I understand that it is not correct protocol to reiterate Second Reading speeches in Committee, so I shall not do that, but I believe that there are some long-standing unanswered questions relating to the Bill. Though we will probe some of them through our amendments, it is disappointing and unhelpful to reach this stage without some of those issues being clarified. If the Minister can comment, either in her early responses in Committee, or as the Bill proceeds, it would be helpful.
I hope we do not have to reach Report before we know, for example, the outcome of the consultation on ground rent; whether the Government have given up on their proposals to scrap leasehold as a tenure for flats; how the Government propose to help freehold homeowners who find themselves trapped in what have become known as fleecehold charges for estate management, an issue raised powerfully by the Law Commission again in its recent briefing; whether the Government intend to use the Bill to put right some of the building safety issues around qualifying and non-qualifying leases, including those relating to buildings under 11 metres in height, which undoubtedly would have been better addressed by the Building Safety Act but were excluded; and why proposals for a regulator of property agents—supported across this House, and discussed again just last week—continue to be resisted. We would be grateful for clarification from the Minister on the commencement date of the provisions in the Bill, as she has indicated in a written response to my noble friend Lord Kennedy that it will not be until 2026.
It is worth opening this group by talking about the news reports over the weekend. We learned from the Times that the costly regime of ground rent will continue for a further 20 years. Although those ground rents may be capped at £250, we have not had any official announcement on that yet.
The amendments in this group relate directly to the ban that was introduced on Report in the Commons; it was added in late so it was not able to be properly scrutinised there. So our main question is: when exactly will the Government do what was reported over the weekend? Will they amend the Bill at an even later stage, with even less opportunity to scrutinise?
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Our main purpose in tabling the amendments is that the Government’s purported ban on new leasehold houses does not actually ban the sale of all new leasehold houses. Our main specific objections are to Schedule 1, which we will cover in subsequent amendments. What assessment have the Government carried out of the scale and numbers of community housing leases, retirement housing leases and National Trust leases which would be covered by the exemptions listed in Schedule 1? It seems that such a measure would be unlikely to enact the proposed ban on leasehold because Schedule 1 would allow new long residential leases of houses in instances where the superior lease has been granted before 2017. Have the Government carried out any scoping on this? We have no idea of the numbers of undeveloped plots of land or properties which may be subject to superior leases or which could be granted under such terms.
If a developer had purchased a pre-2017 head lease on a site but not built it out—we know that that has been done in this market both for financial purposes and to give developers protection from some consumer protections—and this is not fully understood and quantified, the exemptions could be in danger of virtually nullifying the ban on leasehold houses. We understand the significance of the date relating to the announcement of the policy and the need, for example, for National Trust leases to be exempt, but a considerable amount of clarification is needed.
Our stand part notice probes permitted leases by removing Clause 7, and Amendments 2 to 4 focus on the following exemptions respectively by removing the relevant lines from Part 1 of Schedule 1. Amendment 1 concerns leases granted out of historic leasehold estates; paragraph 1 of Schedule 1 details that a lease granted out of a historic leasehold estate is a lease granted on a leasehold estate acquired by the vendor before 22 December 2017 or a lease granted out of an agreement for a lease entered into before 22 December 2017. We are very anxious in case that might allow more widespread nullification of the intention to stop leasehold homes being sold in future.
Paragraph 2 states that the permitted lease definition for community housing leases may include community land trusts, co-operatives or a lease of a description that meets further conditions specified in regulations by the Secretary of State. Have the Government looked at the expected size of that group of exemptions?
In terms of retirement housing leases in Paragraph 3, the lease must meet certain conditions, including a minimum age restriction for the tenant and that all the leasehold houses within that development scheme must also be held on a retirement lease. We have particular concerns because this group of leaseholders has been affected by some of the heaviest and most onerous hikes of charges across the board, including service charges, ground rent and other costs. What assessment have the Government done of the impact on that group of leaseholders?
Amendment 4 relates to leases of certain National Trust properties. As I said, we understand why the National Trust would be exempted.
Surely the Government realise that the exemptions provided for by Schedule 1 could render the ban meaningless and will mean that new leasehold houses are still built in significant numbers. Can the Minister offer us any reassurance on whether an impact assessment has been carried out on the effect of these exemptions on the overall ban? Will she consider amendments that will tighten the proposed exemptions to ensure that the majority of homes that come forward will be freehold? Can she enlighten us any further on what will happen about leasehold flats, which affect 70% of leaseholders?