Commonhold and Leasehold Reform: Managing Agents

Before we come to the debate on commonhold and leasehold reform, I inform that House that permission to appeal has been granted following the judgment on the judicial review brought forward by ARC Time Freehold Income Authorised Fund and others over the Leasehold and Freehold Reform Act 2024. The case is therefore sub judice. Mr Speaker has granted a waiver to allow Members to discuss fully the Housing, Communities and Local Government Committee report on the implications of the Government’s draft Commonhold and Leasehold Reform Bill. I call Florence Eshalomi, who will speak for up to 15 minutes.

I beg to move, That this House welcomes the Housing, Communities and Local Government Committee’s First Report of Session 2026-27, Pre legislative scrutiny of the draft Commonhold and Leasehold Reform Bill (HC40); notes the Government’s commitments to cap ground rents and to bring forward legislation in this Session to support the uptake of commonhold in place of leasehold; further notes the concerning practices of some property managing agents who fail to act in the best interests of homeowners; and calls on the Government to accept the Committee’s recommendation to legislate to create a body with enforcement powers to regulate property managing agents.

I am grateful to the Backbench Business Committee for granting time for this important and timely debate, which gives the House the chance to consider our Committee’s report on the draft Commonhold and Leasehold Reform Bill. I thank my fellow Committee members for their collaboration and cross party work on the report, the excellent Committee staff for their help in preparing the report and the Committee’s two specialist advisers, Professor Nick Hopkins and Wendy Wilson, for their assistance throughout our inquiry.

Today’s motion invites the House to call on the Government to use the final Bill to legislate for the regulation of managing agents. Colleagues from across the House will be all too familiar from their inboxes with the “wild west” of managing agents, but first I would like to begin by discussing some of our findings on the draft Bill more generally.

For many of the 5 million leaseholders across England and Wales, these reforms have been a long time coming. After a decade of campaigning across party lines, we now have an opportunity to finally tackle the fundamental injustices of the leasehold system, once and for all. Leasehold reform has long commanded cross party support. Ten years ago, the campaign in Parliament was championed by the former Member for Worthing West, Sir Peter Bottomley. His work chairing the all party parliamentary group on leasehold and commonhold reform amplified leaseholders’ voices across Westminster. I thank the current chair, my hon. Friend the Member for Ellesmere Port and Bromborough (Justin Madders), for his tireless cross party campaigning. It is in that cross party spirit that my right hon. Friend the Member for Ashton under Lyne (Angela Rayner) and Lord Gove generously gave evidence alongside each other in the opening session of our inquiry. The two former Housing Secretaries were united in their view that this draft Bill is welcome, and that the Government must go further and faster to deliver for leaseholders.

The draft Bill is technical and long—it runs to 164 clauses and 13 schedules—but if we take a step back, the problem that it seeks to address is about control. Control is supposed to be one of the main advantages for people of buying their own home.

For many leaseholders, a flat is their first foot on the housing ladder. They may have been drawn in by the banners on new build developments advertising the Government’s Help to Buy scheme. Many leaseholders were told that that was the affordable route to buying, via shared ownership. They expected control and a feeling of security, knowing that they could make the changes that they wanted in their own home and have control over the running costs, and would not be threatened with eviction by a landlord.

The benefits of home ownership simply do not apply to leaseholders. They are homeowners, yet they are tenants. Far from home ownership and the dream that they were sold, many of them are stuck in a living nightmare. In the words of one leaseholder, who shared their story with our inquiry: “I thought I’d bought a flat, then discovered leasehold is a financial trap. I have no control over my finances, my relationships, where I live, or where I work”.

We all agree that this is an injustice that needs to be addressed. This afternoon’s debate is an opportunity for Members to reflect on the draft Bill and what additional measures might need to be included in the final version to ensure that we get these reforms right.

Perhaps the most headline grabbing measure in the draft Bill is that it will cap existing ground rents at £250 a year. We must be absolutely clear across this House and in the other place that ground rent is money for nothing. An investigation by the Competition and Markets Authority found “no persuasive evidence” that leaseholders “receive anything in return” for ground rent. Many leaseholders have ground rents that double every 10 years or increase with the retail prices index.

I thank my hon. Friend, the Chair of the Housing, Communities and Local Government Committee, for recognising the work done not only by me, but by Peter Bottomley and Jim Fitzpatrick on the APPG. I was struck by a comment in the Committee’s report about the argument put forward by some freeholders that ground rents are used to cover service charges and that people will be put in danger if they are lost. The Committee used the word “shameful” for that argument. Does that not show that this system is a money making racket? People are using any excuse to carry on that income stream.

I refer my hon. Friend to the evidence session at which we had representatives of freeholders—one of the most enlightening sessions for my Committee and my colleagues. We probed and pushed and tried to seek justification for ground rents, but none was forthcoming. That shows that they are a money making scheme.

We must be absolutely clear, as the Competition and Markets Authority has said, that there is no place for ground rents. Last month, there were media reports that the Government are preparing to accept our Committee’s recommendation to bring the £250 ground rent cap into force in late 2027—one year earlier than previously planned. If those reports are correct, that will be welcome news for many leaseholders, who are calling on us to act with greater urgency.

However, even before the final Bill has been introduced, we hear threats of judicial review from a small number of organisations with very deep pockets. Rather than engaging with the process here in Parliament, they are preparing to challenge the democratic mandate of successive Governments, and the will of this House, to make these changes. Shame on them. They know that they have lost the political debate.

The Government should be emboldened by the fact that they have successfully defended judicial reviews in the past. We think they should push ahead with these reforms, but there is a real risk that these measures could be delayed if freeholders do launch such a challenge. The Committee has called on the Government to include a clause for the ground rent cap in the final Bill to ensure that it comes into force two months after the legislation receives Royal Assent.

