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Housing: Leaseholder Redress Schemes

Volume 749: debated on Thursday 7 November 2013


Asked by

To ask Her Majesty’s Government what progress is being made in producing the necessary regulations to implement the access to redress schemes for owners of leaseholder properties established by the Enterprise and Regulatory Reform Act 2013; and when they expect the scheme to be fully operational.

My Lords, before answering my noble friend’s Question I should declare that I am an owner-occupier of a leasehold property.

The Government are making excellent progress. The order enabling the approval of schemes was laid on 25 October. This should be debated in Grand Committee shortly. The order, which will make it a legal requirement for agents to belong to a scheme, will be laid as soon as we are satisfied that there are sufficient approved schemes. We expect that to be early in 2014. We have also recently announced a significant package of support for tenants in the private rented sector.

My interest is declared in the register so I have not redeclared it here. I thank the Minister for that reply, which will give great hope to many of the 3 million leaseholders who have been so adversely affected in the past by the failure to have any essential repairs carried out on their properties. These people had almost given up hope and it is good to know that progress is being made. Of course, I also thank the noble Baroness, Lady Hayter, for starting the whole thing going that got it into the Act in the first place.

I pay tribute to my noble friend for her efforts on behalf of leaseholders and join her in paying tribute to the noble Baroness, Lady Hayter. I also pay tribute to my much respected predecessor and noble friend Lady Hanham—together, they have achieved much. The requirement for managers to belong to a redress scheme will support the existing remedies by providing an alternative way of dealing with many of the day-to-day disputes that arise. I look forward to debating the orders and putting these important redress schemes in place so that all those who have felt let down until now will feel better supported in the future.

My Lords, the tribunal which replaces the leasehold valuation tribunal system is removing the £500 statutory limit on costs. As a consequence, will not many leaseholders now find it utterly impossible to go before a tribunal because they will be worried about what the final costs of their hearings could be?

Leaseholders will have the option of continuing to pursue a complaint through the tribunal system as the noble Lord has described, but they will also have this new route for redress through the new schemes, which will not attract a fee. By introducing these schemes we are able to offer people more opportunities to get the right outcome if they feel they have a legitimate complaint to make.

My Lords, I, too, acknowledge the work that has been done by the noble Baronesses, Lady Gardner and Lady Hayter, on this matter. Does the Minister agree that it is essential that people in leasehold properties understand their rights and obligations and the redress which is available to them as a result of this and other policies? Does she also agree that it is essential that people moving into the private rented sector—which is increasing, and must increase to help with housing problems—have the same knowledge?

My noble friend is absolutely right on those points. It is incumbent on government to make sure, through opportunities such as this, that both those living in leasehold properties and those in the private rented sector are aware of their new rights. It is incredibly important that we extend the private rented sector because one way of driving up standards is to increase choice for those living in the rented sector. I am pleased to announce today that we have agreed yet another new Build to Rent project, this time in Manchester, which will deliver 196 rented units by refurbishing three blocks of unused social housing.

My Lords, I add my thanks as well as my congratulations to both the noble Baronesses, Lady Gardner and Lady Hanham. It is a shame, of course, that the Minister voted against this when we first pushed it through but we are delighted that a sinner has repented. Given that the Government are now saying they want to give support to those who have been disadvantaged by the activities of letting agents, will they rethink their opposition to full regulation of letting agents, which we have also proposed?

I am grateful to the noble Baroness for paying so much attention to my voting record. This provision in the Enterprise and Regulatory Reform Act is the right way forward because it will provide, as I said, a new course of redress for leaseholders and tenants. We believe that once the schemes are in place they will drive up standards, which are so important, and that they will be able to do so without yet more regulation.

My Lords, can the Minister tell us how the Government will ensure that redress schemes, particularly any government-administered ones, complement and build on the existing regulatory functions of local authorities? In particular, will the Government ensure that such schemes will have effective operational links with the Greater London Authority, which is implementing the Mayor of London’s London rental standard?

As I understand it, in the rental sector—I am focusing now on the rental sector as opposed to leasehold properties—two redress schemes are already operating, and we certainly expect those two schemes to come forward for statutory approval. The new redress scheme was part of a wider package of measures that we announced a couple of weeks ago and that will provide greater support for those living in rented accommodation. We will certainly ensure, as part of that, that there is more support for local authorities, so that they can be even more effective in their responsibility to ensure that the accommodation provided in their area is of a high standard.

My Lords, since the noble Baroness has raised the issue of the private rented sector, I am sure she will be aware that for most people who are obliged to use that sector—which, of course, includes a number of Members of your Lordships’ House—the big issue is the enormous increase in rents over the past few years and the concomitant rise in payments to letting agents. Does she agree that it might be beneficial for the Government to investigate this market to see whether it really is operating in the consumer interest? At the moment, it is very much rampaging in the interests of those who let rather than of those who rent.

As I said in response to another question, the most important action we can take to ensure that rents are kept at a sensible rate is to ensure that an increasing supply of rented accommodation is accessible to people. We are very much behind that. One way in which we are doing that is with a £1 billion fund called Build to Rent, which is about creating new residences that are purpose built as rented accommodation. These new schemes—new blocks or estates—are designed to meet that fundamental purpose in the way they are constructed. Overall, however, although I understand the noble Baroness’s point, I think that average rent rises are running below inflation at the moment, certainly outside London.