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8.52 pm
Gareth Thomas (Clwyd, West): I shall confine my remarks since a number of hon. Members who have a real interest in the subject, which affects many of our constituents, wish to be called to speak.
The House has grappled with the fundamental issue of how to deal with the imbalance of power between landlords and leaseholders for many years, and I suspect that we will have to revisit the subject. I also suspect that although it would be eminently sensible to codify this area of law, in view of its complexity and the difficulties in acquiring parliamentary time, it will not be possible to codify it. However, it is a far from esoteric subject. As we have heard, no fewer than 2 million households live in homes under leasehold tenure.
The Bill is welcome and it will go some way towards redressing the imbalance to which I have referred. That imbalance arises from the practical difficulty ingrained in our land law, which does not allow positive covenants to run with land. That difficulty has created the imbalance to which so many hon. Members have referred.
I congratulate my hon. Friend the Member for Brent, North (Mr. Gardiner) on an impassioned and cogent speech. I will not go as far as him. I believe that the Government are right to proceed in a more cautious and
pragmatic manner than some would like. Clearly, the Government must balance various interests and tread carefully.I believe that the Bill takes a sensible approach to enabling a greater take-up of commonhold tenure. Having said that—and the Minister will appreciate that I support the Bill—my hon. Friends the Members for Brent, North, for Brighton, Pavilion (Mr. Lepper) and for Hampstead and Highgate (Glenda Jackson) made a strong argument for the Government to look again at the question of unanimity before conversion from leasehold tenure to commonhold tenure can occur. That is a fundamental problem and I welcome the fact that in another place the Lord Chancellor has professed to be open-minded about accepting a well-judged and carefully worded amendment.
I anticipate that the Government will be concerned about the implications of the Human Rights Act 1998, but surely it is possible to look again at the issue. If commonhold is to be a successful and popular form of tenure that redresses the imbalance that we have heard so much about, unanimity is an obstacle that must be done away with.
Part 2 of the Bill dealing with leasehold reform contains a number of extremely welcome measures. The right to manage will become an absolute right that is not based on the need to establish fault on the part of the landlord. That will substantially improve the position of many people I represent. Although it is a problem that affects London and other big cities, it is an increasing concern for retirement leaseholders, of whom there are some 100,000 living in purpose-built retirement blocks, subject to age restrictions. Some of these elderly people are subject to abuse and exploitation which is why the Government are entirely right to facilitate the right to manage and collective enfranchisement.
I congratulate the Government on tightening up the regime of service charges. The Bill provides protection against unreasonable administration charges and strengthens the requirement for greater consultation and improved accounting with regard to service charges which are an important issue for elderly people. However, I have some misgivings about certain details. I find it rather odd that the Bill will require a representative of the landlord to have voting rights in the right-to-manage company. I agree with the comment made in the other place that that will send confusing signals and may hamper the operation of right-to-manage companies.
I am also concerned that, at least at the moment, the Government are not prepared to introduce legislation to regulate managers. That is particularly relevant to retirement leaseholders on the north Wales coast who may not be sufficiently active or, frankly, may not want to be involved in the hassle of running a company. In those circumstances it is reasonable for them to want to appoint a manager. They need assurances that the right-to-manage company will operate in a robust way and that any professional managers who are appointed operate in a professional and honest manner. So there is a need for regulation in that regard.
I expect that amendments will be tabled in Committee to deal with some of the issues to which I have referred. I welcome the Bill but, like most Bills, it is capable of improvement.
9 pm
Mr. Bill Wiggin (Leominster): Thank you for calling me to speak, Madam Deputy Speaker, and I wish you a happy new year.
I should start by declaring my interests. My wife and I own a leasehold flat in Ifield road. It is currently for sale, and would make an excellent starting point for anyone hoping to begin in commonhold. Also, my home in Fulham, which I bought as a freehold property, has a large advertising hoarding on one wall that was leased by the previous owner to a billboard company. About 89 years remain on that lease which, relatively speaking, depletes the value of the house.
My concern with the Bill stems from the good intentions with which the Government have set out to right perceived wrongs in earlier legislation. The hon. Member for Burnley (Mr. Pike), for whom I have the highest regard, revealed the depth of passion and sense of injustice that people feel about the constrictions of a leasehold tenancy.
The debate has focused on many examples of constituents being horrified by the variety of costs that have emerged when they have lifted the lid on the legal details of the deals that they have cut with regard to their homes. The devil is in the detail, as the hon. Member for Rother Valley (Mr. Barron) illustrated with his own sad tales about what happened when he sallied forth into the world of property development.
Therefore, when we set out to hammer out some of the problems involved in creating a better law, we must be careful that we are not overegging the pudding and making the current situation worse. That is possible with this Bill, which is 134 pages long. The helpful little handbook that comes with it comprises a further 75 pages. If the devil truly is in the detail, as hon. Members of all parties seem to agree is the case, we may find that a whole tribe of devils is lurking in the detail of this Bill.
All hon. Members have a horror of legislation that is hard to read and to explain. I draw the Minister's attention again to the 100 per cent. conversion criteria. The provision has the potential to inflict much misery, and will cause leaseholders to argue whether conversion is sensible or worthwhile, given the way in which property prices change. The need to understand the complexity of leasehold law will shift as a result. Although it is entirely laudable and worthy to support an increase in home ownership, it is possible that property prices will be affected and will benefit one party at the expense of the other.
The Bill is a knife that cuts both ways. It belies the Government's soft tones, and leads me to believe that it will become just another method of wealth redistribution. That is in the finest traditions of old Labour, as Labour Members have described. I therefore have the gravest doubts about the Bill's ability to succeed, especially in view of its size. The principles of home ownership set out in the Bill and the destruction of so many unfair practices that it promises are a good start, but they are typical of the good intentions with which we know that the road to hell is paved.