We support the Government’s intention to change to peppercorn ground rent over time. We understand that that will need a transition period, as Ministers must be confident that they are striking a fair balance between the interests of competing parties, but it is not clear to us how the Government decided on their policy of a 40-year transition. Based on the evidence to our Committee so far, we think a shorter transition period may be justified and fair. That is why our report calls on the Government to publish more data in the coming months so we can be confident that we are getting the transition period right.

Another key focus of the draft Bill is the measure to replace leasehold with a new commonhold tenure. Commonhold will allow all homeowners to have a vote in how their block is run. Homeowners are not required to participate in commonhold if they do not want to, and many blocks will vote to appoint their chosen managing agent, but this modern tenure will offer homeowners the control that they do not have under the current leasehold system.

I thank my hon. Friend and her Committee for the excellent work that they have done in preparation for this Bill. Pensioners who bought retirement flats in Aire Valley Court and Sutton Court in my constituency were hoping for peace of mind; instead, they have had rocketing service charges, poor maintenance and a lack of communication and transparency from FirstPort, the property managing agent. Does my hon. Friend agree that while commonhold is a fantastic opportunity for leaseholders to take charge, we need further independent regulation of property agents to ensure that they provide a good service to leaseholders and commonholders in the future?

I thank my hon. Friend for that intervention, and I thank many other Members, including my hon. Friend the Member for Uxbridge and South Ruislip (Danny Beales). I will come on to the very important area of managing agents and a firm that is notorious with many of us in this Chamber—FirstPort.

My hon. Friend is about to come on to property managing agents. May I add to the experiences heard by her Committee the experiences of constituents in my communities? Probably one third of the casework that I deal with relates to the poor performance of property managing agents. Does she agree that many leaseholders face real difficulty in getting proper recourse? A much tougher regime than the one currently in place, involving the property ombudsman and the property redress scheme, is urgently needed if leaseholders are to have genuine hope that their concerns about managing agents will be taken seriously.

I thank my hon. Friend, a fellow London MP, for that intervention. This issue is not just isolated to London; it happens in many areas right across the country, and it was raised continuously throughout our inquiry. As I mentioned, I will come on to the issue of managing agents more broadly.

Our Committee is broadly supportive of the move to commonhold. That said, we have two key questions about its implementation. First, the Government must clarify what voting rights shared owners will have in commonholds. The Government have indicated that housing associations may have control over the votes of shared owners during the 10-year initial repair period of their properties. That could leave shared owners without any say in decisions that directly affect their homes. We call on the Government to clarify the position on this matter. We must ensure that the vote can be split between shared owners and their housing providers if necessary, so that shared ownership leaseholders get a meaningful say.

Secondly, we need to ensure that as many existing leaseholders as possible are able to convert to commonhold. The Government want all new build homes to be commonhold and to support existing leaseholders to convert. However, the draft Bill does not enact important recommendations from the Law Commission that would make it easier for leaseholders to buy out their freeholder and make the important switch. Our report includes proposals on how some of those recommendations could be included. If it is not possible to include them in this Bill, the Government must bring forward further legislation later in this Parliament. We do not want to run the risk of leaving some leaseholders behind.

The biggest issue and source of frustration for so many homeowners and leaseholders in the leasehold system is the quality—or lack of it—and service provided by their managing agents. Many colleagues from across the House will share cases involving their constituents in this afternoon’s debate, but it will come as no surprise to anyone that one company came up time and again in the stories we heard from leaseholders. That company was FirstPort, the largest independent managing agent in England. Last year, the Minister said he had “significant concerns” about FirstPort’s unreasonable service charges, its slow response to complaints and its approach to debt collection.

Ultimately, the problem with many of these managing agents is that they are taking advantage of a captive market. They effectively have a monopoly on individual estates, meaning that they are able to treat homeowners with sheer contempt. In the words of one leaseholder we heard from, homeowners are left feeling “like cash cows”.

My hon. Friend talks about leaseholders being treated with contempt. I have an estate in my constituency, Bishops Gate, where it took three years for FirstPort to respond to residents’ requests, and even when the council got involved, FirstPort refused its request. Given all the service charges they had paid in, the homeowners believed that there would be £230,000 in the account; in fact, there is zero, and they are told that there is £60,000 of debt. That is the sort of scam that is going on.

I thank my hon. Friend for sharing that example; colleagues across the Chamber will probably cite similar, if not worse, ones. That is a shocking indictment of the company we are discussing. The law already requires service charge increases to be “reasonable”, but when charges are skyrocketing for basic maintenance services such as cutting grass, many residents do not feel that they are being treated reasonably.

Residents in Stratford and Bow tell me that some of their monthly service charges have now reached almost £600. It is driving them to the financial brink, and many of their neighbours are now facing legal threats for falling behind. I have had to intervene on several occasions, calling public meetings with management agents that are behaving terribly and treating residents as cash cows. Does my hon. Friend agree that it is an absolute disgrace that leaseholders continue to be pushed about by unregulated property management agents who are profiteering from our constituents, and that the Government must bring forward robust measures to protect leaseholders as quickly as possible?

I thank my hon. Friend for raising that point—as I mentioned, many colleagues will have dealt with similar cases. This is an issue that we want the Government to look seriously at, and one that has frequently been brought up in the Chamber. It is right that Members are advocating for their constituents, but local MPs or Housing Ministers should not have to name and shame these companies; we are talking about some of the largest managing agents in England. We are seeing patterns, with the same companies coming up time and again across the country. As MPs, our support for individual blocks and housing estates might result in small wins locally, but it is not addressing the root cause of the problem.

