Commonhold and Leasehold Reform: Managing Agents

Gareth Bacon Excerpts

Thursday 2nd July 2026 Commons Chamber

[Gareth Bacon (Orpington) (Con)]

I thank the hon. Member for Vauxhall and Camberwell Green (Florence Eshalomi) for securing and leading this important debate. I pay tribute to the work of the Housing, Communities and Local Government Committee under her leadership, which generated a 159-page report containing a series of recommendations. I am conscious of time, Madam Deputy Speaker, so I will not comment on the remarks made by Members from all parts of the House, but I extend my thanks to all those who made considered and important contributions.

The Opposition support leasehold reform. As we have heard many times, there are approximately 5 million leasehold properties in England and Wales, and it is clear that the leasehold system comes with problems and requires change. For too many leaseholders, the costs just keep piling up. In 2023-24, the average ground rent paid by a leaseholder in England was £304. Alongside that, there was a 5.8% increase in the annual service charge, taking the average annual cost to nearly £3,000. In London, those costs are even higher, with an average of £412 charged for ground rent and service charges sitting at about £8,000 in some modern high-rises.

Even at their highest, the costs continue to rise, bringing more uncertainty for leaseholders. Service charges in particular can rise astronomically, leaving leaseholders having to pay thousands of pounds more than they ever intended or believed they would pay, and some flats virtually impossible to sell. On top of that, for too many leaseholders, the costs they pay come with no transparency about how their money is spent, how spending decisions are reached, and who signs off on them. Lack of clarity around these costs is a problem that policy makers cannot ignore.

Knowledge of these problems is not new. In 2018, the then Government established a regulation of property agents working group under the chairmanship of the noble Lord Best. The group examined the key issues impacting leaseholders and the need for reform in the sector. The group issued its report in 2019 and proposed a new regulator and regulatory regime, and a new enforcement system. Neither the previous Government nor the current one did a great deal to bring that about. Seven years later, we still await any meaningful Government action building on the recommendations of the report, and the draft Bill is silent on that issue.

It is not the only thing that leaseholders have to wait for. In two years, the Government have not yet implemented the full measures promised in the Conservative Government’s Leasehold and Freehold Reform Act 2024. The Government have said that they have their own plans for leasehold reform, but leaseholders have been told time and again to wait for a new Bill because of significant flaws in LAFRA. For two years, we have been told that primary legislation is required to fix the Act, but nothing has been done, and the draft Bill produced by the Government in January this year does not address the supposed flaws of the previous Act.

That prompts the question: where is that legislation and what is taking so long? Why are the Government proposing to bring forward a Commonhold and Leasehold Reform Bill that does not offer these fixes? If the eventual Bill remains in line with the previously published draft Bill, when can we expect the next Bill to address those changes? Assuming this Parliament lasts for a full term, we are now 40% of the way through its life, and we have had more Secretaries of State in that time than actual leasehold reforms.

The Housing Minister himself spent the end of his time in Opposition highlighting the need for speedy implementation of new rights for leaseholders, pressing the previous Conservative Government to

“give us a sense of the timetabling of some of the more important provisions in the Bill, because leaseholders watching our proceedings will want to know when the rights provided for by the Bill can be enjoyed.”

Well, he was clearly correct, so I wonder what the shadow Minister of that day would say to the Housing Minister of today. I believe he would ask the same question as me: if not now, then when? When can leaseholders expect to see their rights come into force?

At the end of January this year, the Government published the draft Commonhold and Leasehold Reform Bill. According to the draft Bill, leaseholders can expect a ban on leasehold for most new flats; a new commonhold system, including rules for mixed use, mandatory reserve funds and quicker debt recovery; a ground rent cap of £250 per year for many existing leases, which reduces to a peppercorn after 40 years; abolition of forfeiture and the introduction of a more proportionate court-based enforcement regime; and the repeal of rentcharge powers on freehold estates.

Perhaps most eye-catching of those is the much-touted ground rent cap, as the Chair of the Housing, Communities and Local Government Committee set out in her opening speech. The Opposition recognise the need to support leaseholders facing high costs, but while capping ground rent may sound like a silver bullet, for many leaseholders it might be closer to a damp squib. That is because ground rent is usually nowhere near the level of service charges, which can have a genuine and very real impact on a buyer’s ability to find a mortgage. For the many leaseholders burdened by excessive and unclear service charges and rising council tax, the ground rent cap is a mirage in a desert of higher council taxes, escalating service charges and poor building management.

