PARLIAMENTARY DEBATE
Leasehold and Freehold Reform Bill - 27 February 2024 (Commons/Commons Chamber)

I beg to move, That the clause be read a Second time.

With this it will be convenient to discuss the following:

Government new clause 27—Part 4: Crown application.

Government new clause 28—Redress schemes: no Crown status.

Government new clause 29—Part 5: amendments to other Acts.

Government new clause 30—Steps relating to remediation of defects.

Government new clause 31—Remediation orders.

Government new clause 32—Remediation contribution orders.

Government new clause 33—Recovery of legal costs etc through service charge.

Government new clause 34—Repeal of section 125 of the BSA 2022.

Government new clause 35—Higher-risk and relevant buildings: notifications in connection with insolvency.

Government new clause 42—Ban on grant or assignment of certain long residential leases of houses.

Government new clause 43—Long residential leases of houses.

Government new clause 44—Leases which have a long term.

Government new clause 45—Series of leases whose term would extend beyond 21 years.

Government new clause 46—Houses.

Government new clause 47—Residential leases.

Government new clause 48—Permitted leases.

Government new clause 49—Permitted leases: certification by the appropriate tribunal.

Government new clause 50—Permitted leases: marketing restrictions.

Government new clause 51—Permitted leases: transaction warning conditions.

Government new clause 52—Prescribed statements in new long leases.

Government new clause 53—Restriction on title.

Government new clause 54—Redress: right to acquire a freehold or superior leasehold estate.

Government new clause 55—Redress: application of the right to acquire.

Government new clause 56—Redress: general provision.

Government new clause 57—Redress regulations: exercising and giving effect to the right to acquire.

Government new clause 58—Enforcement by trading standards authorities.

Government new clause 59—Financial penalties.

Government new clause 60—Financial penalties: cross-border enforcement.

Government new clause 61—Lead enforcement authority.

Government new clause 62—General duties of lead enforcement authority.

Government new clause 63—Enforcement by lead enforcement authority.

Government new clause 64—Further powers and duties of enforcement authorities.

Government new clause 65—Power to amend: permitted leases and definitions.

Government new clause 66—Interpretation of Part A1.

New clause 1—Estate management services—

“(1) Within three months of the passage of this Act, the Secretary of State must by regulation provide for residents of managed dwellings to take ownership, at nominal cost, of—

(a) an estate management company, or

(b) the assets of an estate management company, or other company or business connected with the development or management of the dwellings, which are used to provide services to managed dwellings

if the estate management company or connected company or business does not—

(i) provide the residents of the managed dwellings with a copy of its budget for the forthcoming year and accounts for the past year;

(ii) give sufficient notice to enable residents to attend its annual meeting;

(iii) acknowledge correspondence sent by registered post to its registered office within a reasonable length of time.

(2) Regulations under subsection (1) may amend primary legislation.”

New clause 2—Estate management: compensation—

“(1) This section applies where the first and second condition are met.

(2) The first condition is that it would not be reasonable for the residents of a property to continue to occupy that property as their primary residence due to a defect which the estate manager—

(a) is responsible for remedying, or

(b) could reasonably have foreseen would arise.

(3) The second condition is that—

(a) the defect is the direct result of actions taken or not taken by the estate manager, or

(b) the estate manager has failed to remedy the defect within a reasonable period of time.

(4) The estate manager must—

(a) provide compensation to the residents of the property equal to any reasonable financial loss they incurred as a result of the defect, or

(b) provide suitable alternative accommodation for the duration of the period for which this section applies.

(5) No cost incurred by an estate manager as a consequence of this section may be recouped from the estate in question through an estate management charge.”

This new clause would allow estate residents to claim compensation or alternative accommodation where it is not reasonable for them to remain in their homes due to defects caused, or left unremedied for an unreasonable length of time, by an estate manager.

New clause 3—Prohibition on landlords claiming litigation costs from tenants—

“(1) Any term of a long lease of a dwelling which provides a right for a landlord to demand litigation costs from a leaseholder (whether as a service charge, administration charge or otherwise) is of no effect.

(2) The Secretary of State may, by regulations, specify classes of landlord to which or prescribed circumstances in which subsection (1) does not apply.

(3) In this section—

“administration charge” has the meaning given by Schedule 11 of the Commonhold and Leasehold Reform Act 2022;

“dwelling” means a building or part of a building occupied or intended to be occupied as a separate dwelling, together with any yard, garden, or outhouses and appurtenances belonging to it or usually enjoyed with it;

“long lease” has the meaning given by sections 76 and 77 of the Commonhold and Leasehold Reform Act 2002;

“service charge” has the meaning given by section 18 of the Landlord and Tenant Act 1985;

“landlord” has the meaning given by section 30 of the Landlord and Tenant Act 1985.”

This new clause would prohibit landlords from claiming litigation costs from tenants other than under limited circumstances determined by the Secretary of State.

New clause 4—Remedies for the recovery of annual sums charged on land—

“(1) Section 121 of the Law of Property Act 1925 is omitted.

(2) The amendment made by subsection (1) has effect in relation to arrears arising before or after the coming into force of this section.”

This new clause, which is intended to replace clause 59, would remove the provision of existing law which, among other things, allows a rentcharge owner to take possession of a freehold property in instances where a freehold homeowner failed to pay a rentcharge.

New clause 5—Abolition of forfeiture of a long lease—

“(1) This section applies to any right of forfeiture or re-entry in relation to a dwelling held on a long lease which arises either—

(a) under the terms of that lease; or

(b) under or in consequence of section 146(1) of the Law of Property Act 1925.

(2) The rights referred to in subsection (1) are abolished.

(3) In this section—

“dwelling” means a building or part of a building occupied or intended to be occupied as a separate dwelling, together with any yard, garden, or outhouses and appurtenances belonging to it or usually enjoyed with it;

“lease” means a lease at law or in equity and includes a sub-lease, but does not include a mortgage term;

“long lease” has the meaning given by sections 76 and 77 of the Commonhold and Leasehold Reform Act 2002.”

This new clause would abolish the right of forfeiture in relation to residential long leases in instances where the leaseholder is in breach of covenant.

New clause 6—Requirement to establish and operate a management company under leaseholder control—

“(1) The Secretary of State may by regulations make provision—

(a) requiring any long lease of a dwelling to include a residents management company (“RMC”) as a party to that lease, and

(b) for that company to discharge under the long lease such management functions as may be prescribed by the regulations.

(2) Regulations under subsection (1) must provide—

(a) for the RMC to be a company limited by share (with each share to have a value not to exceed £1), and

(b) for such shares to be allocated (for no consideration) to the leaseholder of the dwelling for the time being.

(3) Regulations under subsection (1) must prescribe the content and form of the articles of association of an RMC.

(4) The content and form of articles prescribed in accordance with subsection (3) have effect in relation to an RMC whether or not such articles are adopted by the company.

(5) A provision of the articles of an RMC has no effect to the extent that it is inconsistent with the content or form of articles prescribed in accordance with subsection (3).

(6) Section 20 of the Companies Act 2006 (default application of model articles) does not apply to an RMC.

(7) The Secretary of State may by regulations make such provision as the Secretary of State sees fit for the enforcement of regulations made under subsection (1), and such provision may (among other things) include provision—

(a) conferring power on the First-Tier Tribunal to order that leases be varied to give effect to this section;

(b) providing for terms to be implied into leases without the need for any order of any court or tribunal.

(8) The Secretary of State may by regulations prescribe descriptions of buildings in respect of which regulations may be made under subsection (1).

(9) In this section—

“dwelling” means a building or part of a building occupied or intended to be occupied as a separate dwelling, together with any yard, garden, or outhouses and appurtenances belonging to it or usually enjoyed with it;

“long lease” has the meaning given by sections 76 and 77 of the Commonhold and Leasehold Reform Act 2002;

“management function” has the meaning given by section 96(5) of the Commonhold and Leasehold Reform Act 2002.

(10) The Secretary of State may by regulations amend the definition of “management function” for the purposes of this section.”

This new clause would ensure that leases on new flats include a requirement to establish and operate a residents’ management company responsible for all service charge matters, with each leaseholder given a share.

New clause 7—Power to establish a Right to Manage regime for freeholders on private or mixed-use estates—

“In Section 71 of the Commonhold and Leasehold Reform Act 2002, after subsection (2) insert—

“(3) The Secretary of State may by regulations make provision to enable freeholder owners of dwellings to exercise a right to manage in a way which corresponds with or is similar to this Part.

(4) A statutory instrument containing regulations under subsection (3) may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.””

This new clause would permit the Secretary of State to establish a Right to Manage regime for freeholders of residential property on private or mixed-use estates.

New clause 8—Regulation of property agents—

“(1) The Secretary of State must by regulations make provision for implementing the proposals of the Regulation of Property Agents Working Group final report of July 2019 as far as they relate to—

(a) estate management;

(b) sale of leasehold properties; and

(c) sale of freehold properties subject to estate management or service charges.

(2) Regulations under this section—

(a) must be laid within 24 months of the date of Royal Assent to this Act,

(b) shall be made by statutory instrument, and

(c) may not be made unless a draft has been laid before and approved by resolution of each House of Parliament.

(3) If, at the end of the period of 12 months beginning with the day on which this Act is passed, the power in subsection (1) is yet to be exercised, the Secretary of State must publish a report setting out the progress that has been made towards doing so.”

This new clause would require the Secretary of State to make regulations to implement the proposals of the Regulation of Property Agents Working Group final report within 24 months of the Act coming into force and to report on progress to that end at the end of the period of 12 months.

New clause 9—Qualifying leases for the purposes of the remediation of building defects—

“Section 119 of the Building Safety Act 2022 is amended by the insertion after subsection (4) of the following —

“(5) The Secretary of State may, by regulations, amend subsection (2) so as to bring additional descriptions of lease within the definition of “qualifying lease”.””

This new clause would give the Secretary of State the power to bring “non qualifying” leaseholders within the scope of the protections of the Building Safety Act 2022.

New clause 10—Meaning of “relevant building” for the purposes of the remediation of building defects—

“Section 117 of the Building Safety Act 2022 is amended by the insertion after subsection (6) of the following—

“(7) The Secretary of State may, by regulations, amend subsection (2) so as to bring additional descriptions of building within the definition of “relevant building”.””

This new clause would give the Secretary of State the power to bring buildings which are under 11m in height or have fewer than four storeys within the scope of the protections of the Building Safety Act 2022.

New clause 11—Report on providing leaseholders in flats with a share of the freehold—

“(1) The Secretary of State must publish a report outlining legislative options to ensure that all qualifying tenants in newly-constructed residential properties containing two or more flats have a proportionate share of the freehold of their property.

(2) The report must be laid before Parliament within three months of the commencement of this Act.”

This new clause would require the Secretary of State to publish a report outlining legislative options to provide leaseholders in flats with a share of the freehold.

New clause 12—Proportion of qualifying tenants required for a notice of claim to acquire right to manage—

“Section 79 of the CLRA 2002 is amended, in subsection (5), by leaving out “one-half” and inserting “35%”.”

This new clause would reduce the proportion of qualifying tenants who must be members of a proposed Right to Manage company for a claim to be made from one-half to 35%.

New clause 13—Prohibition on new leasehold homes—

“(1) Within three months of the passage of this Act, the Secretary of State must by regulations prohibit the sale of any new leasehold home.

(2) Regulations under this section—

(a) shall be made by statutory instrument,

(b) may not be made unless a draft has been laid before and approved by resolution of each House of Parliament; and

(c) may amend primary legislation.”

New clause 14—Premises to which leasehold right to manage applies—

“Section 72 of the CLRA 2002 is amended in subsection (1)(a), by the addition at the end of the words “or of any other building or part of a building which is reasonably capable of being managed independently.””

This new clause which is an amendment to the Commonhold and Leasehold Reform Act 2002 adopts the Law Commission’s Recommendation 5 in its Right to Manage report which would allow leaseholders in mixed-use buildings with shared services or underground car park to exercise the Right to Manage.

New clause 15—Meaning of “accountable person” for the purposes of the Building Safety Act 2022—

“(1) Section 72 of the Building Safety Act 2022 is amended in accordance with subsections (2) and (3).

(2) After subsection (2)(b), insert—

“(c) all repairing obligations relating to the relevant common parts which would otherwise be obligations of the estate owner are functions of a manager appointed under section 24 of the Landlord and Tenant Act 1987 in relation to the building or any part of the building.”

(3) In subsection (6), in the definition of “relevant repairing obligation”, after “enactment”, insert “or by virtue of an order appointing a manager made under section 24 of the Landlord and Tenant Act 1987”.

(4) Section 24 of the Landlord and Tenant Act 1987 is amended in accordance with subsection (5).

(5) Omit subsection (2E).”

This new clause would provide for a manager appointed under section 24 of the Landlord and Tenant Act 1987 to be the “accountable person” for a higher-risk building.

New clause 16—Commencement of section 156 of the CLRA 2002—

“(1) Section 181 of the CLRA 2002 is amended as follows.

(2) In subsection (1), after “104” insert “, section 156”.

(3) After subsection (1) insert—

“(1A) Section 156 comes into force at the end of the period of two months beginning with the day on which the Leasehold and Freehold Reform Act 2024 is passed.””

This new clause would bring into force a requirement of the Leasehold and Freehold Reform Act 2024 that service charge contributions be held in designated accounts.

New clause 17—Eligibility for enfranchisement—

“(1) The LHRUDA 1993 is amended as follows.

(2) In section 3—

(a) in subsection (2)(a), after third “building”, insert “, or could be separated out by way of the granting of a mandatory leaseback on the non-residential premises to the outgoing freeholder”;

(b) after sub-paragraph (2)(b)(ii), insert “or

(iii) are reasonably capable of being managed independently or are already subject to separate management arrangements;”

(3) In section 4(1)(a)(ii), after “premises;”, insert “nor

(iii) reasonably capable of being separated out by way of the granting of a mandatory leaseback and reasonably capable of being managed independently from the residential premises;””

This new clause would ensure that leaseholders in mixed-use blocks with shared services with commercial occupiers would qualify to buy their freehold.

New clause 18—Right to manage: procedure following an application to the appropriate tribunal—

“(1) The CLRA 2002 is amended as follows.

(2) After section 84, insert—

“84A Procedure following an application to the appropriate tribunal

(1) Where an application is made to the appropriate tribunal under section 84(3) for a determination that an RTM company was on the relevant date entitled to acquire the right to manage the premises, the Tribunal may, if satisfied that it is reasonable to do so, dispense with—

(a) service of any notice inviting participation;

(b) service of any notice of claim;

(c) any of the requirements in the provisions set out in subsection (2); or

(d) any requirement of any regulations made under this part of this Act.

(2) Subsection (1)(c) applies to the following provisions of this Act—

(a) section 73;

(b) section 74;

(c) section 78;

(d) section 79;

(e) section 80;

(f) section 81.””

This new clause would provide the appropriate tribunal with the discretion to dispense with certain procedural requirements where it is satisfied that it is reasonable to do so. It is designed to deal with cases where a landlord attempts to frustrate an RTM claim by procedural means.