Our Committee surveyed over 7,000 homeowners, and found that the regulation of managing agents was the No. 1 action that homeowners wanted the Government to prioritise as part of their leasehold and commonhold agenda. In 2018, the Lord Best report proposed a new regulator to cover letting and managing agents, with a mandatory and enforceable code of practice. Lord Best recommended that this new body should be established as a statutory regulator for property agents, as there was no existing body that could take on that role. Even the managing agents themselves have told us that they would welcome Lord Best’s proposals for regulation and the professionalisation this would bring to the sector. We already have industry funded professional bodies with their own codes, but self regulation does not work.

I am dealing with huge numbers of groups of leaseholders, and one of the things we have discovered—with the managing agent very much as my hon. Friend is describing —is this habit of subcontracting, only for the leaseholders to find that the subcontractors are owned by the same company; the name has just been changed. When we raised this point, the answer we got from FirstPort last week was, “We can do what we want.” Does that not reinforce my hon. Friend’s argument about regulation?

Before the hon. Lady rises, I remind Members that this is a very oversubscribed debate, and I am sure that many people want to speak.

I thank my hon. Friend for that intervention, and wish him a happy birthday—I am sure a good birthday present for him would be the regulation of managing agents for the sake of his constituents. Self regulation does not work when there is no real enforcement, and leaseholders were clear with us that they do not just want mandatory qualifications. As Lord Best put it in his evidence to the Committee, “being qualified doesn’t necessarily make people behave properly; you still need a code of practice and enforcement”.

What we need is a regulator with teeth—one that will issue meaningful sanctions against agents that treat homeowners like a revenue stream. For the worst offenders, that should include the removal of their licence to operate.

I should acknowledge that our inquiry heard from some campaigners who were concerned that regulation could add to the costs passed on to leaseholders via service charges. On balance, though, we think that regulation is now necessary to protect all leaseholders from rogue managing agents. The reality is that some leaseholders will not be able to convert to commonhold—some blocks will not be able to meet the 50% threshold to convert, and some blocks will have special features that mean they are not eligible. We cannot leave those homeowners behind.

Ultimately, commonhold is a vast improvement, but it will not always be as simple as hiring and firing agents. Commonholds are likely to appoint managing agents on contracts that last for several years, and they need to have confidence that they are appointing high quality service providers. An independent code of practice would provide that assurance, so overall we think it would be a valuable addition to the final Bill—one that would benefit homeowners. Homeowners want a crackdown on poorly performing agents like FirstPort, with a regulator that has teeth and can deliver.

Will my hon. Friend give way?

Very quickly.

My hon. Friend has mentioned a number of times that nobody should be left behind by this legislation. My constituents suffer from the actions of the St Mary Magdalene and Holy Jesus Trust, a supposed charity that refuses to allow them to extend their leases and is using a loophole in the current legislation, leaving them—as one constituent put it—as prisoners in their current homes. Does my hon. Friend agree that the legislation should address those concerns and liberate my constituents?

I thank my hon. Friend for raising the important issue of marriage value and the extension of leases, with many people having to take out additional loans just to remortgage and extend their lease. All these areas are covered in the draft Bill, and I know the Minister is keen to address them.

The Bill will be an opportunity to impact the lives of millions of constituents across England and Wales who bought their homes in good faith. We must all take responsibility for keeping this topic on the agenda and ensuring that the final Bill comes back to this Chamber in the autumn to make progress through Parliament—we cannot allow this issue to be swept away by events that are happening outside this place or that are beyond our control.

Our Committee’s report sets out the blueprint for the changes needed to make the Bill a bolder, more ambitious piece of legislation. With an independent regulator, we can ensure that all homeowners see a real change in the short term. I therefore urge Members across the House to support today’s motion; leaseholders’ expectations have been set very high, so it is vital that we get the reforms right. If we do so, this will be the Parliament that finally allows leaseholders to realise their dream of home ownership, making them true homeowners with the control they have been promised.

We will start with an immediate four minute time limit.

I congratulate the hon. Member for Vauxhall and Camberwell Green (Florence Eshalomi) on her opening remarks, and on the work her Committee has done to produce its report. It was an exceptional read—I thank her and her Committee.

I am seeing increasing numbers of cases where leaseholders experience a range of problems, including high service and administration charges, a lack of transparency, overcharging, disproportionate costs to extend leases or buy freeholds, poor actions by managing agents, a slow and costly sales process, and imbalanced dispute mechanisms with leaseholders potentially liable for the freeholder’s legal costs. Nowhere is that more apparent than in the retirement village up in Ben Rhydding in my constituency.

For the past year, I have been working with the Clevedon owners group, who have experienced real life examples of how the current leasehold framework governing the integrated retirement sector falls well short of the standard that should be expected. The Clevedon owners group is made up of a group of leaseholders at the Audley Clevedon retirement village in Ben Rhydding. They have experienced repeated failures by their landlord to fulfil some of the most fundamental obligations contained within their leases, while the landlord continues to collect substantial service charges. The owners group estimates that the Audley Group collects approximately £30 million of annual service charges a year across its whole estate, with £3.5 million of deferred service charges, yet its residences are falling into disrepair and the freeholder is not updating its commitments or undertaking its responsibilities.

