Protection for Homebuyers

Debate between Drew Hendry and Jim Fitzpatrick

Thursday 13th December 2018 Westminster Hall

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

It is a pleasure to serve under your chairmanship this afternoon, Mr Sharma. I congratulate the hon. Member for Stretford and Urmston (Kate Green) on bringing not only a very important but a highly interesting debate to listen to, which has included various Members around the Chamber. It is very challenging to sum up the debate because there have been so many powerful points made by so many hon. Members, but I will do my best to pick out some of the key points as I saw them.

The hon. Member for Stretford and Urmston talked about the unhappy homebuyer experience and the impact that has on people when they have made a huge investment in their future. She also mentioned the number of problems that occur, particularly with new homes. Giving due praise to good home builders is important, because there are many. I am very fortunate: in the highlands, due to the scale—it is probably not the same scale as in other urban areas—the home builders are very good in general. They are not without problems—there are still issues, which I will talk about later. The hon. Lady was right to pick out those large developers who are getting away with some of the things she described.

The hon. Lady said that buying a home was one of the big, significant life changes, but that buyers were having to buy their houses more or less without having seen the final build. She also talked about the introduction of the new homes ombudsman. Like her, I would like to know more about what that will entail. It would be useful if the Minister covered some of those points, albeit she may want to do so briefly. The hon. Lady was right also to highlight the dangers of a voluntary approach when there is clearly such a widespread problem in house building.

The hon. Member for Poplar and Limehouse (Jim Fitzpatrick) mentioned issues for leaseholders as opposed to freeholders, and went on to address issues with ground rents and service charge hikes. I will talk later about property factoring charges. Those are important issues for people. Importantly, he also mentioned fire safety and sprinkler legislation, and pointed out the moves to tackle those issues in both Wales and Scotland.

The hon. Member for Ellesmere Port and Neston (Justin Madders) mentioned shocking additional charges that homebuyers uncover after purchase. That is clearly wrong. No one should be put in a position where they buy blind and suddenly find additional costs coming out of the woodwork—literally, in this case.

It is important to highlight the serious issue of solicitors’ conflict of interest, which a number of Members raised. It makes no real sense for the system to exist in that way. Clearly, there has to be segregation so people have confidence in the legal process when they buy a new home. The hon. Gentleman talked about people being pressured to use a solicitor from a panel due to purchase time pressures. Consumers should not be put under pressure when making a purchase of such magnitude in their lives. He challenged the Minister on those issues. He also raised the issue of paying maintenance charges twice, which I will come to, and suggested that the Minister might want to look at a retention scheme.

The hon. Member for Kingston upon Hull North (Diana Johnson) told us, shockingly, that she had waited five years for a meeting. That is disgraceful, and she rightly named and shamed Persimmon for doing that. She mentioned the issue of sinking gardens, which sounds horrendous, and one householder’s fear that her fence and land would slip into the drain, which the council could not take enforcement action on. Since Persimmon was mentioned a number of times, it is important to touch on the obscene bonuses paid to its chief executives. Surely, such grandiose remuneration is unacceptable.

Other hon. Members talked about completion and adoption, promises that are made about facilities and the scary arguments that come later with developers about costs. It is common for problems to occur a couple of years after the purchase price is paid and people move in, and for the developer either to be nowhere to be found or to argue. That is simply not good enough.

We do not know what consumer protection measures will be proposed—as was highlighted, they have yet to be published—but they are unlikely directly to affect Scotland because of the devolved nature of housing. However, that does not mean they will have no effect, so I am keen to see what comes from them. For a number of years, homeowners have had issues with property factors. The UK Government recently consulted on the issue as part of its implementation of reforms to the leasehold system, which is very different.

The Scottish Government brought forward the Property Factors (Scotland) Act 2011, which means that since 2012, registration has been compulsory for property factors operating in Scotland and they have had to follow a code of conduct outlining minimum standards. There is also a new dispute resolution system. The homeowner housing panel, and now the housing and property chamber of the first-tier tribunal for Scotland, have allowed homeowners to challenge property factors in Scotland.

[Jim Fitzpatrick]

Property factors being property management agents in Scottish speak, yes?

[Drew Hendry]

I am grateful for that translation from the Scots.

A test case was brought by Mr Michael Marriott, a householder in Clackmannanshire, against Greenbelt Group in 2015. He took his case to the Lands Tribunal for Scotland and won, because it was found that the deeds were not compliant with the legislation. Perhaps that is a learning opportunity for the UK Government. Where there is a clear breach, homeowners can pursue a course to get factoring clauses taken out of their deeds altogether.

That has made a big difference, but it would be foolish to say it has cured all the problems. There is much more work to be done in Scotland, including on issues with shared factor arrangements on private housing estates. There is one such estate in Milton of Leys in my constituency. One of my constituents was advised that his factoring bill had risen from £100 in 2005-06 to £173 in 2017-18, with no explanation—it was just applied to the costs.