While this move may have some marginal benefit to leaseholders, there could be ramifications elsewhere. Investors have expressed deep-seated concerns about the potential impact on investor confidence and faith in the UK system. That is because the UK has long been seen as a safe, secure and predictable place for sound investment, and ground rent investments, favoured by UK pension funds among others, have become an important part of that environment. The Government’s plans to unilaterally and retrospectively revoke key aspects of pre-existing ground rent contracts have rippled through our financial districts and risk significantly negative impacts on investor confidence, with a wider undermining of our economy.

The risk of freeholder insolvencies does exist and could be dangerous, as the Government know because their own impact statement lists freeholder insolvencies as a realistic cost that could have spillover impacts on leaseholders. If the Government get this wrong, there could end up being a significant, albeit unintended, risk to leaseholders—people with families and mortgages, or those living in their first home. All of this prompts the question: why is the Government’s focus on ground rent and not service charges? I hope the Minister will take the necessary time to address these very real fears and explain his choice.

As outlined by the hon. Member for Vauxhall and Camberwell Green in her opening speech, one of the main focuses of today’s debate concerns the question of the regulation of managing agents and the Select Committee’s recommendation that clauses providing for this are inserted into any forthcoming Bill. We have heard compelling arguments from hon. Members from across the House, and powerful testimonies.

With the Government’s plans for a wholesale market conversion to commonhold, this issue becomes all the more pressing. That is because in moving to commonhold, there is the prospect of responsibility for building safety and management for thousands of flats moving from professionals to residents. That might work perfectly with a dedicated, well-trained and attentive residents’ committee at the helm, but what about the multitude of buildings where that may not be the case? What happens when the roof begins to crack, the water starts to seep in and the lifts begin to break down? What happens when the sinking fund has been drained and the residents’ committee chair, who might be under mounting social pressure, is forced to cut service charges to unhealthily and impractically low levels?

If commonhold is to become the norm, we must ensure that the Government are not laissez-faire in how they implement the system. They must not blindfold residents who may sleepwalk into a situation in which their homes are under management without proper training, a strong mandate and adequate knowledge of building safety and flood risks. To guard against that, it may very well be that commonhold residents choose to hire a managing agent to care for their homes.

Managing agents exist today—some are good, and some are not—but, as I outlined at the start of my speech, many leaseholders have spoken about the bad experiences they have had at the hands of some agents. The difference between managing agents being appointed under a commonhold system rather than a leasehold one is that the managing agent’s client would be the homeowners themselves, not a distant freeholder. The residents themselves would have the power to hire and fire the managing agent. That is why the Committee’s recommendations are so important.

If there is to be a regulator, it must have teeth, as the noble Lord Best said in his 2019 report and implied again in his evidence to the Committee on 10 March, and as the hon. Member for Vauxhall and Camberwell Green said in her speech. If there is a regulator, it is absolutely crucial that it works as intended. It would need to have the requisite expertise, personnel and budget to discharge its duties efficiently. Lessons must be learned from the failings of other regulators, such as the Building Safety Regulator.

The Government are considering bringing their Bill forward and examining the Committee’s work. If the Government decide to heed the recommendations of the Committee, I hope the Minister will commit to working across parties and with the whole industry to ensure that the Government get it right the first time.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Minister Pennycook has agreed to give a short speech to accommodate the next debate.

Oral Answers to Questions

Gareth Bacon Excerpts

Thursday 30th October 2025 Commons Chamber

[Peter Kyle]

I am grateful for my hon. Friend’s question— I am glad he got in today. I can assure him that we are working closely with pubs. We want pubs to be at the beating heart of communities up and down the country. We know we have inherited a challenging environment for pubs. We listen to them and will be acting.

[Gareth Bacon (Orpington) (Con)]

T7. Earlier, the Secretary of State said that he was committed to growing our car industry, but British car manufacturers face huge fines for selling cars that consumers actually want, while the Government use taxpayers’ money to subsidise the purchase of foreign cars with Chinese batteries in them. What are the Government’s plans to end the nonsensical zero emission vehicles mandate, and to restore a normal market, from which our car industry would benefit?

[Peter Kyle]

You would have thought, Mr Speaker, that the hon. Gentleman might say a good word about our British automotive sector. The trade deal that we struck with America—the first and the best such trade deal—protected 44,000 jobs from the tariff challenges being felt around the world. We are creating new opportunities and investing. As the House saw, the Government acted at speed to protect Jaguar Land Rover and its entire supply chain in its hour of need. This Government act when we need to and create opportunities wherever we can, and we will continue to do so.

