Leasehold Reform

By the end of this Parliament, this Labour Government will have finally brought the feudal leasehold system to an end. On 21 November, I made a detailed written ministerial statement setting out how the Government intend to honour that manifesto commitment, including the steps we will take to implement reforms to the system already in statute.

Every week my constituents in Poole, many of whom are retired, contact me with their concerns about the leasehold properties they live in. They are worried about excessive service charges, unfair ground rent, and exit and event fees. Can the Minister reassure them and me that the Government will tackle those problems once and for all, and will do so as a matter of priority?

I sympathise with the plight of my hon. Friend’s constituents. With regard to service charges in particular, we know that opaque and unaffordable charges are putting leaseholders and tenants across the country under immense strain. The Government are committed to improving service charge transparency and making it easier to challenge unreasonable increases. In the coming months, we intend to consult on how the provisions in the Leasehold and Freehold Reform Act 2024 relating to service charges and legal costs should be enacted, with a view to bringing those measures into force as quickly as possible thereafter.

Many of my constituents cannot afford to buy their freeholds under the current leasehold legislation. When does the Minister think the legislation to ensure that leaseholders can enfranchise easier, cheaper and quicker will come into force?

I fully appreciate the desire of my hon. Friend’s constituents to take advantage of the provisions in the 2024 Act that will make it cheaper and easier for existing leaseholders in houses and flats to buy their freehold. Unfortunately, we discovered on assuming office that the previous Government had passed the Act with a number of specific but serious flaws that prevent certain provisions, including those relating to enfranchisement valuations, from operating as intended. We need to fix those flaws through primary legislation, and we intend to do so at the earliest possible opportunity.

Earlier this month, together with about 40 Labour MPs, I met the managing director of FirstPort. I raised the case of 90-year-old Tom, who lives in a retirement complex in Bingley in my constituency. Like many of the residents whose stories we shared, he has been hit by extortionate service charges that have risen way above inflation. Does the Minister agree that stronger regulation of managing agents is needed to protect pensioners like Tom and others in leasehold flats from unaffordable housing costs?

We are very much aware that some managing agents provide a very poor quality of service to people like Tom and leaseholders across the country. Managing agents play a key role in the maintenance of multi-occupancy buildings and freehold estates, and their importance will only grow as we transition towards a commonhold future. As such, we have made it clear that we will strengthen the regulation of managing agents to drive up the standard of their service, and we are considering carefully the recommendations made in Lord Best’s 2019 report on regulating the property agent sector.

Residents of a housing development in Maidenhead bought their properties 10 years ago on 99-year leases. Now they are coming to sell their flats, they are faced with a charge of £15,000 to £25,000 each to extend their lease so that the new owners can get a mortgage. What will the Minister do directly to help those residents?

In terms of lease extensions, there are provisions in the 2024 Act that will provide some assistance to the hon. Gentleman’s constituents. As with other parts of that Act, those provisions, in many cases, require a detailed programme of secondary legislation. In some specific circumstances, we cannot switch on the provisions until we have made the fixes through primary legislation that I referred to in answer to a previous question, but we are working at pace. I am more than happy to have a conversation with him about what we are doing in this area.

Residents living in Mytchett Heath, a retirement community in my constituency, have reported the regular and repeated withholding of invoices, excessive insurance charges and £107,000-worth of maintenance without any supporting rationale. All of this adds up to a 70% increase in service charges since 2020. What is the Minister doing to ensure that not-for-profit companies such as Cognatum Estates, which is, to be very clear, not a social landlord, are held to account? Will he accede to a meeting with me and residents of Mytchett Heath and other Cognatum leaseholders to understand the challenges and anxieties they face?

In addition to the measures I have set out, we intend to proceed with implementing the service charge transparency provisions of the 2024 Act so that residents in all tenures can more easily challenge unreasonable increases. I think complaints about not-for-profit freeholders can be made to the housing ombudsman. I am more than happy to hear more from the hon. Gentleman about the particular circumstances of this case and give him further advice.

I thank the Minister for his reassurance to leaseholders, but what message does he have for freeholders, such as the residents of the Wolds View development in Driffield, who are trapped at the mercy of an unaccountable management company? Will he legislate to protect not just future homeowners but those currently stuck in these contracts?

We are determined to end the injustice of fleecehold entirely, and we will consult next year on legislative and policy options to reduce the prevalence of such arrangements. We remain committed to protecting residential freeholders on existing estates from unfair charges. Similar to my previous answers, we need to implement the 2024 Act’s new consumer protection provisions and bring those measures into force as quickly as possible. That is our intention.