- July 2, 2018
- Posted by: Mick Antoniw AM
- Category: Featured, Latest News
As part of his ongoing campaign for the Welsh and UK Governments to lefgislate to protect leaseholders from exploitative contracts and to ban the development of new leasehold houses, Mick Antoniw AM brought a Members legislative proposal to the National Assembly for Wales on 27th June 2018. The proposal read:
To propose the National Assembly for Wales:
1. Notes a proposal for a Bill to:
a) abolish the building of leasehold residential houses in Wales; and
b) improve consumer awareness of the implications of leasehold tenure.
2. Notes that the purpose of the Bill would be to:
a) place a duty on local authorities in Wales to reject all planning applications for leasehold residential housing developments; and
b) place a duty on sales and management agents to provide potential purchasers of existing leasehold properties with information on the implications of leasehold contracts
Here is the extract of Mick’s opening and closing speeches. A full transcript of the debate can be found at: http://record.assembly.wales/Plenary/4995#A44466
Mick Antoniw AM: I’m grateful for the opportunity today to introduce this Member’s legislative proposal to abolish leasehold tenure for new residential houses. We have, of course, debated this issue on several occasions. On the last occasion, this Chamber held a very detailed, informed and passionate individual Members’ debate on the problems arising from the renewed growth of leasehold housing and the associated consequences for tenants of the leasehold agreements that they were subject to. The motion we debated attracted cross-party support, and it was clear from Members’ contributions that leasehold is a problem in every part of Wales. Since that debate, there has been a statement from the Minister. It does not rule out legislation, but focuses on voluntary agreement with a number of major developers not to build new leasehold housing.264
Now, I very much welcome that statement, but make the argument today that we should go further, and we should put the issue beyond any future doubt by introducing a short and a simple piece of legislation that would prohibit, by law, any new leasehold houses being built in Wales. So, in order to explain my reasoning, it would be helpful to remind Members of the background to this issue. There are an estimated 200,000 leasehold properties in Wales. Leasehold is a relic from the eleventh century, a time when land meant power—and unfortunately it still does. For today’s landowner, leasehold means maximising income and retaining control of the land they own, but for the leaseholder it means the exact opposite: uncontrollable costs and a lack of control over what they can do with the property that they own. So, when the Scottish Government legislated to abolish feudal tenure, they got the tone exactly right.265
Like many Members, I have received representations from constituents where the root cause is the inherent unfairness, the complexity and outdated nature of leasehold contracts, complaints about spiralling ground rents, people feeling trapped in their own home, and property values that plummet year on year as the remaining lease reduces—and those are commonplace. When leaseholders seek either to renew their lease or to buy the freehold of their home, they are held to ransom. Leaseholders are completely defenceless before the ground landlord. And because of the profitability of the leasehold system, finance corporations have brought out a great many landlords, and as result, a person’s home is no longer a rock on which their life is built, but a commodity to trade and speculate on. So, to me, it is totally sensible that the UK Government have committed to work with the Law Commission to support legal reform. The complexity of leasehold contracts, with elements of contract and property law intertwined, is such that it makes sense to await the Law Commission proposals, subsequent to the introduction of UK-wide legislation, to deal with all the retrospective consequences, which we do not, in any event, have the constitutional competence to deal with at the present time.266
So, today’s debate is about two things. Primarily, it is a proposal for the introduction of a simple piece of Welsh legislation to prohibit any future building of leasehold houses. It does not relate to apartments or shared buildings; solely to new residential houses. Secondly, this proposal requires developers and selling agents to provide potential buyers of existing leasehold properties with relevant facts about leasehold tenure. [Interruption.] Yes, I will.
We all know that buying a property is the most significant financial decision most people will make, so it is vital that prospective purchasers understand the full implications and consequences of buying a leasehold property. So, in April last year, the all-party parliamentary group on leasehold reform called for leasehold houses to be banned, and for an end to onerous ground rents. And then, in a written statement in December 2017, the Secretary of State, Sajid Javid, announced a package of measures to crack down on unfair leasehold practices in England, including legislation banning new leaseholds. He said that272
‘It’s clear that far too many new houses are being built and sold as leaseholds, exploiting homebuyers with unfair agreements and spiralling ground rents. Enough is enough. These practices are unjust, unnecessary and need to stop.’273
So, those are encouraging words. In Welsh Labour’s 2017 manifesto, we also made our position clear that we will back those who own their homes, including leaseholders who are currently unprotected from rises in ground rents:274
‘A Labour Government will give leaseholders security from rip-off ground rents and end the routine use of leasehold houses in new developments.’275
In 2016, leasehold transactions accounted for 22 per cent of transactions of new-build properties. Responding again in a Westminster debate, the Minister for housing then noted that276
‘whether Wales abolishes leasehold is a devolved matter.’277
So, the power is in our hands. We have a Labour manifesto commitment to legislate, we have a Welsh Labour Government, we have general cross-party support for abolition, and whilst we cannot prevent every leasehold horror story that our constituents have to endure, we do have the competence to at least stop the problem going any larger. We have the ability to bring an end once and for all to any future uncertainty regarding leasehold houses. We can send a clear message to all developers and landowners, present and future, that leasehold tenure is no longer an acceptable housing option in Wales. We can lead the way on this issue, and also send a message to the rest of the UK—to property developers, to landowners, to all those foreign-owned companies who are considering investing in property in Wales and the UK—that leasehold for housing is a relic of the past, and by passing a simple piece of legislation, we can confine it to the dustbins of history.
Mick Antoniw AM: Can I firstly thank all those who spoke in the debate and the inevitable list that we all have of horror stories of the existing system? Can I also very much thank the Cabinet Secretary for the commitment he’s made, which I think has moved further on to at least beginning to look at the reality of a possible piece of legislation? Much of what the Cabinet Secretary said I very much agree with, but it is dealing with the issue of the Law Commission and all the retrospective issues. The point about this particular recommendation in respect of legislation is that it is saying that we can actually send not only a clear principled message out, we can clear the decks, we can use the powers that we have for a very simple piece of legislation, which is very focused, that basically says, ‘Enough is enough—there will be no more leasehold in respect of new-house ownership.’ 299
The reason why we should use that power is because—I’ll be blunt about it—the commitments we have from the house building organisations are, to be honest, not really worth the paper they’re written on. In four or five years’ time, if the needs of the profitability of those companies can be increased by having leasehold tenure, then that’s what will happen. These are companies. We live in a capitalist society, unfortunately. We live in a capitalist society and the purpose of these companies is to maximise profits. So, we need to ensure that these issues—whether they be land backing, accumulation of land, advanced planning, which these companies do, over 10, 20, 30 years ahead—we are expunging, we are removing the possibility of further leaseholds coming back to haunt us in the future. It gives us complete principled clarity and it is an example of where we can use our powers for the benefit of our people for future generations. Isn’t that what the future generations Act was about? It’s about taking action, it’s about doing things that actually protect future generations. And a simple, short piece of legislation like this would make a significant contribution to establishing that principle and that clarity and would show that this Assembly has powers and uses its powers for the benefit of the people of Wales.