New clause 19—Service charges: consultation requirements—

“(1) The Landlord and Tenant Act 1985 is amended as follows.

(2) In section 20ZA, after subsection (1), insert—

“(1A) “Reasonable” for the purpose of subsection (1) is a matter of fact for the tribunal, which—

(a) may or may not consider the matter of relevant prejudice to the tenant. If prejudice is to be considered the burden is on the landlord to demonstrate a lack of prejudice or to prove the degree of prejudice;

(b) must include consideration of the objectives of increasing transparency and accountability, and the promotion of professional estate management, as well as of ensuring that leaseholders are protected from paying for inappropriate works or paying more than would be appropriate;

(c) must consider the dignity and investment of the tenant, who should be treated as a core participant in the process of service charge decisions;

(d) must have regard to the tenant’s legitimate interest in a meaningful consultation process, bearing in mind that minor or technical breaches may not impinge on the tenant’s interest, nor prejudice the tenant;

(e) at its discretion may or may not consider a reconstruction of the ‘what if’ situation, analysing what would have happened had the consultation been followed properly. The landlord is liable for the costs of such a reconstruction.””

This new clause would set matters for the tribunal to consider when deciding whether to dispense with all or any of the requirements for landlords to consult tenants in relation to any major works.

New clause 20—Building insurance and section 39 of the Financial Services and Markets Act 2000—

“A landlord may not manage or arrange insurance for their building under the protections of section 39 of the Financial Services and Markets Act 2000.”

This new clause precludes a landlord from operating as an appointed representative under the licence of Broker, where the landlord has no such licence themselves.

New clause 21—Collective enfranchisement: removal of prohibition on participation—

“(1) Section 5 of the LRHUDA 1993 is amended in accordance with subsection (2).

(2) Omit subsections (5) and (6).”

This new clause would implement recommendation 41 of the Law Commission’s report on enfranchisement, that the prohibition on leaseholders of three or more flats in a building being qualifying tenants for the purposes of a collective enfranchisement claim should be abolished.

New clause 22—Leases for new dwellings: default length—

“(1) Where a lease is a regulated lease, it must be issued with a lease term of at least 990 years.

(2) In this section—

“regulated lease” means a lease which meets the following conditions—

(a) it is a long lease of a single dwelling;

(b) it is granted for a premium;

(c) it is granted on or after the relevant commencement day but not in pursuance of a contract made before that day; and

(d) when it is granted, it is not an excepted lease.

the “relevant commencement day” is 1 January 2025.”

This new clause would ensure that all leases created for new flats following 1 January 2025 come with a default length of 990-years, bringing the position of future private sector leases into line with the existing requirements under Home England’s new model shared ownership lease

New clause 23—Report on disadvantage suffered by existing leaseholders—

“(1) Within 12 months of this Act receiving Royal Assent, the Secretary of State must commission an independent evaluation of the matter set out in subsection (2) and must lay the report of the evaluation before Parliament.

(2) The matter is the extent to which a tenant who has extended their lease or purchased the freehold of their property after 27 November 2023 but prior to this Act receiving Royal Assent (Tenant A) is disadvantaged in comparison to a tenant who has extended their lease or purchased the freehold of their property after this Act received Royal Assent (Tenant B).

(3) The report must take account of the following factors—

(a) marriage value;

(b) the legal costs likely to be incurred by the freeholder; and

(c) any charge for which Tenant A would be liable but Tenant B would not.

(4) The report must make recommendations to redress any significant disparities between the costs for which Tenant A would be liable but Tenant B would not.

(5) The Secretary of State may by regulations give effect to any recommendations made in the evaluation.

(6) Regulations under this section—

(a) shall be made by statutory instrument; and

(b) may not be made unless a draft has been laid before and approved by resolution of each House of Parliament.”

This new clause would require the Secretary of State to commission an independent evaluation of any disadvantages faced by a tenant who has extended their lease or purchased the freehold of their property after the introduction of this Bill but prior to it receiving Royal Assent.

New clause 24—Asbestos remediation—

“(1) The Leasehold Reform, Housing and Urban Development Act 1993 is amended as follows.

(2) After section 37B, insert—

“37C Asbestos remediation

(1) This section applies where a claim to exercise the right to collective enfranchisement in respect of any premises is made by tenants of dwellings contained in the premises and the claim is effective.

(2) Not less than 3 months before the effective date of the enfranchisement, the landlord must cause a structural survey of the premises to be undertaken by an accredited professional to ascertain whether asbestos is, or is liable to be, present in those parts of the premises which the landlord is responsible for maintaining.

(3) Where the survey required by subsection (2) reveals the presence of asbestos, the landlord must, at the landlord’s cost, arrange for its safe removal.

(4) If the removal of asbestos required by subsection (3) is not carried out before the responsibility for maintaining the affected parts transfers to another person under the claim to exercise the right of collective enfranchisement, the landlord is liable for the costs of its removal.””

New clause 25—Right to statutory compensation when landlord alters premises—

“(1) This section applies when both of the following conditions are satisfied—

(a) the first condition is that there are premises in which at least one dwelling is let on a long lease to a person (“T”); and

(b) the second condition is that the landlord or any superior landlord (“L”) under T’s long lease undertakes substantial development to the premises containing T’s dwelling.

(2) When both of the conditions mentioned in subsection (1) are satisfied, L must pay to T compensation reflecting the disruption caused by the substantial development.

(3) The compensation due from L to T under subsection (2) is to be calculated and paid by L to T at a time and in a manner according to regulations made by the Secretary of State.

(4) Notwithstanding any term of any agreement to the contrary, whether the agreement is made before or after the coming into force of this section—

(a) T may set-off any part of any compensation due from L but not paid by L in accordance with this section against any service charges demanded by L; and

(b) L may not exercise or omit to exercise any right, or otherwise take any step, to prejudice T as a result of any set-off exercised by T in accordance with this section.

(5) The County Court has jurisdiction to determine any dispute regarding compensation payable under this section.

(6) Regulations under this section—

(a) are to be made by statutory instrument;

(b) may make provision generally or only in relation to specific cases;

(c) may make different provision for different purposes;

(d) may include supplementary, incidental, transitional or saving provision.

(7) A statutory instrument containing regulations under this section is subject to the negative procedure.

(8) In this section—

“long lease” has the same meaning has the same meaning as in Chapter 1 of Part 2 of the Commonhold and Leasehold Reform Act 2002 (see sections 76 and 77 of that Act);

“service charge” has the same meaning as in section 18 of the Landlord and Tenant Act 1985 (as amended by this Act);

“substantial development” means demolishing, reconstructing or carrying out substantial works of construction on, the whole or a substantial part of the premises.”

This new clause is proposed after clause 21. It would require landlords who extend or alter buildings to pay statutory compensation to residential leaseholders in that building, for example when adding new storeys under permitted development rights. Residential leaseholders would have the right to set-off this compensation against service charges if landlords did not pay.

New clause 36—Codes of management practice: requirement to adhere—

“In section 87 of the LRHUDA 1993 (codes of management practice)—

(a) after subsection (1) insert—

“(1A) If—

(a) the Secretary of State has not approved a code or codes of practice which appear to him to promote desirable practices in relation to all necessary matters concerned with the management of residential property by relevant persons within three months of the passage of the Leasehold and Freehold Reform Act 2024, or

(b) as a consequence of the withdrawal of his approval of a code or modifications under subsection (1)(c) it appears to him that codes of practice in relation to all necessary matters are no longer in place,

he must draw up a code or modifications in relation to such matters as he considers necessary and treat that code, or those modifications, as if submitted to him under subsection (1)(a)(ii).”

(b) in subsection (7)—

(i) omit the words “not of itself”, and

(ii) for “but”, substitute “and”.”

This new clause would amend section 87 of the Leasehold Reform, Housing and Urban Development Act 1993 so as to make the codes of practice allowed for under that section mandatory (paragraph (b)), and to require the Secretary of State to ensure that such codes of practice are in place (paragraph (a)).

New clause 37—Qualification in property management—

“In section 87 of the LRHUDA 1993 (codes of management practice), after subsection (6), insert—

“(6A) A code of practice approved under this section must require a person who discharges management functions in respect of residential property to hold a relevant qualification in property management.””

This new clause, together with NC36, would require any person who discharges management functions in respect of residential property to hold a relevant qualification in property management.

New clause 38—Information to be given to prospective purchasers of leasehold residential property—

“In the LTA 1985, after section 30P (as inserted by section 40) insert—

“Information to be given to prospective purchasers of leasehold residential property

30Q Information to be given to prospective purchasers of leasehold residential property

(1) The landlord must ensure that any person purchasing the lease of a dwelling is provided at the point of purchase with a copy of the Government guidance entitled “How to Lease”, as it may be updated from time to time.

(2) For the purposes of this section, “landlord” has the same meaning as in sections 30K to 30N (see section 30P).””

New clause 39—Rights of first refusal on disposal of freehold homes—

“(1) Within three months of the passage of this Act, the Secretary of State must by regulations provide for the rights of first refusal granted to qualifying tenants of flats by Part 1 of the Landlord and Tenant Act 1987 to be extended to tenants of freehold houses.

(2) Regulations under subsection (1)—

(a) may amend primary legislation;

(b) are subject to the affirmative procedure (but see subsection (3)).

(3) If before approving a draft of regulations under subsection (1) both Houses of Parliament have agreed amendments to that draft, the Secretary of State must make the regulations in the form of the draft as so amended.”

New clause 40—Failure of landlords to respond to requests for enfranchisement—

“(1) Within three months of the passage of this Act, the Secretary of State must conduct a review of the problems faced by tenants wishing to exercise their right to enfranchisement whose landlords do not respond to enfranchisement requests.

(2) A report of the review must be laid before Parliament as soon as it has been completed.

(3) The Secretary of State may by regulations implement any recommendation of the review.

(4) Regulations under subsection (3) may amend primary legislation.”

New clause 41—Report on disadvantage due to payment of marriage value—

“(1) Within 12 months of the passage of this Act, the Secretary of State must commission an independent evaluation of the matter set out in subsection (2) and must lay the report of the evaluation before Parliament.

(2) The matter is the extent to which a tenant who has been required to pay marriage value when extending their lease (Tenant A) is disadvantaged in comparison to a tenant who has extended their lease after the passage of this Act (Tenant B).

(3) The report must—

(a) make recommendations to redress any significant disparities between the marriage value costs for which Tenant A would be liable but Tenant B would not; and

(b) recommend the date after which Tenant A must have extended their lease in order to be eligible for any financial redress.

(4) The Secretary of State may by regulations give effect to any recommendations made in the evaluation.

(5) Regulations under this section—

(a) are to be made by statutory instrument; and

(b) may not be made unless a draft has been laid before and approved by resolution of each House of Parliament.”

This new clause would require the Secretary of State to commission an independent evaluation of any disadvantages faced by a tenant who has been required to pay marriage value when extending their lease in comparison to a tenant who has extended their lease after the passage of this Act and therefore not been required to pay marriage value.

New clause 67—Liability of freeholders for central heating failures—

“(1) Within 12 months of the passage of this Act, the Secretary of State must commission an independent evaluation of the matters set out in subsection (2) and must lay the report of the evaluation before Parliament.

(2) The matters are, where there is a failure of a communal central heating system for which a freeholder is responsible which lasts for a minimum of 24 hours—

(a) the extent to which a freeholder should be liable; and

(b) whether, if the freeholder is considered to some extent to be liable, financial penalties should be imposed on the freeholder.

(3) The Secretary of State may by regulations give effect to any recommendations made in the evaluation.

(4) Regulations under this section—

(a) are to be made by statutory instrument; and

(b) may not be made unless a draft has been laid before and approved by resolution of each House of Parliament.”

This new clause would require the Secretary of State to commission an independent evaluation of the matter of holding freeholders financially liable for long-lasting central communal heating failures where the freeholder has a responsibility for upkeep.

“New clause 68—Shared ownership—

(1) Within three months of the passage of this Act, the Secretary of State must by regulations create certain rights and obligations for leaseholders and freeholders on all leasehold properties which are subject to a shared ownership model created after 1967.

(2) The rights referred to in subsection (1) are that any leaseholder has the right to increase their share of the freehold in the property in increments of either ten percent or 25 percent on giving formal notice in writing to the freeholder.

(3) The obligation referred to in subsection (1) is that the freeholder may not charge a rent on their freehold share of the property which is greater than 2.75% of the market value of the share of the property which they hold.

(4) Rights and obligations created by regulations under this section are to apply notwithstanding any legal agreement previously entered into between the leaseholder and the freeholder.”

Amendment 3, in clause 3, page 2, line 19, at end insert—

“(2) After section 4(5) of the LRHUDA 1993, insert—

“(6) The Secretary of State or the Welsh Ministers may by regulations amend this section to provide for a different description of premises falling within section 3(1) to which this Chapter does not apply.

(7) Regulations may not be made under subsection (6) unless a draft of the regulations has been laid before, and approved by resolution of—

(a) in the case of regulations made by the Secretary of State, both Houses of Parliament;

(b) in the case of regulations made by the Welsh Ministers, Senedd Cymru.”

(3) In section 100 of the LRHUDA 1993—

(a) in subsection (2), after “making”, insert “provision under section 4(6) or”;

(b) in subsection (3), after “making”, insert “provision under section 4(6) or”.”

This amendment would enable the Secretary of State or (in the case of Wales) the Welsh Ministers to change the description of premises which are excluded from collective enfranchisement rights. Such a change would be subject to the affirmative resolution procedure.

Government amendments 24 to 31.

Amendment 6, in clause 12, page 16, leave out from line 27 to line 20 on page 17.

This amendment would leave out the proposed new section 19C of the Leasehold Reform Act 1967, and so ensure that leaseholders are not liable to pay their landlord’s non-litigation costs in cases where a low value enfranchisement or extension claim is successful.

Government amendments 32 to 34.

Amendment 7, in clause 13, page 22, leave out lines 1 to 29.

This amendment would leave out the proposed new section 89C of the Leasehold Reform, Housing and Urban Development Act 1993, and so ensure that leaseholders are not liable to pay their landlord’s non-litigation costs in cases where a low value enfranchisement or extension claim is successful.

Amendment 2, in clause 14, page 26, line 40, at end insert—

“(ja) any matter arising under Clause [Estate management: compensation] of the Leasehold and Freehold Reform Act 2024.”

This is a paving amendment for NC2.

Amendment 1, page 28, line 11, at end insert—

“(8A) When considering any matter under this section, the appropriate tribunal must have regard to previous decisions made by an appropriate tribunal in matters which appear, to it, to be materially similar to the matter under consideration under this section.”

This amendment would require tribunals considering cases related to leasehold to have regard to precedent set by previous decisions of tribunals in similar cases.

Government amendments 35 and 36.

Amendment 17, in clause 22, page 39, line 14, leave out “50%” and insert “75%”.

This amendment would allow leaseholders with a higher proportion of commercial or non-residential space in their building to claim the Right to Manage.