The owners group has highlighted to me that its biggest concern is around the legal definition of the service charge and, crucially, whether certain mandatory payments in retirement leases fall within the statutory definition of a service charge under the Landlord and Tenant Act 1985. The experiences of those residents in the Audley retirement village demonstrate exactly why this seemingly technical issue has profound and real consequences. Leaseholders have paid substantial monthly management charges and deferred management charges on the understanding that the funds would maintain their homes, safeguard communal facilities and ensure the long term sustainability of their residential community. It is clear from the meetings that I have had with my constituents that that simply is not the case. Instead, their properties have gone unserviced, which presents serious questions about how the annual service charge and those funds are being used. Following years of expansion, heavy borrowing and financial difficulties, maintenance across the Audley Clevedon retirement village has reportedly declined significantly, despite leaseholders continuing to pay increased service charges. That needs to change, and I respect some of the recommendations in the report on that point.

Does the Minister have any intention of commissioning an independent forensic audit of major retirement community operators to examine corporate governance, financial arrangements, service charge accounting, deferred management charges and compliance with lease obligations? Can he confirm that leaseholders in retirement housing, including integrated retirement communities, will not be excluded from the protections of the Leasehold and Freehold Reform Act 2024? The current legal framework has failed to keep pace with increasingly complex corporate structures. If confidence in retirement housing is to be restored, residents must be given the protection, transparency and accountability that they rightly expect.

Trust in politics is at an all time low, and part of the reason is that our society is littered with examples of structural unfairness, injustice, and ordinary people being ever so slightly fleeced. The housing market of recent years is a strong case in point, with multiplying ground rents, abuse of the forfeiture system, opaque service charges, management companies that cannot be changed, overpriced maintenance performed by firms connected to the management company, no adoption of common assets, short leases and exorbitant lease extension fees—the list goes on.

It has been a privilege to have played my part in scrutinising the draft Bill, because it represents an opportunity to put a significant dent in some of these practices, and to demonstrate that politics and politicians can deliver for people and change lives for the better. As my hon. Friend the Member for Vauxhall and Camberwell Green (Florence Eshalomi) has set out, the Committee took evidence from an extensive array of witnesses on the measures in the Bill, and I thank them for their contributions.

I will draw out a few specific points from our report. First, the reinvigoration of commonhold that this Bill will deliver has rightly been described not just as an alternative to leasehold, but as a radical improvement on it. For it to be implemented successfully, considerable work needs to be undertaken at the Land Registry to make sure that it is ready to respond, not just to the registration of new commonhold, but to the conversion of existing leases. Our Committee found that a failure to modernise the Land Registry’s legacy systems would pose a significant risk to commonhold working. Good quality public access systems will be crucial.

My second point is on the ground rent cap. It is fair to say that the Committee spent a lot of our time attempting to get to the bottom of the Government’s rationale for their proposals. I support the proposal to adopt a flat cap of £250, rather than the cap being a percentage of property value. However, I have struggled to understand the rationale behind waiting 40 years before converting to peppercorn rent. I can understand the desire to give certainty and predictability to investors, and I can understand an argument that investors need time to adapt to such changes, but the last three successive Governments were elected on a mandate to address onerous ground rents. The ground rent system, as my hon. Friend said, was condemned by the Competition and Markets Authority, which said that it could find “no persuasive evidence that ground rent was either legally or commercially necessary, or that consumers received anything in return”.

It should not be a surprise to anyone to hear that the days of ground rent are numbered. I cannot think of a single other example of a Government being so generous as to provide 40 years’ notice of a change to terms of business. Governments have not done that for students on plan 2 loans, for example, or for those affected by the rising pension age. The previous Government thought 20 years’ notice was sufficient, and I am minded to agree with them, unless the Department can bring forward more evidence on its rationale.

My final point is on the absence from the Bill of measures to regulate property management agents. Everyone in the House knows that that change is long overdue. We have Lord Best in the Gallery today. His excellent 2019 report set out the case for regulation clearly, as did my hon. Friend the Member for Uxbridge and South Ruislip (Danny Beales), following his work on his private Member’s Bill. I understand the concern about the size of the Commonhold and Leasehold Reform Bill as it stands, and that adding these measures would create further delay. All I say in response is that we have the opportunity and the responsibility to act. No time has been set aside in the King’s Speech for a separate regulation of property agents Bill, so I hope that the Minister will seize the opportunity in front of him, and chip away at another practice that blights the lives of our constituents and undermines trust in institutions’ ability to deliver for them.

Leasehold is a con. We are one of the few countries that still has residential leasehold, and because of that, people are being sold a lie on home ownership. As Woking’s MP, I hear countless stories about it, and I will not use my time going through every single one, but I impress this point on the Government: we need to regulate these bureaucratic con artists. People have been scammed out of home ownership in place of leasehold. It is fleecehold. Dreams of home ownership have stayed dreams—far out of reach, and fast becoming nightmares. We hear far too often of leaseholders who have been distressed by poor service. These bad actors hide behind paperwork and avoid responsibility. Major firms such as FirstPort have, for far too long, been allowed to deliver an appalling service without consequences.

The new leasehold reform Bill must put in place a regulator with the teeth to sanction these rogue agents with meaningful penalties. When that happens, MPs can end the wild west of property management agents. To see why leasehold reform is so urgent, we need only look at how managing agents such as FirstPort treat leaseholders. I had a situation involving a retirement development in Woking. It should be a lovely place to live that gives peace of mind to vulnerable, elderly residents, but when people fell over, the safety systems that FirstPort put in place did not work. Elderly residents were left lying on the floor, having called for help. FirstPort should have fixed that, and it did not. People were left in those distressing situations, but because of the lack of regulation, we cannot hold those responsible accountable.

