Question to the Department for Levelling Up, Housing & Communities:

To ask the Secretary of State for Housing, Communities and Local Government, what steps his Department is taking to (a) reform the leasehold sector and (b) support leaseholders presented with high bills for major works.

The Government is committed to promoting fairness and transparency for homeowners and ensuring that consumers are protected from abuse and poor service. The Government is taking forward a comprehensive programme of reform to end unfair practices in the leasehold market.

This includes making it easier for leaseholders to buy their freeholds, extend their leases or exercise their right to manage buildings. We will reform the process of enfranchisement valuation that leaseholders must follow to calculate the cost of extending their lease or buying their freehold. The Government will abolish marriage value, cap the treatment of ground rents at 0.1% of the freehold value, and prescribe rates for the calculations at market value. The Government will also introduce an online calculator, further simplifying the process for leaseholders and ensuring standardisation and fairness for all those looking to enfranchise. These changes to the enfranchisement valuation process will result in substantial savings for some leaseholders, particularly those with less than 80 years left on their lease. Our reforms to enfranchisement valuation also ensure that sufficient compensation is paid to landlords to reflect their legitimate property interests.

The measures will be translated into law as soon as possible, starting with the Leasehold Reform (Ground Rents) Bill, which was introduced into Parliament on 12 May. This Bill will make homeownership fairer and more transparent for thousands of future leaseholders, by legislating to prevent landlords under new residential long leases from requiring a leaseholder to pay a financial ground rent.  This will be the first part of major two-part legislation to implement leasehold and commonhold reforms in this Parliament.

The law is clear that service charges must be reasonable and, where costs relate to work or services, the work or services must be of a reasonable standard.

The ‘Section 20’ consultation process (of the Landlord and Tenant Act 1985) aims to ensure that leaseholders contributing towards the upkeep and maintenance of the building where they live have sufficient input into how their money is spent on major works.

Where the works relate to building safety, we have made direct funding of an unprecedented £5.1 billion available for cladding remediation on buildings of 18 metres and above, which will protect hundreds of thousands of leaseholders from the cost of remediating unsafe cladding on their homes.  We are also stepping in to provide a generous finance scheme for the removal and replace of unsafe cladding on medium rise buildings.