Amendment 9, in clause 23, page 40, leave out from the beginning of line 27 to the end of line 27 on page 41.

This amendment would leave out the proposed new section 87B of the Commonhold and Leasehold Reform Act 2002 and so ensure that RTM companies cannot incur costs in instances where claims cease.

Amendment 19, in clause 29, page 46, line 26, at end insert—

“(iii) a statement of all transactions relating to any sinking fund or reserve fund.”

This amendment would require the written statement of account which the landlord will be required to provide to a tenant to include a statement of all transactions relating to any sinking fund or reserve fund in which their monies are held.

Amendment 12, page 47, line 16, at end insert—

“(8) Where a landlord of any such premises fails to comply with the terms implied into a lease by subsection (2), any rent, service charge or administration charge otherwise due from the tenant to the landlord shall be treated for all purposes as not being due from the tenant to the landlord at any time before the landlord does comply with those subsections.”

This amendment would require courts and tribunals to treat the landlord’s compliance with the implied term requirement for annual accounts and certification as a condition precedent to the lessee’s obligation to pay their service charges.

Amendment 13, page 48, line 11, at end insert—

“(9) Where a landlord fails to comply with subsection (1), any rent, service charge or administration charge otherwise due from the tenant to the landlord shall be treated for all purposes as not being due from the tenant to the landlord at any time before the landlord does comply with that subsection.”

This amendment would require courts and tribunals to treat the landlord’s compliance with the implied term requirement for annual accounts and certification as a condition precedent to the lessee’s obligation to pay their service charges.

Amendment 14, in clause 30, page 50, leave out lines 12 to 19 and insert—

“(4) P may not charge R any sum in excess of the prescribed amount in respect of the costs incurred by P in doing anything required under section 21F or this section.

(5) The prescribed amount means an amount specified in regulations by the appropriate authority; and such regulations may prescribe different amounts for different activities.

(6) If P is a landlord, P may not charge the tenant for the costs of allowing the tenant access to premises to inspect information (but may charge for the making of copies).”

This amendment would make the appropriate authority (i.e. the Secretary of State or the Welsh Ministers) responsible for setting a prescribed amount for the costs of providing information to leaseholders. That prescribed amount would be the maximum amount that freeholders and managing agents employed by them could seek to recover through a service charge.

Amendment 15, in clause 31, page 51, line 35, leave out “£5,000” and insert “£30,000”.

This amendment would raise the cap on damages under this section for a failure to comply with duties relating to service charges to £30,000.

Amendment 16, page 51, line 35, at end insert—

“(5A) Damages under this section must be at least £1,000.”

This amendment would insert a floor on damages under this section of £1,000.

Amendment 20, in clause 32, page 52, line 32, leave out from beginning to end of line 33 and insert—

“(a) exceed the net rate charged by the insurance underwriter for the insurance cover, and”.

This amendment would define an excluded insurance cost as any cost in excess of the actual charge made by the underwriter for placing the risk, where such cost is not a permitted insurance payment.

Amendment 21, page 52, line 35, leave out from beginning to end of line 6 on page 53.

This amendment, to leave out subsection (3) of the proposed new section 20G of the Landlord and Tenant Act 1985, is consequential on Amendment 20.

Amendment 22, page 53, line 18, at end insert—

“(5A) The regulations must specify a broker’s reasonable remuneration at market rates as a permitted insurance payment.

(5B) The regulations must exclude any payment which arises, directly or indirectly, from any breach of trust, fiduciary obligation or failure to act in the best interests of the tenant.”

This amendment would require “permitted insurance payment” to include payment of a reasonable sum to a broker at market rates for placing the cover, and to exclude any payments which have arisen from wrongdoing.

Amendment 10, page 60, line 2, leave out clause 35.

Government amendments 37 to 41.

Amendment 18, in clause 46, page 75, line 23, at end insert—

“(c) only where they are incurred in the provision of services or the carrying out of works that would not ordinarily be provided by local authorities.”

This amendment would mean that services or works that would ordinarily be provided by local authorities are not relevant costs for the purposes of estate management charges.

Government amendment 42.

Amendment 83, in clause 74, page 97, line 37, at end insert—

“(2) Within three months of the passage of this Act, the Secretary of State must publish guidance on the circumstances in which the Secretary of State will give financial assistance or make other payments under this section.”

This amendment would require the Secretary of State to publish guidance on the circumstances in which financial assistance would be made available for the establishment or maintenance of estate management redress schemes.

Government amendments 43 to 48.

Amendment 11, in page 104, line 30, leave out clause 83.

See explanatory statement to NC4.

Government amendments 85 and 49.

Government new schedule 1—Part 5: Amendments to other Acts.

Government new schedule 2—Categories of permitted lease.

Government new schedule 3—Leasehold houses: financial penalties.

Government amendments 50 to 53.

Amendment 4, in schedule 2, page 136, line 40, at end insert—

“(9) In setting the deferment rate the Secretary of State must have regard to the desirability of encouraging leaseholders to acquire their freehold at the lowest possible cost.”

This amendment would ensure that when determining the applicable deferment rate, the Secretary of State would have to have regard to the desirability of encouraging leaseholders to acquire their freehold at the lowest possible cost.

Amendment 5, page 138, line 6, at end insert—

“(7A) In setting the deferment rate the Secretary of State must have regard to the desirability of encouraging leaseholders to extend their lease at the lowest possible cost.”

This amendment would ensure that when determining the applicable deferment rate, the Secretary of State would have to have regard to the desirability of encouraging leaseholders to extend their lease at the lowest possible cost.

Government amendments 54 to 67.

Amendment 8, in schedule 7, page 168, line 15, leave out sub-sub-paragraph (a).

This amendment would ensure that all leaseholders, not just those with residential leases of 150 years or over, have the right to vary their lease to replace rent with peppercorn rent.

Government amendments 68 to 82, 84 and 23.

Let me begin by thanking Members in all parts of the House for their valuable contributions to the Bill. It is good to see that so many who have been involved so far are present; a number of them have been campaigning for these changes for years. I will not be able to name everyone, but I pay tribute to, in particular, my right hon. Friends the Members for Bromsgrove (Sir Sajid Javid), and for Newark (Robert Jenrick), my late right hon. Friend the former Member for Old Bexley and Sidcup, James Brokenshire, and my hon. Friend the Member for Redditch (Rachel Maclean), all of whom have played such important roles in preparing the ground for many of the measures before us today. They have all been invaluable in helping us to reach the point at which we deliver on the commitment that we made to reform a system that clearly needs change, and give millions the freedom, security and control over their life that comes with home ownership in its truest, fullest sense.

At a stroke, the Bill will provide that greater control for young people and many others. It will help to reduce unnecessary stress, uncertainty and wasted time by reforming a labyrinthine system and making it better. Buying a home, especially a first home, must be a moment of pride and celebration—a just reward for years of hard work, careful saving, sacrifices made, and doing the right thing. For some, however, the dream of home ownership is realised in soaring service charges, rip-off insurance commissions and escalating ground rents. Overall, and most infuriatingly, there is a sense of being left in the dark, and of a system that is working against, rather than for, the homeowner. That is bad for everyone, but it is notable that first-time buyers constitute nearly 50% of leaseholders; 15% of owner-occupiers are aged under 35. They are the future of our property-owning democracy, and they rightly expect and deserve to put down roots and have the same stake in society as previous generations.

I would welcome my hon. Friend’s views on that point. What he has said is entirely correct. I have met so many first-time buyers in my constituency who are trapped, because they are stuck in a cycle of increasing service charges. Even worse, facilities companies are not maintaining properties when there are serious problems. I am meeting representatives of one of them, FirstPort, at the weekend, but a great many other examples have been cited in the House. We are deeply concerned, because our constituents have sacrificed so much. They have put all their investments and savings into their property, but there is clearly no accountability or transparency, and we hope that the Bill will change that.

My right hon. Friend is absolutely right, and the support that has just been expressed for her comments demonstrates that many of us see these issues in our constituency. As she says, it is vital that we give people who have made such sacrifices in order to achieve first-time home ownership the right to, and the greatest control over, that ownership.

In my constituency, Victoria Avenue (Harvest Grove) Management Company seems to be extorting money from leaseholders and not providing any of the works that it says it is providing. It is taking them to court and charging them for the benefit of having letters sent to them with invoices. Through this Bill, we desperately need to redress the balance between freeholders and leaseholders. Will the Minister see that that is the case?

My hon. Friend is absolutely right. He makes a very important point about transparency, which is at the heart of the service charge changes in the Bill. He makes an extremely important point about fairness. Not all companies will be doing things that are incorrect, but where they have been found to be incorrect, it is important that they shoulder their own costs.

I thank the Minister for his generosity with his time. It is not only companies that are exploiting leaseholders; the St Mary Magdalene and Holy Jesus Trust in my constituency refuses to allow its leaseholders to extend their lease or buy their freehold. The charitable exception is very complex, and nobody wants historic houses to be sold, but these are ordinary terraced houses and the charity used to sell the freehold and, indeed, extend leaseholds in the past. Is it possible for the Minister to meet me or my constituents to look at how this issue can be addressed in the future?

I am grateful to the hon. Lady for outlining that issue; I know she has raised it in this place before. As she indicates, this is a complex area of law, but I am happy to talk with her separately on that matter in the coming weeks, if it is helpful.

How are we doing this? We are giving leaseholders more security over the future of their homes by increasing the standard lease extension term to 990 years, by making it cheaper and easier for leaseholders to buy their freehold, and by tackling unfair charges, exploitative practices and poor management. In doing so, we are overturning centuries of iniquity.

The Bill will also give leaseholders the control they deserve over the buildings they live in. At present, management companies are too often unaccountable to those who pay for them, meaning that they are able to charge excessive fees for poor-quality service. The Bill gives more leaseholders the opportunity to manage the buildings themselves, so that works get done properly and they have more of a say.

The Minister might anticipate the question I am going to ask, because I have asked it before. It is fine giving leaseholders easier ways to buy their freehold, until we come across companies such as Coppen Estates, which we have debated before. It just does not reply to letters. I think that we are now on our third recorded delivery letter to the company about the residents on the Flockton estate, who have just been sent enhanced bills for their ground rent charges, with no justification. They face threats if they do not comply. Where in the Bill is there any measure to make sure that Coppen Estates and the like respond properly in future or face consequences if they do not?

I am grateful to the hon. Gentleman. As he knows, we have debated the iniquities of Coppen Estates extensively, and I repeat that it is treating my constituents in a way that is inappropriate, in the same way that it is doing with his constituents over the border. Given that we are extending the opportunity for charges to go to tribunal, I hope that the hon. Gentleman’s constituents in Flockton will be able to go to tribunal and hold that company or other companies to account, should that be helpful.

Through the reforms, we will scrap the presumption that leaseholders must pay their freeholder’s legal costs, even when they win at tribunal, correcting another historical and unfair imbalance. Someone would not be expected to pay legal costs if they were successful in their claim in other cases, so leaseholders should not be treated any differently.

The Minister was most accommodating throughout the proceedings in Committee, and we are all grateful to him for the way in which he has listened.

Further to the point raised by my hon. Friend the Member for Sheffield South East (Mr Betts), the Minister will know that many developers have located themselves extrajudicially in places such as the Cayman Islands. Wembley Central Apartments Ltd in my constituency has finally ended up there, as have many others. What in this Bill will enable us to extend our reach and force such companies to respond, reply and do what the Building Safety Act 2022 already says they ought to do?

The hon. Gentleman makes an important point, which I know we debated in Committee. He correctly highlights the challenges in certain areas of enforcement. If I may, I will come back to that later in the debate.

I join my hon. Friend the Member for Brent North (Barry Gardiner) in recognising that this is not a partisan issue, because so many of us see the problems. The Minister talked about people not paying the costs when they win, but many will be shocked to discover that no precedent is set at a leasehold tribunal. We see companies exploit our constituents time and again, and it creates no precedent on which the courts and the tribunal courts could draw. Will he look at my amendment 1? It seeks to set that precedent and give people the protection of knowing that a freehold manager who has mistreated people will not be able to do it with impunity, because the courts will be able to take that into consideration if a tribunal has found that to be the case.

I am grateful to the hon. Lady, and I know that she feels strongly about this matter and has raised it previously. I am always happy to talk outside the Chamber, but the advice I have received is that, at the higher tier of the tribunal, there is the ability to give an indication of the direction of travel and a precedent can be set there. As I say, I am happy to talk to the hon. Lady separately.

In Committee, we made efforts to further improve and expand the Bill. We moved 119 amendments, including on expanding leaseholder rights of redress and providing new guarantees that leaseholders will receive sales information, and tabled a number of technical amendments to improve it. Today we are proposing further improvements, and I will now turn to the Government amendments on Report. I will first speak to new clauses 30 to 35, and amendments 23 and 49.

Building on the Building Safety Act 2022, the Government have tabled a number of amendments to clarify and extend protections in specific areas to further prevent freeholders and developers from escaping their liabilities to fund building remediation work. The Building Safety Act provided leaseholders with a range of protections to ensure that those responsible for building safety defects were made to carry out the works or pay for them to be carried out. However, before and during the process of remediation, relevant steps may be required to keep the building and the residents safe. Relevant steps include such measures as providing waking watches, fire sprinklers or simultaneous alarms. Unfortunately, there have been cases where the landlord has failed to put those in place or to pay for the relevant steps. That has caused the leaseholder to bear the financial burden or required the local authority to step in.

New clause 30 would place beyond doubt that the first-tier tribunal can order that the costs of the relevant steps are met when making a remediation contribution order or a remediation order. It is often the case that doing surveys or investigative works to discover the full extent of remediation required on a building takes time, money and effort, and those assessments can be invasive. New clause 31 would place it beyond doubt that the first-tier tribunal has the power to order that a respondent must arrange and pay for evaluations, surveys or expert reports to establish the full extent of a building’s defects.

On new clause 32, we know that in some instances, landlords of buildings that are 11 metres high or above are failing to provide alternative accommodation for leaseholders when they are decanted from their homes. This new clause would place it beyond doubt that, in addition to relevant steps and expert reports, the costs of alternative accommodation for leaseholders and other residents who are decanted from their homes can be recovered through remediation contribution orders.

On new clause 33, resident management companies and right-to-manage companies allow leaseholders to have more control over their buildings. However, such management companies are unable to fund litigation against non-compliant landlords, as they are unable to recover the costs for doing so from leaseholders in their buildings. This new clause would allow such management companies, where the relevant lease allows, to raise funds for remediation contribution orders, making sure that we continue to hold those responsible for life-threatening defects to account.

New clause 34 would repeal section 125 of the Building Safety Act, which was intended to allow for the recovery of remediation costs relating to residential buildings that are 11 metres high or above in an insolvency, and for these funds to be used to remediate the building. However, there is a conflict with insolvency law and a risk that, instead of being used for remediation, any sums recovered under section 125 could be directed to pay down the debt. This problem cannot easily be remedied, so we are seeking to repeal the section at this time.

New clause 35 proposes that regulators need to be made aware if those responsible for relevant buildings—that is, responsible persons—become insolvent. This new clause introduces a duty on insolvency practitioners to notify local fire and rescue authorities, local authorities and, where necessary, the building safety regulator.

