Commonhold and Leasehold Reform Bill [Lords]

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Dr. Brian Iddon (Bolton, South-East): I rise to put on the record my strong objections to the concept of leasehold, which is the cause of so many problems. I said on Second Reading that it should be banned, and I repeat that today.

In my constituency, leasehold has created immense difficulties. At the end of the 19th century and the beginning of the 20th century, houses were built on the cheap to feed cheap labour into the factories. The factory owners did not want to own the houses, so they got people to build them for them. They were built brick on end, with inner and outer skins touching, and with common attics that are regarded today as a clear fire hazard. Then, to get rid of them as cheaply as possible, they were sold without the back streets—and often without the front streets—made up. Today, my constituency has mile upon mile of unmade and unadopted back streets; the result of leasehold, they cause havoc.

Since 1954, there have been 16 pieces of legislation in which the complexities and the unfairness of leasehold could have been tackled. Here we are again with an ideal opportunity to do something about leasehold to make it fairer—although I would prefer to abolish it. I welcome the introduction of the concept of commonhold. We have been debating the complexities that leasehold has created, one of which is marriage value. I object to that concept, too, and would abolish it.

As well as being built cheaply and sold without the streets being made up, the houses in my constituency were sold cheaply with ground rents in the leases. In those days those rents were worth a lot of money—between £1.50 and £2.50. They are worthless today, which gives rise to ground rent grazing, which my hon. Friend the Member for Brent, North (Mr. Gardiner) has spoken about very ably in several debates in the House. That practice has caused the insurance problems that several Members have mentioned. The Compton Group and others are giving some of my constituents a hard time about insurance, and I am pleased to note that the Government have tabled an amendment on that issue, which we will debate later. There is also the question of forfeiture, on which I have tabled an amendment and which we will deal with in detail later.

Leaseholders have the right to buy their freehold, but many of my constituents have told me how difficult that is. A certain Mr. Patel recently told me of how he had been paying ground rent to an agent; the agent wanted £200 plus VAT just to provide him with the

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price that we would have to pay to buy out the freehold. Mr. Patel asked the agent who the freeholder is, because he did not have a clue, but the agent would not tell him. I found out who the freeholder is, and both Mr. Patel and I have written to them, but we cannot get a price out of them; the agent has told me that they do not like to sell land in patchwork quilt fashion. Despite the fact that legislation enables people to buy freehold, some of my constituents have been obstructed at every turn and charged huge sums of money.

Finally, there is the question of fees. People go round my constituency looking to see who has had a conservatory or other extension stuck on their house. A letter arrives, saying, ''You have not approached us, as the freeholder, for planning permission.'' The recipients thought they had planning permission because they had got it from the local authority and the building controller had, where necessary, seen the work done, but the letter tells them that they do not have permission. The fees that freeholders charge for such permission—I am glad to say that the Bill deals with fees as well—are in the region of £500.

One young couple in my constituency were attempting to sell a house with a conservatory. When the potential purchaser carried out a search, it was found that the conservatory stood on land owned by three separate freeholders, all of whom wanted to cash in on giving retrospective planning permission before the transaction could legally take place. Leasehold causes many similar problems. Life should be simplified for householders. We will say much more about such matters in later debates.

Mr. Wiggin: I have listened with interest to the passion expressed this morning. I was concerned, because as a Committee member I am listening impartially to debates as the Bill progresses. I was alarmed when the hon. Member for Cleethorpes said that the provisions would cost £21 million. The figure is £210 million—

Shona McIsaac: I forgot the zero.

Mr. Wiggin: What a terrible mistake. That emphasises the magnitude and seriousness of this element of the Bill. As my hon. Friend the Member for Solihull (Mr. Taylor) rightly said to me earlier, this is not a moment for frivolity. I hope that, as our proceedings continue, we shall not make mistakes or miss the obvious own goal—

Mr. Graham Stringer (Manchester, Blackley): Score an own goal?

Mr. Wiggin: Yes—and if there is a crucial element missing from the Bill, I hope that we shall make up the deficit.

Ms Keeble: The debate has shown how strong hon. Members' views are on leasehold. Some of those views may not have been expressed so clearly before, but my hon. Friend the Member for Cleethorpes has forcefully raised the issue of leaseholders in her area on the Floor of the House, as has my hon. Friend the Member for Great Grimsby (Mr. Mitchell), who is her

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neighbour. No one doubts the depth of her concern about her constituents' position, especially about the circumstances affecting older people in leasehold houses, who form a distinctive section of the community.