FirstPort also managed the Clock Tower building in Maybury. It has spent years causing misery to leaseholders, because of the failure to deliver minimum levels of service, and people are trapped. I have written to the Minister on numerous occasions about that case. Leaseholders have few rights, and cannot sell their homes or control who manages the development. The leaseholders of Bramwell Place, another development in Woking, know those problems all too well. They are trapped in their homes, due to frequent stalling and lack of communication. The developer completed the necessary fire safety investigation a year ago, but refused to release critical reports, burying them in an internal review. Lenders have denied the people in those homes mortgages, buyers are walking away, and innocent residents are left struggling.

I am on the Housing, Communities and Local Government Committee, and I have been proud to work on its report that pushes the Government to go further, faster. I thank the hon. Member for Vauxhall and Camberwell Green (Florence Eshalomi) for her leadership, and our Committee Clerks for their excellent support. I hope the Government listen to our cross party calls today. We recommended significant changes to the commonhold and leasehold reform Bill. The Bill is a step in the right direction, but does not deliver what we want. It is mind boggling that the Bill does not deliver on the promises in the Labour manifesto. We recommended that the Bill deliver an independent regulator to end the wild west of property management agents. If we do that, FirstPort and others will not get away with the appalling treatment that my constituents and others face.

It is heartbreaking that so many people in Woking and across the country have worked hard to get on the property ladder, but have seen their home ownership dream turn into a nightmare. Successive Governments have failed to tackle ground rents and leasehold reform. We want to put homeowners in control of the management of their buildings. I urge the Minister to implement the Select Committee report in full. Let us leave a lasting legacy on leasehold reform.

I want to get on record what has happened in my constituency, because I said to my constituents that I would. With the expansion of Heathrow airport, land prices have gone up. Manufacturers have moved to cheaper areas, often with grants, and in the former manufacturing areas, a large number of flats have been built. I would normally welcome that, but the prices of those flats are prohibitive for local people. However, a large number of young people—bless them—have done everything they can to raise the £300,000 or £350,000 needed to buy one of those small flats. They have new homes, and we have welcomed them into the community, but we are now getting a flood of constituents coming to see us because the increase in service charges has pushed them over the edge.

In response to surveys, young people have explained in heartfelt terms, “We’ve not had a family because we can’t afford a family.” Some of them have tried to sell on, but some got a grant to buy their flat and have to pay it back, so they are caught in a Catch-22 situation. They say to me, “Here are the service charges, and this is what we get.” The service is absolutely appalling. We have had numerous examples of that. I understand the call for regulation and a regulator, and I agree with them, but the best form of regulation is to give ownership to the people living in the properties. My simple message to the Government is: please deliver the Law Commission’s remaining recommendations on enfranchising people to manage.

Another issue that has come up time and again is developmental value. This is an issue on which my hon. Friend the Member for Brent West (Barry Gardiner) has been campaigning since the early 2000s. It is ludicrous that people have to pay up front for a development that might never happen, and that might be costed by the freeholder. That prevents people from buying or selling on. The Law Commission has made a key recommendation on this point, and I urge the Government to act on it.

My hon. Friend the Member for Vauxhall and Camberwell Green (Florence Eshalomi) mentioned that the threshold for participation in a move to commonhold is set at 50%. In other areas, that does not apply; for example, the threshold for tenant management organisations is 20%. We are now removing such onerous criteria from employment rights legislation, because they prevent participation. In areas like mine, a lot of properties are owned by overseas landlords, and it is very difficult to get them to participate in any way. The request is that we move the threshold to 35%; that is reasonable and manageable.

I agree with my hon. Friend the Member for Mid Cheshire (Andrew Cooper) that 40 years is too long to wait before changing the situation regarding ground rent. We will have the WASPI women banging on our door soon, won’t we? I know of no other issue on which there has been a 40-year notification period. The recommendation is to get it down to 20 years. I would get rid of ground rent now, because I think it is wealth extraction in return for no service whatsoever.

Finally, I turn to the Government’s proposals for ensuring that lease extensions and freehold acquisitions are cheaper overall. Ultimately, they will benefit a large number of our constituents, but they need to be implemented as rapidly as possible, which is why I welcome the Bill. I hope that the new regime allows us to get this legislation through as fast as possible.

I thank the Chair of the Housing, Communities and Local Government Committee, the hon. Member for Vauxhall and Camberwell Green (Florence Eshalomi), for securing today’s important debate. I want to use the brief time I have to share two examples from my constituency of systemic mismanagement of managed property.

The first example that I will cite is a FirstPort managed property—we have heard that name mentioned already—called Bentley Court in Camberley’s town centre. On 19 March, the building’s only lift broke down. For most of us, that would be a frustration, but for the retirement community who live in that building, it has been life changing. These are older people, often with significant mobility issues. That lift is not just a convenience; it is their access point to and from their property. It is their independence. Residents tell me that they have not been able to go shopping and have missed hospital appointments. Some cannot take out their rubbish, and others have become trapped in their home for days at a time.

That brings me to the case of Audrey West, one of my constituents. She lived at Bentley Court for more than 26 years. She suffered from heart failure, chronic obstructive pulmonary disease and chronic bronchitis, and had serious mobility problems. She became a prisoner in her own home when that lift broke down, and her health and wellbeing deteriorated. When she attempted to tackle the stairs, the physical exertion caused enormous strain on her body, leaving her breathless and exhausted. That was only compounded by the recent heatwave. In order to secure her safety, her family concluded that the only thing they could do was remove her from her home of 26 years. On 28 June, just days after leaving her home, Audrey’s family contacted FirstPort again, copying in my office, to inform the company and me that Audrey had died. I am not here to claim that a broken lift directly caused Audrey’s death, but I am willing to say this: no vulnerable resident should ever be left feeling abandoned and trapped in their home. The lift remains unrepaired and unrepairable, with no end to the situation in sight.