Oral Answers to Questions

Gareth Bacon Excerpts

Thursday 31st October 2024 Commons Chamber

[Mr Speaker]

I call the shadow Minister.

[Gareth Bacon (Orpington) (Con)]

The Government’s impact assessment for the adult social care sector confirmed that collective bargaining will be very costly for business. If pay awards match those of junior doctors, the cost of the increased wage bill will be £5.8 billion, driving up business rates, reducing employment or hours, and imposing further costs on business. Can the Minister confirm when further collective bargaining will be rolled out, to which sectors, and by how much those businesses can expect to be clobbered?

[Justin Madders]

If the shadow Minister is complaining about the state of the adult social care sector, he should look to his own party and how the sector was left to rot for 14 years. The impact assessment says that the overall cost to employers will be 0.4% overall and, as the economic analysis says, the make work pay package will help to raise living standards across the country and create opportunities for all. I think 0.4% is a fantastic achievement to get such a deal. If he does not want to support improved working conditions for people, an end to fire and rehire and better maternity protections, he should continue to vote against the Employment Rights Bill, but I do not think his constituents will thank him for that.

Paternity Leave and Pay

Gareth Bacon Excerpts

Wednesday 23rd October 2024 Westminster Hall

[Gareth Bacon (Orpington) (Con)]

It is a pleasure to serve under your chairmanship, Mr Pritchard. I congratulate the hon. Member for Telford (Shaun Davies) on securing the debate. I also thank the numerous Members who contributed to the debate. I would run through them all—I have written them down—but there are 17 and I am conscious of time, so I will move forward.

I welcome the fact that so many Members have come here to talk about this important subject. Opposition Members want to ensure that employees do not have to choose between a rewarding career and a fulfilling life. Due to reforms that were introduced by the previous Government, Britain now has a vastly improved paternity leave package.

In July 2019, the previous Government consulted on whether the existing arrangements for parental leave and pay were adequate, and whether more could be done to better balance the gender division of parental leave and pay between parents. The consultation sought views on the costs and benefits of reforming parental entitlements and any trade-offs that might need to accompany such reform. The Government response, published in June 2023, set out detailed reforms to paternity leave and pay, fulfilling a previous manifesto commitment to make it easier for fathers and partners to take paternity leave. The reforms included: giving employed fathers and partners more choice and flexibility around how and when they take their paternity leave, as we have just heard, allowing them to take two separate blocks of one week of leave; giving employed fathers and partners the ability to take their leave at any time in the first year after the child’s due date or birth, rather than just in the first eight weeks after birth or placement for adoption; and changing the requirements for paternity leave to make them more proportionate to the amount of time the father or parent plans to take off work, cutting the amount of notice of dates from 15 weeks before the expected week of childbirth to 28 days before the leave will be taken.

Moreover, the previous Government supported the passage of what was then called the Shared Parental Leave and Pay (Bereavement) Bill—a private Member’s Bill introduced by the hon. Member for Bridgend (Chris Elmore), who was at that time the hon. Member for Ogmore—to remove the qualifying employment condition for shared parental leave when the birth mother or adopting parent had died. I pay tribute to the hon. Member for Bridgend for steering the Bill through Parliament. It provided an important extension of support and protection for parents facing one of the most challenging situations in their lives.

I am conscious of time, so I shall wind up. His Majesty’s Opposition have taken note of the measures proposed in the Employment Rights Bill concerning paternity leave and pay. The Conservative party has always been the party of business, but we have also been pro-worker; getting the balance right is vital. We will therefore closely review the Bill’s provisions as it progresses through the House and will assess them on their individual merits.

Whistleblowing Protections

Gareth Bacon Excerpts

Tuesday 22nd October 2024 Westminster Hall

[Gareth Bacon (Orpington) (Con)]

It is a pleasure to serve under your chairmanship, Sir Mark, and I congratulate the hon. Member for Stoke-on-Trent Central (Gareth Snell) on securing this debate. I thank the hon. Members for Wokingham (Clive Jones), for Strangford (Jim Shannon), for Hackney South and Shoreditch (Dame Meg Hillier), for Congleton (Mrs Russell) and for Redditch (Chris Bloore) for their contributions this afternoon.