We come late in the Bill to a discussion of houses. I emphasise for my hon. Friends' constituents, and for those of other hon. Members who have many leasehold houses in their constituencies, that the relative length of the clauses dealing with houses and flats is no reflection on the size of concerns about leasehold houses or the Government's commitment to ensuring that problems are dealt with. For the benefit of my hon. Friends, I have drawn up a short list of the provisions in the Bill that apply to flats and houses to show that we have considered their respective positions with equal seriousness.

The right to manage in chapter 1 applies to flats, but not to houses. If one occupies a house, it is generally assumed that one manages it oneself and that there is no need to involve a right-to-manage company. Chapter 2 does not apply to houses, but chapter 4 makes similar provisions, although they are not exactly the same. The clauses relating to the exercise of right and purchase price do not apply to houses; nor does chapter 3, which deals specifically with leases for tenants of flats. However, chapter 4 applies solely to houses and brings legislation for houses in line with that for flats in most respects. The provisions in chapter 5 also apply to houses but may in some instances be of limited value. The provisions relating to ground rent largely apply to leaseholders of houses, although they apply to flats as well. There is ample provision throughout the Bill to ensure that proper provisions are made on issues that are of concern to leaseholders of houses.

The hon. Member for Solihull again argued about the need for a price mechanism, which is a matter that we have dealt with previously. The hon. Gentleman feels that I need to become a statesperson rather than a politician on this matter, but I think that I would have to be a magician. It is hard to see how any formula for prices and valuation would capture and crystallise a volatile and contentious market. Whatever the Conservative Whip says, his party will probably have to recognise that it has strong feelings about price mechanisms. Historically, those have been substantially different from the views on this side.

Andrew Selous (South-West Bedfordshire): The Minister spoke of a formula. However, we could also be talking about a mechanism; an independent means of valuation. I take the Minister's point that a formula might not always come up with the right price in a changing property market. However, would she ask her officials to consider a mechanism for independent valuation on an agreed basis that could give some certainty?

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Ms Keeble: I think that I used both words. I was talking about the formula, and I will show that there is a mechanism, which we have tried to simplify. The Opposition amendments have tended to favour the

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freeholder. Some of the most strongly put views from Labour Members have concerned the problems experienced by leaseholders. We need a proper mechanism to resolve differences when it comes to deciding prices. I suspect that there would be more heated arguments about a formula than there would be about anything else. We have a mechanism—through the LVTs—and we believe that we have simplified it.

Mr. Taylor: I think that the Minister must give way.

Ms Keeble: No, I am going to finish this point. The hon. Gentleman has twice mentioned the matter of valuation and has indicated that he intends to return to it on Report.

We have also included various methods of protection in the form of prescribed notices—I apologise if I have mentioned that before—and we intend to table an amendment on Report to limit the power of the Lands Tribunal as far as costs are concerned. That will deal with some of the difficulties that the hon. Gentleman has identified. I recognise the point—made repeatedly by hon. Member for Solihull and by my hon. Friend the Member for Cleethorpes, who has been vociferous about it—that although people can be given a right, they cannot always exercise it.

Elderly people who are in leasehold houses are particularly vulnerable to pressure. They tend not to rush to the law, and they often find it difficult to exercise their rights. They are not, therefore, always in the best position to protect their financial interests. There are some measures in the Bill to deal with that, and I give an absolute undertaking, which the hon. Member for Leominster (Mr. Wiggin) requested, to consider very carefully other proposals that come forward during the debate on the Bill. That is the point of scrutiny.

I believe that many of the constituents of my hon. Friend the Member for Bolton, South-East (Dr. Iddon) and those of my hon. Friend the Member for Cleethorpes experience similar problems. Those are a different matter from the arguments around leasehold in London and the south-east. I take the point about the purposes for which some of the properties were constructed, the state of some of them, the standard of the building and the standard of the houses at the front and the rear. Representations about that are frequently made to me by virtue of my other responsibilities—it is a vexed question.

The hon. Gentleman's aim is the abolition of leasehold, and that position is supported by a number of Committee Members and many interest groups outside this place. However, it is not covered in the Bill, because it is accepted that leasehold is an existing form of tenure. The purpose of the Bill is to improve the way in which it operates, not to bring the provisions to an end at a stroke. I hope that our debates on leasehold provisions will prove to be stronger than those on commonhold. We need to consider how the Bill will operate, and to make sure that it will do what the Government intend. We want to deal with some of the anomalies and abuses, and to

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make sure that people in leasehold properties, be they flats or houses, are better able to exercise their rights. We want greater justice for leaseholders and freeholders.

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