My second example is Mytchett Heath, a not for profit retirement community managed by Cognatum Estates. MPs from across the House have constituents who are affected. Again, older residents are feeling completely ignored, and now maligned, by the company that should be looking after them—residents who have invested their life savings in a home, but who have no voice when it comes to how their property is managed. Last month, I met a group of Cognatum residents here in Parliament. One described Cognatum as “the worst commercial organisation I have dealt with in a long professional career”, and nobody in the room looked surprised at that.

Residents described soaring service charges, complaints that went nowhere, a regulator—the Association of Retirement Housing Managers—that they do not believe is independent, and a tribunal process that is so expensive. Lease terms can allow the managing company to recover legal costs from residents, who simply give up trying to engage with the process. Residents spoke about residents’ forums disappearing, and about having to renegotiate electricity contracts on behalf of the management company, because it was incapable of doing so itself. The most extraordinary thing that we heard was that Cognatum has refused to allow defibrillators in a retirement community, because it is fearful that members of the public might seek to access those defibrillators from outside the estate.

I will conclude in just a few seconds, if you will allow me that, Madam Deputy Speaker. I ask the Minister—

Order. There is a very strict time limit.

I thank my hon. Friend the Member for Vauxhall and Camberwell Green (Florence Eshalomi) for securing this debate, and for all the work that she has done on this issue. I see that Lord Best is in the Gallery; he, among many others, has been campaigning on these issues for years.

I rise to draw attention to the experiences of some leaseholders in my constituency. I have previously spoken at length in the Chamber about unadopted estates. I am not going to dwell on that subject today, because it is not discussed in the Housing, Communities and Local Government Committee’s report, but I want to draw it to the Minister’s attention, as it is a major issue in my constituency.

To turn to the specific problems we have, the draft legislation, as it stands, is fantastic. The proposal to cap ground rents will be absolutely life changing for people in my constituency who have contacted me and talked about how ground rents are going up to double what they were and about the difficulties they are consistently having with the fact that there appears to be no real ability to hold a managing agent to account.

The specifics I want to talk about are from a case I have been working on with the homeowners—well, the leaseholders—for some time, in which FirstPort, yet again, is the managing agent. Having finally managed to dislodge FirstPort as the managing agent, the residents have been told by the new managing agent that of the £40,000 reserve they believed was available to them, there is none—nothing. FirstPort has not explained where that money has gone or what it has been spent on, and this has been the outstanding position for well over six months. A sum of £40,000 is a lot of money to just vanish, and we would think that an organisation would be able to point to what it had been spent on pretty readily, if it was keeping accounts in any normal fashion. That is one of a succession of difficulties that these leaseholders have had with FirstPort, and this has been going on for years and years.

I understand that the Government have concerns that the draft legislation is already exceptionally long, and as a lawyer, I have a huge amount of sympathy for that, but I completely agree with my hon. Friend the Member for Vauxhall and Camberwell Green and the members of her Select Committee that we must do something, in line with Lord Best’s previous recommendations, about the regulation of managing agents. We have been talking about this topic in this House for as long as I have been an MP, and clearly significantly longer than that. If these organisations were capable of self regulation and if educating people who worked in them was sufficient to solve this problem, it would have been solved a long time ago. No one wants regulation for the sake of it, but the only way there will be accountability for vast amounts of individuals’ money that appears to simply vanish into the ether is if we put regulation in place. I thank the Minister.

I commend the hon. Member for Vauxhall and Camberwell Green (Florence Eshalomi) for securing this important debate, and for her continued strong and effective leadership of the Housing, Communities and Local Government Committee.

I have spoken several times in this House about the problems with the current leasehold and property management system, more recently from the Opposition Front Bench. Like so many of my constituents and people across the country, I am a leaseholder and I know at first hand the horrific situation they face. However, in today’s debate I would like to focus on property management companies, which are bringing misery to the lives of both leaseholders and those living on freehold estates in so called fleecehold properties.

Apart from the law as it currently stands, it is the poor performance and, quite frankly, the total incompetence of companies such as the Residential Management Group and FirstPort that are at the root of so many of the issues facing leaseholders across the country. Since my election, I have not come across one property management company that residents are happy with. Whether it is High Leigh in Hoddesdon, Academia Avenue, Robinia Road and Watery Lane in Turnford, Aldermere Avenue and Magnolia Way in Flamstead End, or Eleanor House in Waltham Cross, it is hard to think of one part of Broxbourne that is not affected.

The Minister, with whom I get on well, has promised to strengthen the regulation of managing agents, but how much longer will my constituents have to wait? His Department has already held a consultation on measures to help leaseholders challenge unfair fees and charges, and introduce qualifications for managing agents. In fact, the consultation opened nearly one year ago and closed in September 2025, and the Government are still analysing the feedback. That is what the people out there get fed up with. The Leasehold and Freehold Act 2024 is on the statute book and the present Government clearly want stronger regulation of managing agents, as that is what they have told this House, so why the delay? We need to get this sorted.

I welcome the fact that the Government have brought forward a Commonhold and Leasehold Reform Bill and allowed my Committee to scrutinise it in its draft form. That is a positive sign that the Government want to get the right legislation in place for our constituents, but I feel they should commit to giving more powers to the Department, so that Ministers can hold managing agents to account, specifically with enforcement powers. Managing agents that break the rules should be fined, and ultimately stripped of their licence to operate. This means that management companies would have to start to care about the interests of the residents they are supposed to look out for.

In my constituency of Broxbourne, we have had to put up with poor service charges and increasing bills for years. Residents have nowhere to turn when something goes wrong. They feel that managing agents have all the power. I know the Minister wants to change that, and I hope he will reflect carefully on what has been said across the House. I urge the Government to get a move on, and solve this issue for millions of people across the United Kingdom.