I also want to speak to new clauses 42 to 66, new schedules 2 and 3 and amendment 84. We know that there is little justification for selling houses on a leasehold basis. For years, developers have exploited the sale of houses on a leasehold basis for the sole purpose of generating an income stream from ground rents and fees. This has been done at the expense of consumers, who receive little or no benefit in return. We promised to shut down this abusive practice by banning the sale of houses on a leasehold basis, and today we are doing so. Other than in narrow circumstances where a lease can still be justified, all new houses will need to be sold on a freehold basis.

I am really grateful for this news from the Minister. It certainly goes a long way towards addressing my new clause 13. He speaks specifically about banning leasehold sales of new houses, but what consideration will he give to extending that ban to leasehold flats? I know that that is a concern for a number of us on both sides of the House.

I know that my right hon. Friend has campaigned extensively for the ban on leasehold houses, as many in this Chamber have done, and she has spoken up in this place on the issue before. I am grateful for her support for it. She also rightly talks about the extensive debate about the potential extension of the ban to flats. The Secretary of State has said at this Dispatch Box on numerous occasions that the Government remain keen to make progress on finding an alternative workable solution to leasehold flats—most people in this place recognise that that will probably be commonhold—and work will continue on that. We hope to make further progress on that in the future—

Commonhold has clearly created a significant amount of interest.

I thank my hon. Friend for giving way, and for what he is saying. There are certain building companies in this country—Bellway Homes, for example—whose policy is to sell the leasehold to leaseholders and sell the freehold to a company that then exploits every aspect of the freehold, without even informing the leaseholder that they have done this. Surely we can close this loophole—we could close it this afternoon—by ensuring that the freeholder must give the leaseholder the first right of refusal to purchase the freehold.

My hon. Friend raises an important point. I know that it is covered in an amendment put down by the hon. Member for Sheffield South East (Mr Betts), and I will come to it later in the debate.

On the point made by the hon. Member for Harrow East (Bob Blackman), Bellway is certainly a company that has done this. Indeed, many people did not even realise that they had a leasehold house and only found out quite a while afterwards when all the costs started to come down the road. I welcome what the Government have done, but we must try to find a good solution for everybody who now finds themselves in this position, because in the years to come those houses could become very difficult to sell.

The right hon. Gentleman makes an important point about the need to ensure that this regime works. We recognise that there are challenges, which is why we are bringing forward a number of measures.

On the point about existing contracts that have been signed by people purchasing a leasehold property, is it the Government’s view that those were legitimate contracts and that there is therefore a risk in trying retrospectively to reverse the conditions of those contracts? Or is it the Government’s view that those were abusive contracts and that there is therefore a public policy interest in retrospectively eliminating the leasehold element of them?

I hope that I will be able to answer my hon. Friends’ questions in a moment when I run quickly through our amendments. We are banning the sale of leasehold houses in all but unusual circumstances, but for those that are out there at the moment, there must be an ability to ensure that they can buy the freehold and move from the leasehold challenges to a freehold. Let me deal with some specifics that I hope will answer some of the questions that have been raised.

I thank the Minister for giving way again. One problem is that many of these companies encouraged buyers to use their lawyers, who did not point out some of the pitfalls of leasehold properties.

The right hon. Gentleman is absolutely right, which is why I hope that measures such as new clause 51 go some way towards making it crystal clear that there is no way to get around this, and towards providing clarity to those who seek to buy a new property.

New clause 52 will require a statement on the front of all new leases declaring that it is a permitted lease and is not a long residential lease of a house. Should a developer make a dishonest declaration to His Majesty’s Land Registry, the homeowner may be able to exercise the redress right contained in new clause 54, which will allow them to acquire the freehold from the developer free of charge.

Under new clause 53, if a lease does not include the prescribed statements, His Majesty’s Land Registry will have the power to restrict the resale of the property until the right information and declarations have been provided.

The Minister is talking about the information on houses. Will it also apply to flats so that, before anyone buys a property, it must be explained to them that they are buying a lease and what that entails? I tabled new clause 38, which says that everyone buying a lease should be presented with a copy of the Government’s “How to Lease” document. Everyone in this situation should be given independent advice.

I am focusing on homes, and we have been emphatic and clear that the sale of leasehold homes will be precluded other than in exceptional circumstances. I am happy to talk to the hon. Gentleman both later in the debate and outside the Chamber about whether further consumer protections for those purchasing a flat may be proportionate and reasonable.

New clause 54 grants homeowners who have been mis-sold a new lease of a house the right to acquire the freehold from the landlord, as well as any superior leasehold interest in the property, for zero cost. New clauses 55 and 56 set out protections and reasonable limitations on this requirement, and new clause 57 provides for the Secretary of State to make regulations setting out further details on how redress can be obtained.

We understand that granting homeowners the right to redress alone may not be enough to prevent bad actors from attempting to breach the ban on the sale of leases on houses, which is why we are introducing a system of financial penalties where there is a breach. These penalties will start at £500 for a minor breach, rising to £30,000 for the most serious breaches. To enforce this system of fines, as set out in new clause 58, we are asking all local weights and measures authorities to play a part where they see infractions in their area. We will also set out how they need to work through new clause 60.

The chief responsibility for investigating and taking action will lie with the lead enforcement authority. Through new clause 61, the Secretary of State will have the power to appoint the right authority to fulfil this important role, while new clause 62 details the duties. By amending the Consumer Rights Act 2015, clauses 63 and 64 also vest the appropriate investigatory and enforcement powers essential for both the lead authority and local authorities to carry out the job.

Can the Minister assist me with a relatively unusual issue in my constituency? I have listened very carefully to his helpful speech. In the Loddon Park development on the edge of Woodley in my constituency, residents were sold properties only to discover in the small print of their contract, as my right hon. Friend the Member for Alyn and Deeside (Mark Tami) said, that they were expected to pay a standing charge to upkeep open space on this large development, even though they are freeholders of their own houses. Will the Minister look into this matter and write to me about what redress might be open to them?

I am very happy to write to the hon. Gentleman about the specifics.

In addition to the building safety measures and the ban on new leasehold houses, the Government have tabled a number of consequential amendments to refine and improve the Bill.

With the leave of the House, I will mention three key issues among the many that were brought to our attention in Committee. I understand these issues will be subject to further debate today, but I want to acknowledge that they are: capping existing ground rents, which has already been raised; leaseholder forfeiture, which I know will be raised; and support for the residents of freehold estates, which has already been extensively addressed.

I know that Members will have questions about the Government’s plan to address ground rents, and we have consulted on introducing a cap on ground rents in the Bill. We extended the consultation on request and, as a result, we are still considering our next steps. We will say more shortly.

The Minister is generous in giving way. Can he give us an indication of the timescale? Many Members will be interested to know the answer. And does he anticipate being able to introduce something when the Bill reaches the other place?

Although I cannot give the specific assurances that my right hon. Friend seeks, we are trying to work through this at speed. We recognise that it is an important issue, and we recognise that it is vital to today’s discussion. I know that hon. and right hon. Members will recognise that this is a hugely contested area in which there has already been significant discussion. People have very different views, so we want to make sure that, while we are moving at speed, we take our time so that we reach a conclusive decision through the right methodology and process.

My constituent is in a flat with a ground rent of £454 a year. As that is over the £250 threshold, it means that their property can be taken away from them if they fail to pay their ground rent. As a result, my constituent has failed to sell their property six times, even though they have had buyers. They are stuck in this flat, and they cannot get on with their life. Will the Minister please look at this threshold, which is causing real problems?

My right hon. Friend moves me on to my second point. We also recognise the strength of feeling on the vexed issue of forfeiture. The hon. Member for Greenwich and Woolwich (Matthew Pennycook) made a clear case on this in Committee, as did other Members, and I also heard a passionate and eloquent case in Committee from my hon. Friend the Member for Walsall North (Eddie Hughes).

Will the Minister simply remove any opportunity for forfeiture? It is arcane and has no place in our system. I strongly suspect that would get support on both sides of the House.

The House sees my hon. Friend’s passion, which he demonstrated in Committee and is demonstrating again today. Both he and my hon. Friend the Member for Redditch made passionate cases in Committee.

I recognise that this is a real and significant problem, and there is a huge iniquity at stake. I have heard from colleagues, both today and previously, about why we should act, and we are currently working through the detail of the issue. We will report back to the House with more details shortly.

Finally, a comprehensive debate in Committee on freehold estates was led by my hon. Friend the Member for North East Bedfordshire (Richard Fuller). He is a committed campaigner on this issue, and I know that many other Members also have very strong views. I have also been involved in this in places such as Alderman Park and Hunloke Grove in my constituency. We understand the strength of feeling on this issue, and we are considering it further.

Residents of estates across my constituency are trapped in extortive relationships with unaccountable private management companies while their estates go unadopted. On Second Reading, the Secretary of State expressed his willingness to bring forward and consider measures to make sure that residents have the right to manage on such estates, at a bare minimum, before considering wider action. Is there any reason why the Government would not accept new clause 7 in the name of the shadow Minister to finally give the residents of these estates the right to manage and to get out of these extortive relationships?

The hon. Gentleman made that case in Committee, and I am grateful to him for that and for repeating it today. As I say, we understand the strength of feeling on the issue and are considering it further.

I will give way one final time and then I will conclude, so that others can get in.

These management companies that the Minister alluded to have a literal monopoly over the residents they are meant to serve—in effect, they control the residents, rather than the other way round—so I welcome the amendments made in Committee to ensure that residents can change their management companies. Will he give a commitment to this House that he will ensure that those amendments stay in the Bill, both here and in the other place, and that they will become law?

My hon. Friend has been a campaigner for many years on the importance of this matter, and I know how strongly he feels and how much he acts on it on behalf of his constituents. We are absolutely committed to making progress on estate management. The Bill demonstrates a significant step forward in doing that, and we will see what else we can do in the future.

I am going to wind up so as to give others the opportunity to speak. To sum up, property ownership has been described as one of the bulwarks of individual freedom, and the measures I have described today are designed to give all homeowners, particularly the younger generation, the chance to gain a proper stake in our democracy. The Bill seeks to bring greater fairness, transparency and accountability to the system, and to give millions of people across the country a more secure foundation to get on in life, a stronger stake in our society and a solid platform for the future. I am grateful for all Members’ efforts to improve the Bill and for the scrutiny and debate it has received so far, and I look forward to hearing the further discussions to that effect this afternoon.

Order. Colleagues will see that a lot of right hon. and hon. Members wish to contribute to this debate, which has to finish at 6 pm. I will want to bring the Minister back for a short time. Another Deputy Speaker is taking over in a moment, but let me advise that those speaking from the Back Benches should be prepared to speak for between six and seven minutes, in order for us to get everybody in. I am afraid that that is because of the pressure on time. I call the shadow Minister.

The shadow Minister is right that there was a lot of consensus in Committee, so I hope he will not mind me probing him on some of the language he just used about the issue of setting rates. We all want to see what the Government do on deferment and capitalisation rates, but the shadow Minister used the term “punitive to leaseholders”. Does he accept that already embedded in the issues about ground rents and the changes here is a substantial transfer of value from freeholders to leaseholders, that the people who are more likely to suffer from punitive behaviour are those who entered into contracts historically from the freeholder side expecting that those values would be considered, and that it is a public policy decision that will change the value in those contracts?

Order. I am sure that everybody heard Madam Deputy Speaker’s request for brevity, as a number of Members wish to get in, and we have to accommodate everybody before 6 o’clock.

I agree with a large part of what the Opposition spokesperson, the hon. Member for Greenwich and Woolwich (Matthew Pennycook) said, and with nearly all of what my hon. Friend the Minister said. Where I disagree with the Opposition spokesperson is that I think the Bill is ambitious in what it is trying to achieve, although we would all like it to go further. It is quite remarkable that this is the first major bit of legislation to help leaseholders since 2002—although we have had the Building Safety Act 2022, the Fire Safety Act 2021 and other things, which did some things towards that.

It is remarkable how few people know much about the role of residential leaseholders. They own nothing but the right to live in a home for a period. I declare that I am a leaseholder. I have a flat in my constituency for which there have been no problems and for which the Bill will do neither harm nor good, and I also have another leasehold property. If I happened to gain from the measures, I would give the benefit to a good cause—I am not here for myself; I am here for those who have been suffering for years.

I wish I could be at the Westminster Hall debate on BBC impartiality, but it conflicts with this debate. It is now 20 years since the peace activist and photographer Tom Hurndall was shot by a sniper in Rafah. The subsequent nine months of inquiry by the Israel Defence Forces were shocking. However, I will leave that to the other debate.

On leasehold reform, I believe that we have opportunities—both in the House of Commons and, perhaps more so in the House of Lords—to make significant progress. My hon. Friend the Minister will point out to me the consultation on permitted development rights that started on 13 February. Towards the end of the consultation document, paragraphs 43,44 and 45 appear under the heading:

“Construction of new dwellinghouses on a freestanding block of flats”.

That is a reference to the inexplicable and disastrous Town and Country Planning (Permitted Development and Miscellaneous Amendments) (England) (Coronavirus) Regulations 2020—SI 2020 No. 632.

Those emergency covid regulations, accompanied by an economic assessment of which, to put it bluntly, I would have been ashamed were I a better economist, allowed owners, landlords and freeholders of certain blocks to put an extra one or two storeys on top without consulting the existing leaseholders at all. How any Government—let alone one I support—could have done that is beyond my comprehension. There had been a consultation some years before, and the general consensus was, “Don’t do it,” so why has it been done? I hope that people will look at the consultation, which is open until April, answer questions 27 and 28, and give explanations of their own experiences.

A developer tried to put extra floors on top of the St Andrews Gardens building in my constituency. That was turned down flat by the local authority, but its decision was overturned on appeal by the Government inspector. The developer then tried again, advertising for sale flats that do not exist, even though nobody wants them as they will cause significant harm.

My new clause 25, which I am indebted to Liam Spender of St David’s Square in E14 for drafting, says that the landlord or developer will have to pay compensation to leaseholders if the effects on them are harmful. The Minister’s legal advisers may say that the clause is not perfectly drafted, although I think it is pretty good. Even if he cannot accept it now, will he go through the replies to the consultation, have a talk with Members of all parties who represent those affected, and consider whether the Government can bring forward in the House of Lords proposals that would undo the effect of 2020/632 and implement some of the preferred responses to the consultation, to which he may not have time to refer in his winding up?

It is five years since we produced the Select Committee report on leasehold reform. It came after long years of campaigning by the all-party parliamentary group on leasehold and commonhold reform, and I particularly commend the efforts of the Father of the House, the hon. Member for Worthing West (Sir Peter Bottomley), who has just spoken; my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders); and our good friend Jim Fitzpatrick, who is no longer in this House, but who certainly made a major contribution to that. To be fair to the Government, it is good that we have made progress on many of the items in the Select Committee report. The caveat, of course, is that we probably have not gone as far as we would have wanted or as quickly as we would have expected.