I welcome the fact that so many Members recognise how valuable it is that whistleblowers are prepared to shine a light on wrongdoing and believe that they should be able to do so without recrimination. Whistleblowers do absolutely crucial work to expose wrongdoing and ensure accountability. Forty-three per cent of economic crimes are highlighted by whistleblowers, and workers are often the first people to witness any type of wrongdoing within an organisation. Information that workers may uncover could prevent wrongdoing that may damage an organisation’s reputation or performance, and in extreme circumstances, even save people from harm or death.

For authorities tackling corruption, fraud and other forms of crime, whistleblowing is a crucial source of evidence, as those activities and their perpetrators can often be exposed only by insiders. That was keenly felt during the height of the covid-19 pandemic when the Care Quality Commission and the Health and Safety Executive recorded sharp increases in the number of whistleblowing disclosures that they received; and during the Horizon scandal, when a whistleblower was featured in a BBC “Panaroma” documentary in 2015, as has been mentioned, which helped to expose the truth, contributing to the successful postmasters’ legal case in 2019.

The UK’s whistleblowing framework was introduced through the Public Interest Disclosure Act. It was intended to build openness and trust in workplaces by ensuring that workers can hold their employers to account and then be treated fairly. It provides a route for workers to make disclosures of wrongdoing, including criminal offences, the endangerment of health and safety, causing damage to the environment, a miscarriage of justice or a breach of any legal obligation.

The previous Government recognised that there was weakness in that framework and made numerous attempts to improve it. In 2013, the Government published a wide-ranging call for evidence on the effectiveness of the framework, and in 2014, set out a plan of legislative and non-legislative means to improve it. That plan included extending protections to student nurses and midwives, regularly updating the list of prescribed persons and introduced a requirement of prescribed persons to produce an annual report on whistleblowing disclosures that they receive.

Moreover, under the guidance of my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake), the previous Government launched a review in March 2023 of the whistleblowing framework. That review examined the effectiveness of the framework in meeting its intended objectives, which are to enable workers to come forward and speak up about wrongdoing and to protect those who do so against detriment and dismissal. The initial fact-finding element of that work was completed by Grant Thornton in January this year, as I think the hon. Member for Stoke-on-Trent Central mentioned in his opening speech. The Government response and the recommendations were awaited, and that work was yet to be completed before the election was called.

We on the Opposition Benches welcome the Government’s decision to strengthen protections for whistleblowers, including by updating protection for women who report sexual harassment at work. We will support the related measures in the forthcoming Employment Rights Bill. As Protect set out, this will

“send a clear signal that anyone who has been sexually harassed, or witnessed it, can raise their concerns through whistleblowing channels and will be protected from being victimised or dismissed if they do so.”

The Government have not yet published a response to the review of the whistleblowing framework. The review would provide an up-to-date evidence base on whistleblowing, allowing the House to effectively scrutinise the Government’s proposals. Will the Minister commit to publishing that review and, if so, when?

Oral Answers to Questions

Gareth Bacon Excerpts

Thursday 5th September 2024 Commons Chamber

[Madam Deputy Speaker (Judith Cummins)]

I call the shadow Minister.

[Gareth Bacon (Orpington) (Con)]

The Government have repeatedly stated that securing economic growth is their fundamental mission, and that is, of course, an entirely laudable aim, but the fact is that more red tape will have the opposite effect. In the light of the right hon. Gentleman’s plans to introduce radical new labour laws, what would he say in response to the Federation of Small Businesses, which has made it clear that firms are increasingly worried about the Government’s proposals, fearing that they will drive up the costs and risks of doing business and thereby reduce their competitiveness and financial stability?

[Jonathan Reynolds]

I welcome the hon. Gentleman and the new shadow ministerial team to their posts. I have sat on those Benches in many questions sessions and understand how it can be at times.

Businesses of all sizes overwhelmingly supported the Labour party at the general election. How we behave in government will be exactly how we behaved in opposition, and we will co-design policy to ensure that. There is nothing in what we call the plan to make work pay—the new deal for working people—that is not already in the public domain. We had a manifesto with all that in it.

It is important to recognise—[Interruption.] There is a bit of chuntering coming from the Opposition Front Bench; again, something that I am not unfamiliar with. Look at the success of businesses in this area. Look at the businesses that already recognise trade unions and that already pay the living wage—look at that success. We are going to raise the employment floor, but it will be to a level above which many UK businesses are already operating. It is important to talk about the really successful things that businesses are doing to make sure that their workforces are treated with dignity and respect and get the living standards and prosperity that Members on this side of the House are all about delivering more of.