The concept of commonhold flats may well be the holy grail for housing in London. I hope that it is, but what a shame that the Bill is to be rushed through with a programme motion. What a shame that no provision was made for homes over shops. Such homes are often the
first to be left empty when areas start to decline. That offers a challenge to legislators. If an area begins to decline, home owners are left with negative equity, irrespective of whether they are freeholders or leaseholders.The Bill misses the chance to incentivise in the case of homes over shops. It misses the chance to consolidate current leasehold law. It misses the chance to pave the minefield of legislation that lessees currently have to consider and which simply increases their costs.
What a shame about the bulging Bill. What a shame that it was not more concise. What a shame that there is so much leasehold law that it was necessary to introduce such a plump measure.
What a shame about the programme motion. After listening to the heartfelt and sensible suggestions made on both sides of the House, what a shame that there is a programme motion to push through a Bill that is supported by so many good intentions. However, once again, good intentions are no substitute for informed debate.
9.6 pm
David Wright (Telford): I do not want to detain the House for too long. I shall focus my comments on the broad details of the Bill, while also drawing out specific points that need to be considered in detail. When my hon. Friend the Under–Secretary of State for Transport, Local Government and the Regions winds up the debate, I hope that she can give us some reassurance on the detailed issues. I shall return to them in a few moments.
In general, the strength of the Bill is that it provides new ownership solutions that can be comprehensively applied. We should acknowledge that for most people their home is a statement of their personal identity and, importantly, it is a tool that ensures that they have a stake in the future of their community. The Bill enables people to take a more effective stake in the environment around their homes and, through the ensuing legal structures, will—I hope—provoke the creation of more proactive communities.
One of the key issues raised with me as I travelled about Telford knocking on doors during the general election was the condition and continuing maintenance of communal areas in many blocks of accommodation. Such buildings were not owned exclusively by one landlord. They were not exclusively non-local authority or privately owned. There was a general malaise in the condition of property in the town—as there is throughout the country. The Bill provides us with a platform and an opportunity to start to make comprehensive investment in a partnership between landlords and local communities.
I hope that we shall see a greater commitment from residents to improving the general condition of their environment. That point has been drawn out in the debate so far.
My hon. Friend the Member for Brent, North (Mr. Gardiner) focused on the key question at the centre of the debate and the main priority to be considered in Committee: why should people be beholden to absentee private landlords who are often unwilling to invest in their asset at the expense of lessees? That is the main problem with the current structure and it should be addressed in the Bill. Too often, we hear horror stories about communities
where people genuinely want their living space to be changed and improved, but the landlord lives many miles away and does not care.A couple of years ago I visited Budapest in the post-communist era, where there was a terrible system. Local authorities and indeed the state seemed to have no capacity to deal with the problems encountered by people living in large blocks. I do not suggest that the situation in this country is similar, but that system threw into stark relief the problems of people suffering from underinvestment in large accommodation blocks.
In relation to commonhold, part 1 gives a new solution that aims to provide people with a greater stake in their homes, along with a positive approach to the management of common areas. It is important to note that commonhold does not reduce the scale of disrepair in properties. It does not deal with disrepair; it is not a short cut for lower maintenance bills.
In the United Kingdom, we already spend far too little on general day-to-day maintenance of accommodation. The Bill will in general make people feel that they have an opportunity to invest and a stake in their property. However, it will not mean that their repair bills are reduced or that general disrepair will be resolved. I am fearful that many people will try to take the opportunity of employing the commonhold solution as a means of reducing their repair bills. That could pose a serious problem in the long term when it comes to housing investment.
The Bill is a challenge to housing, legal and development sector professionals to ensure that fair practices are employed in the initial disposal and continuing management of property. Importantly, I hope that it will also begin to impact on the design and planning of housing development projects. It will be important for developers and their architects to engage with their project managers and legal teams at the stage when buildings are conceived and designed, not as an afterthought. A more comprehensive approach to the concept of sustainable development in every sense needs to be provoked when the Bill is implemented.
It is important to think through the implications of scheme designs, with greater care taken in relation to areas intended for collective use and enjoyment. We are trying to encourager higher density urban living in our large towns and cities, with a focus on quality design. The use of commonhold in such new developments will be important and should help us, through a genuine feeling of ownership, to avoid some of the problems of the past. I agree with my hon. Friend the Member for Rother Valley (Mr. Barron) that we should at least look at getting commonhold principles adopted for all new developments. That would be key in encouraging developers to move forward.
On the need to secure 100 per cent. consent for conversion to commonhold, some have argued that it will be virtually impossible to secure that scale of involvement. Clearly, that will depend on the number of units involved. However, I accept the Minister's point that we could end up with a twin-track problem in terms of people managing blocks. That needs to be considered in Committee.
I believe that commonhold will probably start to be deployed in new developments. However, I hope that we can return to this point. There seems to have been a
consensus in the Chamber today about the need to consider the 100 per cent. barrier and think about mechanisms to provoke commonhold as a new form of tenure.In conclusion, I wish to comment on the procedures to ensure that the costs of proposed works to blocks are laid out clearly and logically to leaseholders. The current exclusion of improvement costs from the service charge definition is confusing for leaseholders. The change proposed in the Bill which, as I understand it, will mean that such costs must be disclosed and people will have a right to challenge their reasonableness, will have a bigger impact than has been recognised during this debate. Once again, tenants and landlords must work in partnership to define what investment is needed in the fabric of buildings to ensure their longevity.
I welcome the Bill. I hope that it progresses rapidly through the House and that it is implemented as soon as possible.
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