When the Committee met, I remember going into a room with about 100 leaseholders from all over the country—the hon. Member for Harrow East (Bob Blackman), who was in his place a few minutes ago, was there as well—and hearing horror stories of people being ripped off in the sale of leasehold homes by developers. They were told that there was no difference between a leasehold property and a freehold property. They were told that by the solicitors who worked for them, because the solicitors were recommended by the developers. That was together with the free carpets in the living room that came as a bribe—that is what it was. Leaseholders were not aware that they would have to pay £300 to get a doorbell fitted if they wanted one because they had to get permission, or £3,000 for a conservatory, or whatever fees the freeholder chose.

Leaseholders were told that they could, within a couple of years, buy the freehold at a fixed price from the same developer. The problem, of course, was that by the time a leaseholder came to inquire about purchasing the freehold, the freehold had been sold to another party. There are lots of examples of that, which is why I have an amendment—new clause 39—that I want to push to a vote, although I hope the Minister will accept it. It is a simple amendment to say that before the sale of a freehold, the right of first refusal has to go to the existing leaseholder. That right already exists for leaseholders in flats, but not for leaseholders in houses. Why is that? That really cannot be justified or even explained.

Will the Minister accept just that one simple amendment? It would give leaseholders that right, and stop freeholders —we know that this happens—who want to evade the legislation, including the improvements the Government are bringing in, passing a property around from one organisation to a subsidiary to a third party, with a view to evading the legislation, so that leaseholders never know where to go to get the relevant freeholder to agree to the sale.

My hon. Friend is making an excellent speech. Does he agree that part of the problem is that some of the freeholders are based overseas, and it is extremely difficult for leaseholders to track them down? This is an ongoing issue that I hope the Government will look into.

Absolutely. I hope the Minister will have a look at the whole issue of freeholders who will not respond. That certainly applies to many who are overseas, with whom it is very difficult to get in touch.

I will not press new clause 40 to the vote, but the purpose of it is to say to the Minister that the default answer cannot be that the leaseholder can always go to a tribunal. Most leaseholders are simply ordinary residents trying to get on with their lives, who think it ought to be fairly easy to put in a request, get a calculation done and buy their freehold. They are not ready for these organisations, with all their lawyers and surveyors, that want to evade this and try to hide away, in some cases overseas, so that they cannot be contacted.

Can the Minister look at that issue? I know he is aware of it, because we share the same problem with Coppen Estates. There are others that are based overseas, but this one is based in a semi-boarded-up shopfront with a letterbox that never seems to be opened. That is the sort of company we are dealing with. They are small organisations that make a living out of charging ground rents from leaseholders, who cannot exercise their enfranchisement because of the attitude and evasion of the freeholders concerned. I hope that the Minister will have another look at that issue.

The other amendments I have tabled are about having professional qualifications and some form of regulation of property managers. The Government have legislated to say that the managers of social housing will need professional qualifications in future, but what is the difference between a manager of social housing and a property manager of leasehold blocks? In some ways, there may be greater complications in trying to manage a multitude of different leaseholders than people who have secure tenancies in a council or housing association block of flats. What is the difference?

Why will the Government not recognise that there are some good property managers who are well qualified, experienced and can be held to account, but others who are not like that? Indeed, some are put in place for that purpose: they are cheap, they do not have experience or qualifications, and they provide another way of avoiding the restrictions and rules that are rightly put on the management of property. They do not bother with proper service charge information or a proper list of charges for permission fees. I accept that the Government have tried to improve that, but in the end such improvements will only work if the individual or organisation managing the property does so in a proper way. Will the Minister look at those issues? What is the rationale? Why is there resistance to ensuring that people doing a serious and important job as property managers are qualified to do it and properly held to account through regulation?

Let me begin by declaring my interest as an adviser to the HSPG group, which among other things is a registered provider of social housing.

I rise to speak to new clause 68, which is based on a specific challenge that I have encountered in my constituency and that affects residents in more than 70 homes spread across three locations in the town of Hayle and the village of Mount Hawke. The experience of those cases exposes a potential gap in the Bill and in policy on the issue of shared ownership. The Bill deals at some length with standard leasehold agreements and the problems of extortionate ground rents, as well as with some of the issues around service charges and management companies with which we are familiar. However, in the early 2000s some agreements were put together that were technically leasehold agreements but that masqueraded as shared ownership agreements, even though those shared ownership agreements do not comply with the standards of modern shared ownership agreements.

The agreements I have encountered contain a number of defects, and I would like the Minister’s view on them. The first is that the freehold on those homes is not held by a registered provider. It was initially owned by the developer who built the sites, but it has changed hands twice. In a way that is familiar to many Members, the freehold has ended up in the hands of an offshore investment vehicle based in the British Virgin Islands, and with a company called Rockwell, which has not been easy for residents to deal with over the years.

The second major defect in the agreements is that there is no provision for staircasing or enfranchisement of the leaseholder’s share of the property. Residents typically own between 58% and 72% of their property, but their stake is fixed and cannot be extended. There is no right to extend under the agreement. The agreements are under a 990-year lease and there is no ability to extend that, although I appreciate it is a long-term lease.

The third defect is that even if residents could enfranchise and extend or staircase their ownership within the agreement, a section 106 covenant means that the properties must be sold to a local connection with a significant discount on market value. The way that has been worded in the agreement means that it is simply not worth the while of residents to increase their share, since there would be no value to the increased share that they would have.

Finally, there was something described as ground rent, although in practice a big chunk of that was effectively a rent on the shared ownership portion. The ground rent was initially around £20 per week, but that was linked to the retail price index on an escalating model. It has now got close to £2,000 per year for those residents, and it is still increasing rapidly.

All of those defects in that leasehold tenure arrangement or shared ownership arrangement—indeed, it appears to be neither one nor the other—mean that all of the properties have been judged unmortgageable by lenders, and that means the residents are trapped. They cannot sell their properties because no one can get a mortgage to buy them. These are people in my constituency who had a local connection. Typically, they are on modest incomes. These agreements and these homes were sold to them as a way to get a foot on the housing ladder, and for those residents it has transpired to be a complete nightmare.

I will say a word about planning and pay tribute to Penwith District Council, as it was then, and Cornwall Council. Planning was granted between 2004 and 2006, and the local planning authorities did their due diligence. They could see that this shared ownership model was defective, and they refused planning permission on all three sites on that basis. The Minister might ask how these homes were then built and sold under the arrangement, but I suspect he can predict the answer, which is that they were approved at appeal by the Planning Inspectorate, an agency within his own Department. The situation that my constituents face has been caused principally by a chronic failure of due diligence by the Planning Inspectorate, as is often the case with such issues.

In conclusion, my new clause 68 seeks to address a gap in the Bill and to give the Government the opportunity to atone for the mistakes of the Planning Inspectorate. It deals explicitly with shared ownership agreements and would create a statutory right to staircase ownership and put a cap on the rent of the freeholders’ portion of the home. I do not intend to press new clause 28 to a Division this evening, but I hope that the Government will consider the matter closely. I would like to meet the Minister or the Secretary of State and share with them and their officials a copy of the shared ownership agreement that my constituents are suffering under so much, with a view to seeing whether the Government might consider further changes at later stages of the Bill’s consideration to address a gap in it. Given that the Planning Inspectorate has been somewhat culpable in creating this problem for my constituents, I hope that the Government will seek to do that.

I support the general thrust of the Bill in all its attempts to deal with management charges, service charges and ground rents, but I hope that the Minister will agree to meet me to discuss some of these remaining issues.

It was 1 December 1998. I had been an MP for one year and seven months to the day, and I was chained to the railings of College Green by 200 cheering leaseholders. Thankfully, they were friendly. It was to illustrate that leaseholders felt that they are were prison. Those were the days before social media, and it was a photo op. The BBC ran the headline, “Leaseholders demand more control”. They still do.

Since then, we have had the Commonhold and Leasehold Reform Act 2022, which was an attempt to resolve some of the problems, such as forfeiture of a person’s home for a failure to pay a small service charge, the ground rent grazers charging money for no service and moneys not being held in trust in sinking funds. It is strange that after 25 years, these should be the very areas that yet another Bill on leasehold reform is pretending and failing to solve.

I say “failing”, because that is the reason I rise to support new clause 5, tabled by my hon. Friend the Member for Greenwich and Woolwich (Matthew Pennycook). It is ridiculous that a landlord can take away a person’s home worth hundreds of thousands of pounds for a simple failure to pay a minor service charge amounting to a couple of hundred pounds and where there is a dispute over whether the service was even provided. That is why I tabled new clause 16 about moneys being held in trust, which would implement a provision of the 2002 Act that has never been brought into force. We heard in Committee that the policy had strong support from stakeholders, including spokespeople for the Property Institute and the Leasehold Advisory Service. Even the British Property Federation has campaigned for this provision of the 2002 Act to come into force, yet it is not here in the Bill. Of course, 2002 was a time when nobody had even predicted the new rentier practices that freeholders and developers have since invented to extract money from homeowners for the privilege of living in their own homes: the scandals of leasehold houses; the repeated doublings of ground rents; and the inclusion of commercial areas and shared services in any development to stop any hope of residents exercising their right to manage.

There are a lot of good things in this Bill. I give credit to the Minister and previous Ministers for introducing it, and my hon. Friend the Member for North East Bedfordshire (Richard Fuller), who has played a massive role in bringing it to the House. It effectively bans the sale of new leasehold houses through new clause 42 that we have been discussing, extends leaseholders’ rights in various ways and increases transparency over service charges.

However, there are two big things that still need to be strengthened in the Bill, which we have spoken about in Committee and on Report. The first is to end the fleecehold estate model. New clauses 1, 2, 6 and 7 are relevant to that. I was glad to hear the Minister, who understands this issue, talking about going away and considering this further, but for the benefit of the Whips, what my constituents want is not for the Minister to consider it further but to ride in like a new sheriff on a white horse and sort out the fraudsters, scam artists and various cheats who are making their lives a misery. That is what we want on the Government Benches.

The fleecehold estate scandal is just like the Post Office scandal, except that it affects more people. In considering the Post Office scandal, many people have asked, “How could we not have known about this injustice? It ruined so many people’s lives for so long, yet nothing was done.” It is the same in this situation.

My constituency has lots of these new estates. Often, the first people know of the problem is when they receive a massive bill that they did not know was coming and that was not mentioned in the notes they were given when they bought the house. And, funnily enough, it was not drawn to their attention by the lawyers of the housebuilder, whose services they are often encouraged to use. Some of these bills are a really scary size and often escalate quickly over time. A huge number of people—more and more every day—are now affected. About 20,000 estates are affected, involving between 1 million and 1.5 million homeowners and potentially 3 million or 4 million people. According to the Competition and Markets Authority, over the past five years 80% of the freehold properties built by the 11 biggest builders have used this fleecehold model.

A lot of my residents describe it as being like paying a second council tax, except that if a local councillor is not doing a good job, they can be kicked out, but it is not possible to do that to a fleecehold landlord, no matter how badly they perform. New clause 6 would address that, and I hope that the Government will address it as the Bill progresses.

I think that everyone now knows how the fleecehold scam works. Back in the good old days, the builder would build a new estate, make sure that all the roads and so on were up to spec and pay a section 106 charge. The council would then take it over and run it, and if there was a problem, people could contact their local councillor. Under the fleecehold model, it is not so simple. In effect, there is collusion between the council and the developer. The developer agrees to hand over to a different company—it might own that company itself or hand it over to the residents—the running of many parts of the estate, be it the roads, the verges or other facilities. That means that the developer pays less in section 106, the council does not have to maintain the road and effectively they split the profits while the residents and the new tenants get the new, massive bill.

It is extremely inefficient to run things in that way in the real economy. Usually, the council goes from road to road with its verge-cutting lawnmowers—it uses one simple system. On one fleecehold estate, however, a guy drives down from Oldham, which is more than two hours away, mows a tiny bit of lawn and then leaves. It is economic madness. A lot of the charges that people are hit with involve opaque management fees for nothing. It is inefficient to run things in this way in the real world. There is a ticking time bomb here. In addition to the number of people affected by the fleecehold estates scandal, the second problem is that when things are not adopted, they do not go through a gateway where we can check whether they are up to scratch. I know from the experience of my constituency that a lot of things are done badly and then a huge bill will land on the people on these poor estates to sort out the problems in the future.

We heard all about this in Committee. I pay particular tribute to Harry Scoffin, the work of the group Free Leaseholders and the residents group HORNET—the Home Owners Rights Network. They all made a powerful case to abolish the fleecehold estates model entirely. As one witness told the Committee:

“This is my property. It is my hard-earned future…normal homebuyers are not qualified to manage estates. If we are given the right to manage, if we are looking at a development of over 100 homes, it is really hard to get in touch with 100 people who will agree and be on the same page. It is not workable.”––[Official Report, Leasehold and Freehold Reform Public Bill Committee, 16 January 2024; c. 54-55, Q133-134.]

I will give a few examples from my constituency. Karen is a brilliant lady who does lots of work for her community. She moved into a new Barratt home because she was bored of doing loads of DIY every weekend on her old home. She now finds herself spending massive amounts of time fighting a fleecehold company called FirstPort, a company so notorious that a national action group has been set up against it—the details can be found on Facebook—whose work I commend.

Karen explains:

“Barratt’s encouraged us to use their nominated conveyance solicitor for which in return we got £500 towards our legal bill. We were fools to do this, but money was tight…FirstPort didn’t do or arrange any grass cutting or anything by way of a service in the first two years.”

At first the bill was £35, and this year it will be £74. Karen continues:

“Our bill for the year includes: Property Damage & Public Liability Insurance…Terrorism Insurance…Grounds Maintenance…General Maintenance…FirstPort’s Management Fees”—

the most expensive item—

“Audit/External Accountant’s Certificate and Fee…General Reserve…Health and Safety Risk Assessment…This comes to £74.64 per house.”

She says:

“In the months of December, January and February each year I must spend more than a couple of days a week working on this. It’s like having a part time job. I didn’t move house to face the possibility of having to be a director of a residents’ ‘Right to Manage’ company. I want adoption…by the local council…as it used to be.”

She is right. Members may be asking, “Why are residents of this estate having to pay terrorism insurance for a fence?” That is a very good question, to which I do not know the answer.

Let me introduce Members to James—a brilliant, hard-working constituent of mine, who has had to do tons of work on the estate where he lives. He says:

“Councils should be adopting new estates”.

He says that he has done

“about 50 days’ work…over the first couple of years. We moved in in 2018 and it wasn’t really sorted until 2021—in fact it is still going on.

Had I not been proactive we would have ended up being short-changed.”

I rise to speak to new clause 3 and amendments 12 to 14. A huge number of new builds have been built within my constituency boundaries over the last months, the vast majority of which have been flatted. There have been numerous difficulties over the years, many of which I will not be able to cover today due to the time limit and your exhortation, Mr Deputy Speaker, to stay within seven to eight minutes; as the first woman to speak, I intend to do so.

