My Lords, as we have heard loud and clear from the noble Lord, Lord Kennedy, in his introduction to this group, Amendments 42 and 43 relate to leasehold reform in the context of the levelling- up housing mission. They provide me with a good opportunity to bring the Committee up to date on the Government’s plans for reform in this policy area, and the action that we are taking now. However, I should first declare my interest as set out in the register as the beneficial owner of a freehold property that is subject to a long lease.
At the end of January, my right honourable friend the Secretary of State for Levelling Up set out his intention in Parliament to bring, as he put it, the “outdated and feudal” leasehold system to an end. The Government wish to extend the benefits of freehold ownership to more home owners, and that is why we have committed to end the sale of new leasehold houses and to reinvigorate commonhold so that it can finally be a genuine alternative to leasehold. It is why we have limited the charging of ground rent, as my noble friend mentioned, in most new residential leases, which takes away the incentive to build leasehold. It is why we will make it easier for leaseholders to purchase the freehold of their building and take control of their building management by enhancing enfranchisement and the right to manage.
Leasehold and commonhold reform will support the mission to level up home ownership and promote true home ownership for all by fundamentally correcting the power imbalance at the heart of the leasehold system and putting the power into the rightful hands of home owners. The Government’s reform package is advancing this agenda by building on the Leasehold Reform (Ground Rent) Act, which aims to make home ownership fairer and more transparent for thousands of future leaseholders by preventing landlords under new residential long leases requiring a leaseholder to pay a financial ground rent.
Furthermore, thousands of existing leaseholders have already seen a reduction in their inflated ground rent costs as part of the ongoing Competition and Markets Authority investigation into potential mis-selling and unfair terms in the leasehold sector. The Government are encouraging developers of all sizes to come to the negotiating table if they have not already.
The noble Lord, Lord Thurlow, referred to insurance. There are several issues around insurance, as I am sure he is aware. One of them is that leaseholders are often unable to gain visibility of the costs that make up their premiums, and nor do they have useful routes to challenge these. We will act by arming leaseholders with more information and will ensure that leaseholders are not subject to unjustified legal costs and can claim their legal costs back from their landlord.
The Government are committed to delivering the second phase of their major two-part leasehold reform within this Parliament. I am afraid the noble Lord, Lord Kennedy, will have to wait for the detail of the
Bill but, as he has pressed me on the question of reform or abolition, I can do no better than refer him again to my right honourable friend’s words. He made clear his intention to bring the system of leasehold to an end.
As part of these reforms, the Government remain committed to better protecting and empowering leaseholders, first, by giving them more information on what their costs cover, as I have alluded to, and, secondly, by ensuring they are not subject to any unjustified legal costs and can claim their own legal costs from their landlord.
My noble friend Lord Young of Cookham sought to press me on pre-legislative scrutiny. At this stage I can simply say that the Government welcome the work and engagement of noble Lords and other parliamentarians to date on leasehold and commonhold reform. We will of course consider how best to involve Peers, Select Committees, Members of Parliament and wider stakeholders in the development of any future legislation.