I thank my hon. Friend the Member for Vauxhall and Camberwell Green (Florence Eshalomi) and the members of her Committee for their excellent pre legislative scrutiny work, which we have heard about today.

Since becoming an MP, one of the most common issues I hear from my constituents is the poor quality of service provided by managing agents to local leaseholders. When the boilers broke at Walsham Court and Hinds Court last November, residents tried to contact Anthem, but to no avail, and they were left without water for four weeks. Middlesex House residents were left without water for days, without extra support and supplies, until my office intervened. At Armstrong House, FirstPort has let the quality of communal areas deteriorate to a shockingly poor extent. I could go on for hours, but I have only three minutes to go. As Members have said, there are countless examples of service failure from managing agents.

I welcome the Minister’s actions to date, and the proposals in the draft Bill to cap exploitative ground rents, which will save thousands of pounds over the lifetime of leases, pushing for service charge reform and transparency, and pushing for commonhold as the default form of tenure. These are long overdue changes. However, having seen these cases at first hand, I know that more is needed. My ten minute rule Bill in the last Session proposed the establishment of an independent regulator of managing agents, modelled on the excellent recommendations of Lord Best’s 2019 report. I understand that the Government are willing to move on mandatory qualifications for managing agents—again, that is welcome —but I am concerned that, without an independent regulator to enforce codes of conduct and ensure we can reap the benefits of those qualifications, that will be of little benefit to many leaseholders. Furthermore, without a dedicated regulator, the burden of enforcement will continue to fall on individual leaseholders—and, in future, commonholders—to take up lengthy and expensive legal action to hold their managing agents to account.

Three key benefits show why a managing agent regulator is desirable. First, good regulation is good for markets, and I think this will help growth, not hinder it. There are significant costs and financial waste in the current system, and the leasehold brand has been exceptionally damaged by the poor behaviour of managing agents. A regulator has the chance to restore confidence in leasehold and commonhold in the future. Secondly, introducing a regulator for managing agents would help ensure the success of the commonhold tenure. The need for managing agents will not go away with the introduction of commonhold. Thirdly, introducing a regulator for managing agents is strongly supported by those in the system, the customer—the leaseholder—and also the provider of services themselves.

As the Chair of the Select Committee has mentioned, leaseholders overwhelmingly responded to the survey that they want to see this change, and the Property Institute, RICS and even the managing directors of FirstPort and Rendall & Rittner are all supportive of the need for more effective regulation and a regulator of managing agents. Those in the industry understand that there is nothing to gain from the poor behaviour of some undermining the good behaviour of many more.

Yes, we need to take forward the existing important proposals in the draft Bill, but the time for the regulation of managing agents is now—in this Bill. It is vital that something is done and is clearly seen to be done before the next election for existing leaseholders struggling day in and day out with rogue managing agents. The establishment of a regulator would be a clear signal to existing leaseholders that we are serious about protecting them, as well as a signal to the property and construction sectors that this Government are focused on restoring stability to the housing market and, crucially, calling time on the poor practice of rogue managing agents, which are far too common in our system, finally fulfilling the promise of ending fleecehold for good.

I thank the Chair of the Select Committee, the hon. Member for Vauxhall and Camberwell Green (Florence Eshalomi), whose motion, report and recommendations for the Bill I support and welcome. Thorough and fair leasehold reform is long overdue. My inbox as MP for Brighton Pavilion is littered with horror stories from constituents about their experiences as leaseholders who are forced to fork out extortionate service charges with no value for money, poor maintenance and no transparency on how that money is spent, as well as awful communications. My leaseholders continue to suffer from a lack of agency in solving the building safety scandal, which has left too many leaseholders in Brighton’s many high rise and mid rise blocks stuck in unsafe homes.

Some of my constituents tell me that they believe freeholders are still trying to cut corners and do this work on the cheap. Just last month I was contacted by multiple constituents about developer Barratt Redrow’s plans to remediate their blocks, built in the early 2000s, to a B1 standard, rather than to an A2 standard as they had understood would happen. This type of dispute, nine years on from the avoidable Grenfell disaster, is commonplace, and it is so worrying for too many of my constituents.

I, too, want to talk about property management agents. A large number of leaseholders in Brighton and Hove are in a nightmare situation right now of not being able to access money paid into accounts managed by just one large property management company in sudden crisis. Under current leasehold regulations, when a managing agent’s client accounts are frozen, or irregularities are identified that suggest mismanagement of accounts, leaseholders are left exposed to very big financial losses.

In the private rented sector, there is a Government backed tenancy guarantee scheme, but for leaseholders there is no equivalent guarantee on service charge accounts and reserve funds. Section 42 of the Landlord and Tenant Act 1987 does require property management companies to hold service charge contributions in trust and with a financial institution authorised under the Financial Services and Markets Act 2000. Yet the flexibility of how leaseholder money is held in reality means that the sums of money in property management company accounts may far exceed the maximum amounts guaranteed under the financial services compensation scheme. Section 156 of the Commonhold and Leasehold Reform Act 2002 adds a requirement for managing agents to hold service charge funds in designated separate accounts, but it is not yet in force. This lack of enactment seems to leave wide open the potential for managing agents to hold leaseholder money in a way that falls outside of compensation schemes. It cannot be right that leaseholders are left exposed to risk in that way.

To conclude, there is no doubt that the feudal leasehold system is broken and must be abolished in favour of commonhold. The regulation of managing agents to end their exploitation is very, very urgent. The promises that the Government made in opposition, to end the system within the first 100 days, were missed long ago, but we need full reform now, without delay, to ensure an end to leaseholders being ripped off, living in unsafe homes or being exposed to avoidable financial risk and losses.