I will start with Legacy Wharf in Stratford, where leaseholders have been stuck with a succession of management companies that fail them time after time. Under the former management company, shoddy—and probably overpriced—repairs were made by favoured companies at leaseholders’ expense over and over again, rather than any investment in long-term, high-quality maintenance. Residents were hugely suspicious about possible kickbacks from service firms to the management company and the use of companies under the management company’s ownership, rather than it seeking the best price and the best quality of service.

Thankfully, that management company has changed, but many problems remain. Residents have just been handed bills for 18 months of energy use all at once due to the management company’s mistakes. Service charges and insurance bills rocket year after year, with residents wondering what on earth has been done with their money: they have poor landscaping, broken lifts and inadequate fire doors; the security of communal areas is rubbish; residents have lost access to hot water and the boilers have not been serviced for as long as four years. Those are all serious concerns raised about just one building. Ultimately, when accountability is sought, there is absolutely no way to get a prompt response. When there is such as constant deficit of transparency, it inevitably looks like a way to cover up wrongdoing, mismanagement or incompetence.

I strongly welcome the provisions in this Bill on service charge transparency, and I add my support for the amendments tabled in the name of my hon. Friend the Member for Greenwich and Woolwich (Matthew Pennycook). Amendments 12 and 13 would surely provide additional support to my constituents, because they would mean that leaseholders would not have to pay service charges unless basic transparency and accountability were in place. Amendment 14 would enable a maximum cost to be set for the provision of information to leaseholders, preventing the abuse of such costs to effectively obstruct accountability—it ain’t on.

Leaseholders in every part of West Ham have faced massive difficulties getting accountability. I am reminded of events in the Hallsville Quarter development in Canning Town, where residents in several buildings had to leave their homes after a sewage ingress and power cuts. The two management companies responded in totally different ways: Grainger offered £50 a day in subsistence payments, while FirstPort initially offered just £15 a day and only raised it to £25 after enormous pressure. FirstPort had to be chased by me for multiple basic actions, and responded so poorly to residents whose lives had been turned upside down by problems that were absolutely not of their making.

Next, I would like to raise the continuing concerns of the residents of Chobham Manor about their estate charge, which has increased rapidly over recent years. The charge is supposed to help pay for the upkeep of the Queen Elizabeth Olympic Park, but many Chobham residents believe that it bears no relation at all to the amenities available to residents near the park. Despite my support, they have found it almost impossible to scrutinise the budgets they are paying for and to make sure that they ain’t paying through the nose for poor value for money. Chobham Manor residents frankly do not see what they are getting from the park in exchange for this charge, given that they are the only local residents who pay for it. I know that they will be grateful for an explanation of how they might benefit from the changes that the Bill will make.

I also want to mention, yet again, the continuing limbo of many residents of East Village in Stratford. Leaseholders there have lived under serious financial threat for well over four years now. The remediation needed to make their homes safe is still being held up because this Government’s previous legislation left the issue open to litigation. How can my constituents be reassured that this Bill goes further? The Secretary of State himself committed to using his planning powers to call in proposals submitted by irresponsible developers. I have to ask: will he make good on that promise and target those who are continually refusing to act on fire safety and leaving leaseholders on the hook?

In a final case from West Ham, diligent and determined leaseholders have successfully taken managing agents or freeholders to the tribunal for their dire failings. I am sorry to tell the House that these failings were across the board, including rat infestations, lack of insulation causing skyrocketing energy bills, no transparency on the huge service charges, building safety problems and a complete lack of accountability. Surely it should not have come to this.

We should not be depending on individual leaseholders to battle their way through obscure systems for their plight to get the attention it needs. MPs should not have to make dozens of detailed representations over and over again. It could not be clearer who has the power in these disputes, and in so many cases leaseholders are still paying the price for a system that is absolutely broken. Sadly, the legacy of years of failure to act creates understandable scepticism that change will come now, so I want to hear from the Minister today that he believes that the Bill will finally end this injustice.

It is a pleasure to follow the hon. Member for West Ham (Ms Brown). We share a similar part of the world: Essex and the east of London. In Romford, just as in West Ham and the London boroughs to the east of the capital, we have seen a huge increase in the number of flats and high-rise blocks being built over the last 20 years. Havering is a town and country borough and we have not had many flats in the past, but suddenly we are seeing huge numbers of that kind of accommodation being built. This brings huge numbers of problems with it, including what we are debating today.

I thank the Minister for bringing this Bill forward. I hope that it will deal with many of the issues that colleagues across the House have raised today, because they are very real. I sense that there is consensus on both sides of the House that serious action needs to be taken, because this can really destroy people’s lives and ruin them; they have saved to buy a property and they have a leasehold, yet they are fleeced by sharks and managing agents who pile on the costs, and by armies of lawyers who make their lives miserable and threaten them with losing their property all together. This is not right for the people we all represent.

I am now dealing with these cases in Romford on a daily basis. The hon. Lady mentioned many of the problems in West Ham, and I have examples in the Steelway apartments in the centre of Romford. I visited those apartments only a few weeks ago and saw the problems that people there are facing. They are failing to get responses from the management agents and those responsible, they are paying money for no service, and they are being ripped off by management agents who are not doing the job they are paid to do. I went to Rubicon Court, a fairly new development built only a few years ago, and was shocked—absolutely flabbergasted —to see how badly the residents are being looked after. The service they are paying for has completely failed. I saw mould, rats, rubbish and CCTV cameras that do not work. That is not acceptable and, when the Bill is passed into law, I hope the Minister will ensure that it is effective. It is no good passing legislation unless it is effective and comes into force quickly.

I can see that, across the Chamber, there is strong concern for leaseholders who are caught up in very difficult situations. I will first speak to new clause 67, which I tabled after a case came to my attention late last year. I will then speak in support of new clause 5 and amendments 4, 5 and 8 tabled by the official Opposition. These amendments relate to issues that have not been properly addressed by the Government, including forfeiture, the right to vary ground rent to a peppercorn, and deferment rates.

My motivation for tabling new clause 67 stems from what has happened to residents of Lee Court, a purpose-built art deco mansion block in my constituency dating back to the early 1930s. Many will remember the cold snap at the start of the year, when temperatures went below zero and Arctic winds swept across the country. Until mid-January, residents of Lee Court had not had any heating all winter. Furthermore, they did not have access to hot water for weeks and, prior to that, hot water provision was very patchy. This has seriously impacted many vulnerable residents, including the elderly, young families, people with medical conditions and many others.

Leaseholders at Lee Court repeatedly raised these issues with Drivers & Norris, the block’s former managing agent, and Grandpex, the building’s freeholder that has ultimate responsibility for the central heating system, yet little progress was made until it came to my attention and the attention of the national media. The residents’ plight included: a neglected communal area; a door leading to the roof that was hanging off its hinges; broken windows; exposed openings for rodents; weeds and plants growing through the drains; roof leaks; damp, mould and rot in communal areas; and the lack of heating and hot water that I have already mentioned.

Even though my constituents have now taken on the building maintenance and appointed a new managing agent, this situation illustrates the difficulty for leaseholders in securing recourse from freeholders who have responsibility for central heating and other maintenance issues. As a result, my new clause 67 seeks to open up a discussion on how to ensure that such situations never happen again to residents. It would require the Secretary of State to commission an independent evaluation on holding freeholders financially liable for long-lasting central communal heating failures, where the freeholder has a responsibility for this upkeep.

It is important for the Government to know that I am not asking for them to impose measures straightaway, but rather that I want them to pay closer attention to the problem at hand via an independent evaluation. There is clearly something wrong when vulnerable residents are left without heating for months on end despite raising their concerns with the managing agent. The only way they seem to be heard is by going to the media, and that is not acceptable. Residents’ health and wellbeing needs were put at risk by the failure to restore Lee Court’s central heating. The Government have a duty to look at how we can rectify this situation, so that it never happens again. Will the Minister say whether he would like to strengthen the voice of leaseholders? Leaseholders would like that—they need it.

More widely, this overdue Bill is welcome, but the Government’s planned reforms do not go far enough. This is why I particularly support new clause 5 which would abolish the right of forfeiture in respect of residential long leases where the leaseholder is in breach of covenant. I have heard the Minister say that the Government are working on this and will be looking at the issue, but the Law Commission proposed a repeal in 2006 and there has been no action to progress this for some 18 years.

Additionally, amendments 4 and 5, on deferment rates, are very important, because during a housing and cost of living crisis, with many families struggling to get by, it is important for leaseholders to acquire their freehold or extend their lease at the lowest possible cost.

Lastly, amendment 8 is important, because we must ensure that all leaseholders, not just those with residential leases of 150 years or over, have the right to vary their lease to replace their rent with a peppercorn rent. That is because the most common forms of lease are those of 90, 99 and 125 years, and so the Bill, as it stands, will mean that leaseholders with the most common forms of lease will not be able to enjoy the right to vary their ground rent to a peppercorn.

In conclusion, in contrast to the Government’s approach, a Labour Government will enact the Law Commission’s recommendations in full. Labour will make commonhold the default tenure for all new properties, in order to reform the leasehold system fundamentally and comprehensively. In my constituency, what has happened to the residents of Lee Court shows that the current leasehold system is not working. I suggest that the Government accept my new clause, as well as the Labour amendments.

I rise to speak to new clauses 13, 23 and 41, which stand in my name. I wish to place on record my thanks to those right hon. and hon. Members who supported me with my amendments and to the Public Bill Office for assisting with advice on their drafting.

Today’s Bill is important and I think we would all agree that it is long-awaited. I spoke on Second Reading, when I declared that I, like probably many others here, am one of almost 5 million leaseholders in this country. I am also one of the many who has gone through that awfully stressful process of extending a lease—that was prior to my being an MP. What I have learnt since becoming an MP is that the issue of leasehold affects not just London and our great cities, but constituents in places such as Aldridge-Brownhills. It affects people who have bought a house on a leasehold basis and many apartment blocks that were built perhaps 20 or 30 years ago. That is why I have taken such a keen interest in this piece of legislation. Buying a home is the biggest financial commitment that most people will make in their lifetime, but they are probably unaware of some of the complications they may experience later down the line.

I raised many questions on Second Reading and I wrote to the Secretary of State. My hon. Friend the Minister has been very engaged with me, but I gently say to the Department that a bit more engagement with Back-Bench Members would help enormously. That said, I am clear that I want the Bill to succeed, although in common with many other hon. Members I still believe it could and should go further. I will not push my amendments to a vote today, but I want to make a few points in relation to them.

On new clause 13, the prohibition on new leasehold homes within three months of the passage of the Act, I appreciate and welcome what the Minister said from the Dispatch Box. The Government have long been committed to the provisions in that new clause and I have sought clarity about what exactly they intend to do. I have heard welcome news today, but I will continue to press the point about commonhold because that matters. Moving forward, if we are to continue to look at this legislation and get it through this place, we will have to revisit this topic to ensure we get the best for our constituents, whatever type of housing or home they live in.

New clause 23 seeks a report on disadvantage suffered by existing leaseholders. In effect it was the sunset clause I referred to on Second Reading. The extent of the number of leaseholders who started the process of extending their lease during the passage of the Bill and the impact on them is unclear. Many will have been waiting to see the outcome of this legislation. Quite feasibly, that group will include people who have been forced to extend their lease in order to sell their home because, as we know, it is very difficult, if not impossible, to get a mortgage on a short lease. I am certain some leaseholders will not have been able to wait for the Bill to reach Royal Assent. Such leaseholders risk being seriously disadvantaged, so new clause 23 would take steps to assess and remedy any unfairness by considering issues such as marriage value, legal costs and other charges. I do not think we fully appreciate the size of this group compared to the number of people who will extend their leasehold after Royal Assent.

Similarly, new clause 41 seeks to redress the imbalance and unfairness of marriage value for those leaseholders who extended their leases many years ago or prior to the Bill passing through this place. By seeking to produce a report on disadvantage due to payment of marriage value, I hope we can better understand the extent of some of challenges around a system that, as we have heard today, is feudal, difficult to navigate and has disadvantaged many leaseholders over the years. It is important that we do not lose sight of the need to address the issue of marriage value.

The fourth area of concern is ground rent. I did not table an amendment on this issue but I will touch on it again. Many colleagues on both sides of the House have mentioned it. The Minister was clear in his response to me, but we need to continue to push forward for change.

I will support the Bill and I welcome the steps that have been taken. However, from the many examples that colleagues on both sides of the Chamber have highlighted today and the examples we have all seen sent to our inboxes by constituents, particularly around the challenges of service charge, it is clear that we need to go further. I will continue to gently nudge the Minister; he is nodding his head. He does a really good job and I am certain he gets the issue, but let us continue to work together for the benefit of our constituents.

I have nine Members trying to catch my eye, so if people speak for about five minutes, that will allow everyone to get in roughly equally. There has been some slippage, I can see that.

I rise to speak to new clause 24, which is in my name. It was also considered in Committee. I am most grateful to my hon. Friend the Member for Brent North (Barry Gardiner) for moving it there and to the Minister for his response. I am also grateful to the hon. Member for Loughborough (Jane Hunt) and the right hon. Member for West Suffolk (Matt Hancock) who have added their names to the new clause on the Order Paper.

I thank the Minister for his reply in Committee, but I think he missed the crucial central point of the amendment. At the moment, the risks of exposure to asbestos in a workplace are managed by the Control of Asbestos Regulations 2012, which is monitored by the Health and Safety Executive. For every workplace under those regulations, there is a duty holder responsible for monitoring the condition of the asbestos. They are required to keep up-to-date records of the location and condition of all asbestos-containing materials, to provide that information to anybody liable to disturb the materials, and to develop a plan for managing any risks that arise.

Residential blocks with a commercial freeholder will generally also have a duty holder, because the block will have been for them a workplace, so it is covered by the Control of Asbestos Regulations. It is usually the freeholder or their agent who is the duty holder. That duty holder is responsible for all the common areas in the block, such as foyers and staircases.

The effectiveness of this whole regime is debatable. The sixth report in the 2021-22 Session of the Work and Pensions Committee expressed considerable reservations. It is doubtful, I think, that the Health and Safety Executive is doing enough to monitor compliance, and the assumption that leaving asbestos in place is better than removing it is increasingly questionable as the asbestos ages. None the less, there is at least a clear regime for managing the risks.

The concern that motivates this new clause is that, following a transfer of the kind made possible and facilitated by the Bill, there will no longer be a duty holder for the communal areas in such a block. At the moment there is, but the responsibility will be entirely extinguished, as far as I understand it, on transfer. The asbestos is still going to be there, the risks will remain, but nobody will any longer be responsible for managing them. Understandably, no individual resident will take on the responsibility, but there will be no corporate entity to do it either. In fact, it may be worse than that. The residents may well not be aware before the transfer is completed that they are taking on both a financial liability for managing the asbestos in the communal areas, and possibly a risk to life as well. It is important to bear it in mind that we are seeing 5,000 deaths per year at the moment as a result of past exposure to asbestos.

In his response in Committee, the Minister said that the amendment would

“duplicate the existing duty in regulation 4 of the Control of Asbestos Regulations 2012 for landlords to survey the common areas of their property”.—[Official Report, Leasehold and Freehold Reform Bill Public Bill Committee, 30 January 2024; c. 461.]

However, the newly enfranchised property would not fall any longer under regulation 4. There would be no landlord to survey the common areas once the transfer has taken place.

New clause 24 aims to prevent this problem from occurring. It requires landlords to perform a detailed survey of the asbestos present in the building within three months of a transfer taking place and then requires the landlord to remove any asbestos that is there.There is a 150% tax relief for businesses removing asbestos from their premises, so removal will not be costly for landlords. It will save newly enfranchised leaseholders from a large and probably unexpected liability and a potentially lethal long-term risk. I hope that makes the case for this change clear.

I am grateful to the Minister for his assistance with the residents of Barrier Point in my constituency. I think we have a meeting in his office next month. Last night, I had my regular Zoom call with leaseholders from Waterside Park in my constituency. Before Christmas, we thought we had a clear way forward. Barratt, the builders, had signed up and Aviva, the current freeholder, was happy, but last night we learned of the requirement that the Building Safety Regulator to look at any proposal for a minimum of eight weeks, which will substantially delay the work that has been committed to. Will the Minister look at whether it is really necessary for residents who have been waiting so long for these problems to be resolved to wait another eight weeks?

I fully support the Government’s wish to overhaul the antiquated and feudal leasehold system in this country and address the imbalance of power between freeholders and leaseholders. I thank the Minister for his ongoing discussions with me about a number of issues I have with the Bill, and for attending the leasehold roundtable that I held recently with my constituents.

I would like the Government to abolish the system completely, but I understand that that will not happen with this Bill. I have therefore tabled an amendment and three new clauses that would improve the Bill further. New clause 12 would reduce the participation threshold required to claim the right to manage from 50% to 35%. That is a massive issue in Cities of London and Westminster. More than 1,300 properties in the City of London and an eye-watering 12,100 in Westminster have owners living abroad or are owned by companies using central London’s golden postcodes as a place to park their cash. That reduces the ability of leaseholders in those blocks to secure the 50% of signatures required to achieve the right to manage, as it is incredibly difficult to contact those overseas leaseholders for a meaningful discussion.

Let me give an example of that type of dilemma in my constituency. Residents in The Quadrangle in the Hyde Park Estate say that leaseholders in their block will struggle to meet the 50% participation threshold. They estimate that at least 40% of leaseholders in their block do not live in the building and are uncontactable. Accepting new clause 12 and lowering the threshold to 35% would give many more leaseholders living in similar blocks the chance to manage their buildings.

I commend the work that has been done on the Bill to support blocks that have shared commercial and residential usage. The Bill proposes to increase the proportion of commercial or non-residential space permitted in an individual block for a right to manage application from 25% to 50%, but I believe we can go even further. I have heard from many residents whose blocks will fail to qualify even after the threshold rises to 50%. For example, residents of 8 Artillery Row in Victoria believe that increasing the threshold to 50% does not go far enough, as the residential element of their block is lower than 50%. That is why amendment 17 is needed, as it would allow residents in a block with up to 75% commercial premises to apply for the right to manage.

New clause 14 is similarly designed to allow more leaseholders to strive for the right to manage, especially those in mixed-use buildings. Simply sharing a broom cupboard with a commercial property can disqualify them from claiming the right to manage. At Cambridge Court in Marylebone, for example, leaseholders striving to manage their block would benefit from the Government’s proposals to increase the non-residential threshold allowed in a building, but they are concerned that their ability to qualify for the right to manage would be undermined by the existence of a single shared car parking space in their building. My new clause 14 would amend the Commonhold and Leasehold Reform Act 2002 by adopting recommendation 5 from the Law Commission’s “Right to Manage” report, which is to allow leaseholders in mixed-use buildings with shared services or underground car parks to exercise the right to manage.

Finally, my new clause 15 would correct the unintended consequences of the Building Safety Act 2022. That Act has interfered with the long-standing section 24 regime, which was a vital right for leaseholders. It introduced an accountable person mechanism that expressly banned section 24 managers from being the accountable person. Consequently, specially trained and vetted professional property managers willing to take on difficult sites have been barred from being the accountable person. That makes absolutely no sense, and it stripped leaseholders of an existing right. That could not have been the Government’s intention when they introduced the 2022 Act, which was intended to provide leaseholders with additional statutory protections. So many leaseholders in my constituency and across the country would benefit from applying for a section 24 manager, but they cannot risk it if they are in blocks of 18 metres or higher because of the accountable person regime issue arising from the Building Safety Act. It is imperative that our buildings are safe, that leaseholders are safe, and that the burden does not fall heavily on leaseholders.

I will not press my amendments to a vote, but I hope that the Government will consider what I have spoken about and work with me to introduce the measures in the other place. This is a watershed moment for the Government to prove that they understand the terrible treatment that leaseholders have faced and continue to face by incompetent freeholders, and to address the imbalance between freeholder and leaseholder. I hope that the Bill will deliver real change.

I rise to speak to new clause 1, which was tabled in my name, and in support of a number of new clauses and amendments tabled by right hon. and hon. Members from both sides of the House.

I tabled new clause 1 because, as was said by the hon. Member for Harborough (Neil O’Brien), who is no longer in his place, fleecehold is a scam. It attempts to deal with the issue whereby a freeholder is trapped in a situation where they pay estate management charges for the areas around their development, be they roads, play areas or open spaces. Critically, the new clause also deals with the shared assets that might be in use to service their homes, such as ground source heat pumps, septic tanks or sewage pumps. I am sure that there are many instances in which the management company does a great job and charges reasonable fees for its work, but my inbox—like those of many hon. Members—contains horrifying examples of the management company, which is usually directly owned by or related to the developer in North Shropshire, failing to do a good job, or to do any sort of job at all.

There is a freeholder in my constituency, for example, who must obtain an information pack from their estate management company in order to sell their house. Despite repeated requests, my constituent has not received that information pack, so their sale has been significantly delayed and is at risk of falling through altogether. The management company is apparently just a shell—it does not respond to correspondence, hold annual general meetings or provide accounts—so the affected residents are powerless and cannot take control of the company and appoint a reliable professional to provide the services that they so desperately need. New clause 1 would allow them, where the management company has gone AWOL and will not respond to anything that they request of it, to take control of the company and do those things themselves.

The new clause also extends to assets, which may be more of a rural problem when it comes to shared estate charges. In one example in my constituency, a developer installed a ground source heat pump to provide all the heating and hot water for a barn conversion development that involved several houses in the same set of barns.

That developer has two separate companies: one is the management company through which he charges the owners of those houses for their electricity bill, and another, totally separate company that was nothing to do with the sale process, which is where he placed the heat pump. As such, he is able to cream off all the renewable heat incentive income for himself; he provides accounts to residents through the management company, but does not provide them with any information about the fundamental asset that is servicing their home. Those residents are unable to benefit from the renewable heat incentive that accrues from that asset, and do not know whether it is being properly maintained and serviced. They are unable to do so themselves—they have no rights in relation to that heat pump.

I draw to the hon. Lady’s attention and that of the Minister the article by Patrick Hosking in The Times today, which deals with estate management companies and estate management charges. I hope that the Government will read what he has written and see what they can do to make things better.

I thank the hon. Gentleman very much for his intervention.

I will conclude by saying that I support the amendments that would require professionalisation of the industry— that would be very sensible and consistent with other legislation that the House has passed. I also support new clause 5 and amendments 4 and 8, tabled by the shadow Minister, the hon. Member for Greenwich and Woolwich (Matthew Pennycook); new clause 39, tabled by the Chair of the Select Committee, the hon. Member for Sheffield South East (Mr Betts); and new clause 25, tabled by the Father of the House, the hon. Member for Worthing West (Sir Peter Bottomley). The Bill goes some way towards providing the protection that we need, but it needs to go much further to protect freeholders from rogue developers and estate management companies. I urge the Government to take that away and do more.

To protect the last six speakers and protect ministerial time as well, there is now a five-minute limit on speeches, which will give the Front Benchers sufficient time to respond.

It was a great pleasure to serve on the Public Bill Committee on this Bill. We had a great debate, and there was actually a lot of agreement across the Committee Room. These are deeply Conservative reforms, championed by none other than Mrs Thatcher, starting in 1965, which she continued to do throughout opposition and during her premiership.

I gently say to Opposition Members, of whatever party, that they must not fall into the trap of making this a political football. They must engage with the seriousness and complexity of these reforms, in part because, as we have heard, they did very little to advance these very significant reforms during their own time in office. I suspect that they backed away from it because of the very significant legal challenges they would have faced, as we ourselves will no doubt face. Pretending they do not exist is not a serious position. I say to the Minister and the Secretary of State, who are aware of my comments, that we must not buckle, but must continue to take this forward.

It is great to see the package of amendments laid by the Government, particularly new clause 42, which is a ban on leasehold houses. I want the Minister to think carefully about how he will address the inevitable imbalance in the creation of a two-tier system, in which some people will have the freehold of their house, but some will not. There is an additional imbalance between flats in our urban areas and new freehold houses. That point was very well made by James Vitali in a Policy Exchange report. I am slightly worried about the omission from this of retirement properties, so perhaps the Minister could return to that.

In Committee, I spoke about the need to truly move towards a commonhold system. I think the Opposition’s new clause 11 is something of that nature. I very much hope that, as the Bill goes through completing its stages, the Government—here or in the other place—can look at that suggestion. I think we do need to set out the future legislative scaffolding for our fifth term in office, and to build on the work we have done so that we can finally get rid of this leasehold system.

Other Members have mentioned a lot of the points I would have made about shared services. My hon. Friend the Member for Cities of London and Westminster (Nickie Aiken) raised that, and it is one of my concerns. My hon. Friend the Member for Harborough (Neil O’Brien) has done a fantastic job in talking about the lack of adoption by local authorities. There is also new clause 7, which I know is again an Opposition amendment, and new clauses 1 and 2. This problem is not going to go away. It is a blight on many homeowners in Redditch, and it also goes to the heart of our planning system. We really do need to look at that; we cannot pretend that it is going to solve itself.

I thank the Minister for writing to me about one of my concerns, which is litigation costs. I think new clause 3 looks at that. He has reassured me that what is in this Bill will go the distance in ensuring that leaseholders are not subject to unjust litigation costs by their landlord. That is one of the cases highlighted by Liam Spender and many others. These are hugely complex issues, but we must tackle them.

I want to see ground rents reduced to a peppercorn. It is pure extortion, and a feudal relic from medieval times when people were serfs and worked the land. We should not have this in 2024, or in any year. I refuse to believe that there is not a way, through the wit of man and the considerable intelligence of Ministers on the Front Bench, to solve the issue, perhaps where some financial assets are held in pension funds. I do not buy the pretence of that incredible con artist Mr Steve Whybrow and his outfit that somehow we are robbing pensioners. I would urge anybody with an interest in this debate to look at the genuine pensioners who are fighting for the right to have pure enjoyment of their own properties, which they richly deserve after a lifetime of working.

I will make my final remarks on forfeiture: it must go. The forfeiture of a long lease cannot be right. It cannot be right that a freeholder can hold this nuclear bomb over somebody such as Dennis Jackson, a pensioner, of Plantation Wharf. He disputed a £6,000 service charge, which led to an £80,000 legal bill, and he had his £800,000 flat forfeited during a 10-minute hearing at Wandsworth court. I thank the Knowledge Leasehold Partnership for all the work it has done to help him. That just simply cannot be right, and we must address it. I want to see us finally finishing the job that Mrs Thatcher started when she was Opposition Housing spokesman in 1965. We must finish that job, and I thank the Minister for all the work he has done so far.

I feel for the Minister today, because he must be kicking himself. This is probably one of the few debates I have heard in this place recently where I have not heard a bad idea. As constituency MPs, we see time and again the problems caused by retaining this feudal system of leasehold, and I suspect that the Minister, who has been looking at this issue for some time, is kicking himself because what he would really like to do is abolish the whole thing. Indeed, today we have heard support from across the House to do just that. In the short time available, let me say again to him that he would have our support to move to commonhold. He talked about how commonhold was probably the better model, and for those of us living in the vortex of gentrification, where thousands of flats have been built in our community, this is an incredibly pressing issue. We know that the casework we have seen over the past few years will expand as a result of leasehold continuing. That is why I wish to see the Government change their mind, perhaps in the other place, about getting rid of leasehold altogether, and why I have been pressing my local authority to listen to concerns of local residents who are stuck with leasehold, and change our local plan to make commonhold the default. I hope that they have heard this debate and will rethink their opposition to that.

I support the amendments in the name of my hon. Friend the Member for Greenwich and Woolwich (Matthew Pennycook), and wish to draw the Minister’s attention to two new clauses that I have tabled on issues with the existing system and the problems that leaseholders face. With 12,000 leaseholders in Walthamstow, I know that these issues will come up time and again.

New clause 2 is about the fact that although we have leasehold legislation, it does not tally with our consumer legislation. Leaseholders pay a service charge. They have a contract with freehold management companies to oversee problems in their properties, but few residents feel empowered to access rights that exist under the Consumer Rights Act 2015 to have a reasonable service within a reasonable timeframe for repairs. Today, colleagues across the House have given countless examples of that, so let me add my own, which is where my proposed new clause has come from. I am sorry that my hon. Friend the Member for Lewisham East (Janet Daby) is not here. She talks about Lee Court and new clause 67, but residents in Essex Brewery in Walthamstow have been without hot water and heating since before Christmas. Indeed, they are still without hot water and heating, with little sight of any change.

Essex Brewery was built just five years ago. It has become apparent that the build by Crest Nicholson was poor at best, and a downright con at worst. Until January this year, Crest Nicholson was on the management committee and made more than £100 million in profit in the year that Essex Brewery was built. It has made half that this year—possibly less—because of widespread concerns about the condition of the builds it has made. What does someone do when they have bought possibly their first home, whether through shared ownership or leasehold, as hundreds did in that development, and they find that the pipes that bring in the hot water are faulty? I am sorry to say that those resident have little redress, because the management company, Kinleigh Folkard and Hayward—another multimillion pound organisation—left them without any explanation of why it would not repair the hot water until after Christmas. What a Christmas present that was. The Grinch had strong competition.

That was another layer of bureaucracy. KFH was appointed by the Essex Brewery management company, which was established by the freeholder, Helpfavour, to meet those obligations. KFH told the residents that because their insurance policy said that as long as they had water at all, the property was habitable and it was not going to do anything about it. That has left hundreds of residents, many of them vulnerable, for months on end without any hot water or heating in the current weather. Residents have had to boil kettles to get hot water to cleanse their babies, or pay bills that they cannot afford for extra heating through portable heaters. For those who have shared ownership it is even more complicated. Metropolitan Thames Valley states that it owns 24 of those properties and that it is prohibited by law from fixing the problem. New clause 2 is about matching consumer legislation with leasehold legislation, and giving residents the right of redress, not saying, “You’ve either got to buy out the leaseholders if you want some property control, or you are stuck with them and waiting to see.” I hope KFH hears this debate and is ashamed of its behaviour.

Amendment 1 is about leasehold tribunals. I know the Minister spoke of precedent setting, but residents across the country would tell him otherwise. I beg him to look at the Warner properties in Walthamstow, and at Y&Y management, which repeatedly rips off constituents across the country. The hon. Member for Harborough (Neil O'Brien) is not here, but he asked why people have to pay terrorism insurance. In Walthamstow that was the Warner estate company, which said that because the plane bomber lived in our constituency, 3,000 households had to buy terrorism insurance. Such cases come up time and again with leasehold and they do not get fixed in the tribunal. Amendment 1 would give precedent.

For some of my Chelmsford constituents, these provisions cannot come soon enough. One constituent told me how he bought his leasehold flat seven years ago, but now he and his wife want to move to a bigger home to start a family and progress their lives. For the past three years, they have been unable to sell their flat. They have tried listing the property with many different estate agents and had many offers, but no buyer can get a mortgage on the property due to a clause in the lease that means the ground rent can be doubled every 15 years. According to my constituent, nobody in this block of 20 flats has been able to sell a property since 2018. They feel stuck.

The amendments tabled by the Government —new clauses 30 to 32 in particular—will offer my constituents some hope and a quicker means of redress on many of the points raised in the House’s discussions. I will press the Minister on some concerns raised by my leaseholder constituents and by all colleagues on the whole issue of remediation of defects, and transparency and accountability.

At one development in my constituency that opened in 2019—now a significant period of time ago—the residents experience a shocking case of misery and distress. The problems include water ingress, damp and mould, with children getting sick as a result, which is unforgiveable. There are also: damaged sprinkler systems; defective and non-compliant fire doors, which is unthinkable in this day and age; inadequate insulation—we have heard about water pipes and the lack of heating and cold water; roofing issues; damaged gates; and poor grounds maintenance. On top of that, when someone raises a complaint, guess what happens? Nobody does anything about it. However, whenever constituents get a letter, it is about their service fees increasing—it happens all the time. That is not acceptable.

The residents seek redress, but it just does not happen. Not only are they frustrated but we see a clear issue with buck passing; that is shameful and must be addressed. This property was a permitted development, and we should pause for thought on that. I am pro such developments—we need more of them—but we must ensure that charlatans do not come along and exploit people who are desperate to buy their first home, with all sorts of things happening in the building. I have had reports from residents who have purchased their property more recently, and guess what? They were not informed of all the defects and the problems going on. That is simply scandalous.

I want to mention again FirstPort—this should be a topic of wider debate in the House—and management companies. I am meeting FirstPort at the weekend. Again, why do these companies feel that they can be let off the hook? They will not engage effectively. In one case, leaseholders of a site in Stanway were not notified of a change in management company for about half a year. Every single colleague in the House will have cases of that nature.

FirstPort has refused requests to hold annual general meetings and has been lacking in visibility. If I may, I will praise Councillor Kevin Bentley, my county council leader, who is a divisional member for the area in question and has secured a public meeting for the weekend. It will be the first point when we have been able to get in the room with these people to seek redress. Contractors come in, and people are charged for monitoring works that never take place—it goes on and on.

I am grateful to the Minister for how he opened the debate, and spoke frankly about the issues and concerns. I have a suggestion to put to him. Yesterday it was announced that the Competition and Markets Authority will look into the practice of house builders and whether there has been collusion in pricing and the development of schemes. May I suggest that it might be worth looking into management companies? Many of those house builders come part and parcel with the management companies. The house builders do the negotiations with the management companies, and there is a lack of transparency. Should we be looking at more open book contracting around management companies, with details of how they are brought on board by the developers published, so that there is greater transparency for the purchasers? That is really important. As the Minister’s Department has already enlisted the CMA, he may wish to ask it to look at that important area as well. I hope that he can respond to some of those points when he sums up.

All hon. Members are grateful for the chance to raise these points, which speak to the totality of what we are seeing—a sense of a lack of fairness for many of our constituents, which the Government are clearly pressing in the right direction and seeking redress.

I very much welcome the Bill, which addresses the frustrations expressed by a great many leaseholders in my constituency. I thank Suzy Killip from the Pembroke Park Residents Association and Jo Tapper at The Sigers, both of whom have faced significant challenges while representing their communities and taking forward issues arising from the management and lack of services often provided to them under their lease arrangements.

I would particularly like to thank Ministers, because this legislation takes into account the way that the market has changed. Many years ago I started my career as a financial adviser, dealing with people taking out mortgages. One stark change is the extent to which leaseholds are seen as an opportunity to extract money from people as investments to be traded by freeholders, on the basis of extracting the maximum possible amount rather than ensuring good quality of services. I was involved in cases as a local authority councillor, where part of the planning agreement was that roads, parks and open spaces would be brought up to an appropriate standard to be adopted by the local authority. Once the development was completed, an opportunity was spotted by the developer and, therefore, people who had moved in on the understanding that the local authority would take over—because the roads were built to adoptable standard, for example—found that it did not happen because it was seen as an investment opportunity. That is very much in line with the rip-offs referred to by Members across the House.

I commend Ministers on taking a balanced approach on the need to recognise a link between the arrangements in the Bill and our housing supply. The UK has the oldest housing stock in Europe. The ability of freeholders of larger developments to regenerate sites where properties that have been rented are falling vacant over a period of time could be inhibited if there is a proliferation of small freeholds on those types of sites. If we are to ensure that the quality of our housing, in particular energy efficiency, is brought up to a good standard, it must still be possible for larger sites to be regenerated. We must not inhibit that completely while addressing a different concern about the rights and freedoms of leaseholders.

I mentioned some constituents earlier; the situation in particular at Pembroke Park is a good example of why the reforms in this legislation are so important. The development was constructed on a former military site by Taylor Wimpey, and handed over to be managed by A2Dominion housing association, with a mix of social housing tenants and private leaseholders. There are umpteen issues still more than a decade after the completion of that site, and issues simply getting A2Dominion to respond to problems including insulation that was never installed in buildings to the building regulations standard, a complete failure to ensure that proper ventilation was installed in the buildings, and drains that are completely inadequate. There has been progress, but I would add A2Dominion to the list of companies raised by other Members.

I commend A2Dominion’s relatively new chief executive, Ian Wardle, on the progress that he is making, but it remains a huge challenge to my constituents, and a huge frustration, that as opaque charges rise and rise, the actions of that organisation make it incredibly difficult even to understand whether the basic legal protections that they enjoy under existing legislation are being observed, including how insurance costs are apportioned across a very large property portfolio.

I strongly support the points made around forfeiture provisions. A number of constituents have come to me with significant challenges and justifiable concerns about the rising service charges on their properties. It is completely unacceptable that they would forfeit a significant amount of value that they have paid for and earned—potentially to fall to the developer. That is another opportunity for the shamelessly greedy to rip off our constituents. I am very glad that this legislation and the comments made by Members across the House today will represent a significant step towards ending that practice.

Thousands of homeowners in my constituency and millions across the country who face estate management charges will have their rights substantially increased thanks to the provisions in this Bill. I am extremely grateful to the Prime Minister, the Secretary of State, the Minister and his predecessor, my hon. Friend the Member for Redditch (Rachel Maclean), for including estate management charges in this Bill.

With the leave of the House, let me start by thanking all Members for their contributions to the debate. The breadth of discussion across the House has shown that while we can discuss precisely how far we should go, there is a general consensus that progress needs to be made, and I think all Members will accept that it has been and is being made in the Bill.

My hon. Friend the Member for Worthing West (Sir Peter Bottomley) tabled new clause 25, and he is right to say that it deals with an important issue. As he said, a consultation is open, and we will review the responses very seriously. I urge anyone whose views are as strong as those expressed by my hon. Friend to contribute to the consultation, so that we can consider the issue in the round.

The hon. Member for Sheffield South East (Mr Betts) spoke passionately about his new clauses 39 and 40, and I understood the points that he was making. I hope that some of the changes introduced in the Bill will make the acquisition of freeholds much easier. We have discussed regularly the need for a disincentive for freeholders not to respond or to “go slow”, which should mean that the right to first refusal falls away to the extent that it is no longer necessary.

I was sorry to hear about the problems experienced by the constituents of my right hon. Friend the Member for Camborne and Redruth (George Eustice). He was kind enough to mention them to me earlier, but I would be happy to meet him as he requested, because I recognise that the specific matter that he raised is important to his constituents, and we need to look into it in more detail.

The hon. Member for Brent North (Barry Gardiner), who served on the Bill Committee, made many useful points. I cannot do justice to all of them, but I am happy to continue the discussion about Daejan Holdings and building safety to ensure that, if there is an issue that the Government have not worked through fully, we understand the details better.

The hon. Member for West Ham (Ms Brown), my hon. Friend the Member for Romford (Andrew Rosindell), my right hon. Friend the Member for Chelmsford (Vicky Ford) and my hon. Friend the Member for Ruislip, Northwood and Pinner (David Simmonds) highlighted the huge inequity that is affecting individuals in individual blocks in their constituencies. That inequity is exactly the reason why we must make progress, and I hope that the Bill is a good proposition for that to happen.

The hon. Member for Lewisham East (Janet Daby) was kind enough to give me more details about the background to her new clause in a separate discussion. What I have heard about from her, and also from the hon. Member for Walthamstow (Stella Creasy)—who is not in the Chamber, but who has a similar concern—is absolutely unacceptable. I entirely appreciate the individual concerns that are felt, and I am keen to continue our discussion so that we can learn from it for the broader good of the building safety sector in general.

My right hon. Friend the Member for Aldridge-Brownhills (Wendy Morton) tabled an important new clause about leasehold houses. I am glad she recognised that the Government have now introduced measures to deal with the issue that she raised. She also raised two important points about reports, and I am keen to meet her so that we can discuss those further and, in particular, discuss the impact involved.

I can tell the right hon. Member for East Ham (Sir Stephen Timms) that we are looking into the issue of the Building Safety Regulator, and I will be happy to talk to him about that when we meet to discuss Barrier Point. Since his speech I have checked the position on asbestos. We do not believe that that right is extinguished, but if we are not correct I would be keen to talk to him further to ensure that we understand exactly how that regime will work in practice, and to try to assuage his concerns.

My hon. Friend the Member for Cities of London and Westminster (Nickie Aiken) exhorted us to move at this watershed moment. I am keen to talk to her further about the participation thresholds. She has made a powerful case, both to me in the House today and more broadly, about the importance of ensuring that this is workable, particularly in the circumstances that are faced in the centre of London.

While I entirely understand the point made by the hon. Member for North Shropshire (Helen Morgan) about some of these changes, I worry about her new clause, and I ask her not to push it to a vote. While her intentions are clearly noble, the new clause would put us into a position in which assets were being expropriated for the purpose of something that could be as insufficient as notice of an annual general meeting. I hope that she will reflect on that during the time we have left before the votes.

My right hon. Friend the Member for Witham (Priti Patel) made a strong point about the need to consider estate management further, and I have given a commitment to do so. FirstPort was raised by a number of Members, including my right hon. Friend. It may interest the House to know that my hon. Friend the Member for Harborough (Neil O’Brien) will lead a Westminster Hall debate on that tomorrow—so same time, same place, same discussion, but an opportunity to consider further the people and organisations that are not doing the right thing in this regard.

My hon. Friend the Member for North East Bedfordshire (Richard Fuller) has been an absolutely doughty champion of progress on estate management, and he is absolutely right to do that. His speech demonstrates again the strength of feeling about this issue and, as I said at the Dispatch Box a moment ago, we are considering it further and recognise the importance of doing that.

I turn to the contribution from the hon. Member for Greenwich and Woolwich (Matthew Pennycook), who speaks for the Opposition. He has tabled a new clause on forfeiture. I hope that the Government have indicated very clearly that we recognise the significant problems in this area and are working through the detail. Although I understand what he is trying to do with amendments 4 and 8, we think it is proportionate to retain the current position that we have set out from the Front Bench, for the same reasons as in Committee.

My hon. Friends the Members for Redditch (Rachel Maclean) and for Harborough made a very clear case about the importance of those on the Government Benches leaning into reform. In the time I have left, knowing that other parties and other traditions represented in this House will make similar cases—it is a shared endeavour in this area—I want again to make the Conservative case for leasehold reform. Building on our proud heritage of reform, it is a Conservative Government who are bringing forward the most transformational proposals for improving the lives of millions of leaseholders. It is a Conservative Government who are building the case for change to deal with the iniquities present on new estates, and who are committed to setting ordinary families free from unnecessary burdens. It is a Conservative Government who have brought forward one of the most comprehensive changes to property in a generation.

Why have we come forward with these proposals? It is precisely because it is a Conservative thing to do. We are cautious about interfering in the markets, for fear of unintended consequences or the creation of barriers. We know that no Government can ever fix every problem, but when we are convinced about the case for reform, we will fight for it with every sinew. At the heart of being a Conservative is the desire to smash monopolies and remove bad practice. We will celebrate where things work well, but we will joyfully remove distortions that are exploited by chancers and rogues. We will constrain rent seekers and middlemen, who add little to the basic economic exchange of goods and services that is at the heart of our economy.

Fundamentally, we are committed to making our markets more perfect and, as a consequence, to setting people free to make their own choices, live their lives and build their own future. Leasehold has been exploited for far too long by those who have no interest in the good functioning of capitalism. The lack of transparency, clarity and redress in freehold estate charges causes frustration up and down the land, and it does nothing for the efficient functioning of markets. That is why we are reforming.

Adam Smith talked of ground rents as monopolistic in 1776, Hayek reminded us in 1944 of the importance of making competition work and of not accepting institutions as they stand and, as my hon. Friend the Member for Harborough indicated, Margaret Thatcher asserted in 1982 that there is no prouder word in our history as Conservatives than “freeholder”. That is the centuries-long call as to why we have to make further improvements to our property system. With this Bill, in the true spirit of thousands of Conservative reforms that have made this country better, we are sending a clear signal that change for the better is coming and will benefit millions of people for the long term. That is only possible because of all the hard work of all the officials, all the people in the Law Commission and my opposite number, the hon. Member for Greenwich and Woolwich, who has been extremely constructive on this Bill.

I give huge thanks to Professor Nick Hopkins; Tom Nicholls and Chris Pulman at the Law Commission; officials in the Department, led by Robin Froggatt-Smith; my private office, including Grace Doody; and Members from across the House for their valuable input. Although I have just made the Conservative case for reform, we know that this is a shared endeavour among us all, which is why there is an unusual amount of unanimity in this place. It demonstrates the importance of our continuing to make progress on this issue.

As the Bill moves to the other place, I hope that those sat in the other place take note of the consensus and keenness here to ensure that progress is made. I hope they also take note of the importance of ensuring that the Bill continues and of the very many great reforms that are in it already. This demonstrates that together, as a broad group all across this House, we are committed to ensuring that leasehold reform happens, that leaseholders get a better deal and that the estate managers, estate management and freehold estates get clearer transparency, clearer information and a clear understanding of how they can live their lives and set themselves free in the future.