I congratulate my hon. Friend the Member for Vauxhall and Camberwell Green (Florence Eshalomi) on securing this incredibly important debate.

This issue is the reason I got into politics in the first place. My first community activism was with my fellow neighbours against an unscrupulous developer up in Newcastle. What I learnt from that is that when people are trapped in their own homes by systems which have been designed to extract money from them rather than serve them, they need a Government who are on their side. For too long leaseholders have not had that at all. I am so glad that this Government have taken strong steps already on commonhold and leasehold. There is so much that does need to change.

In the past, as many hon. Members have spoken about today, leasehold has been used as a system that has allowed developers to treat homeowners as a revenue stream: escalating service charges with no breakdown; poor maintenance resulting in unsafe parks; problems with footpaths and dying trees; and to make matters even worse and more insulting, really poor communication from managing agents, which makes it difficult to get your voice heard or your complaint addressed.

On local estates such as Marston Grange, Sancerre Grange and Sheridan Grange, I have worked to help residents register and build residents’ associations, and to raise their cases with managing agents so that they get better maintenance. Working together, we have had some genuinely great results, but for residents on new build estates it should not depend on how active or vocal their local MP is; it should be written into law. I urge the Government to ensure that property managing agents are sufficiently regulated.

I will give the House a couple of examples from my constituency. At my coffee morning last week, a case from Gateway Avenue in Baldwin’s Gate was raised. At their AGM, the residents wanted to form a management company, but they were blocked, and one is being imposed on them against their wishes. On St George’s Estate in Stafford, residents have reported that “it genuinely feels like the managing agent is stealing money from us”

to the tune of £600 to £1,000 per leaseholder. Their charges have trebled. They now have to pay £2,500 to change the rent review period on their lease to be able to remortgage or sell. As a system, that is deeply unfair. At Deanspark Court, a retirement complex—other hon. Members have spoken about this—residents who own their own flats describe management charges as “extortionate”. The company refuses to engage meaningfully. At Adlington Brooklands House in Stafford, a constituent’s ground rent has risen year on year and now stands at almost £2,000, which is nearly six times the national average. I could go on—and on, and on, Madam Deputy Speaker—but I think I have made my point clear.

The Government have taken bold and decisive steps already in capping ground rents, abolishing forfeiture and making commonhold the default for new flats. Those are really significant reforms, but the Housing, Communities and Local Government Committee has called the absence of independent regulation of property managing agents a “significant shortcoming”. Every one of my constituents would agree with that.

As far back as 2019, Lord Best recommended an independent regulator with the powers to fine agents and revoke licences. It is now 2026. The case for that has been made consistently, and delivering it would be a tremendous contribution by this Labour Government.

Does my hon. Friend agree that it would also give some comfort to my poor residents on both Ribblesdale Avenue in Accrington and Lyndon Park estate in Great Harwood, who are currently faced with the impending truth that FirstPort will shortly be their managing agent? They are rightly terrified about what that might mean for them and what expense it might add, as well as the failure of such organisations to manage local parks and so on. Taking the steps that she mentions will help give my residents confidence that they will have the protections they deserve.

I wholeheartedly agree with my hon. Friend. Given FirstPort’s record and the number of times that FirstPort has been called to Parliament—it has been called to speak before the Housing, Communities and Local Government Committee and the “Labour for Leaseholders” group, which has worked really hard—it is an abomination that it is still getting contracts, to be honest. As someone who used to award contracts in my previous career, I think it is mad when previous behaviour is not taken into account when giving out contracts, and FirstPort is a case in point—absolutely atrocious behaviour.

Learning from my own experiences, I am helping constituents on estates across the constituency, as I am sure many hon. Members are, to form residents associations to fight back, but I think we are beyond that. We should not need to be fighting back any more; we should have the regulation in place to protect us.

I very much welcome, as I am sure do most of colleagues on the Labour Benches, the Government’s actions so far on commonhold and leasehold, and I look forward to their further steps. Today, I would like to speak to the issue of property management agents, particularly in the context of unadopted estates.

As with so many issues, the fundamental problem here is a lack of housing. Despite the enormous actions taken by this Government to get the housing market moving, the reality is that housing delivery collapsed in the wake of the 1984 housing legislation. Anyone who looks at a graph of housing delivery since that point can see that the mass exit of the state from the direct delivery of housing has never come close to being replaced by the private sector. That is one reason why I was very excited this week to see the Secretary of State’s comments on the potential mass re entry of this Government into housing delivery. It is one of the very few things that could resolve the issue, because we have a broken market.

People are forced to accept unreasonable housing conditions because they have no choice. Until we resolve the broken market, we will continue to have various forms of exploitation. The reality is that developers—there are good developers and bad developers—will, overwhelmingly, seek to minimise their costs as far as possible, whatever the impact on the communities they are creating. If we allow poor practices to be possible within the law, we will see poor practices being delivered by these people.

We need to be mindful, of course, that regulation has an impact. As someone who has delivered local plans, I can tell hon. Members that I was always very mindful of the requirements I was putting on developers, because I knew that every single requirement was an affordable house being taken out of the system. As legislators, I think we have sometimes been a bit careless with unnecessary additional requirements. We must ensure that regulation is proportionate, but in this case it very much is.

I have been dealing with the issue of unadopted estates for the better part of two decades now, and no worse example exists in my experience than that of Forge Wood. It is part of a new town that has all the services that the neighbourhood principal should deliver for a neighbourhood, but unlike in my other neighbourhoods the residents of Forge Wood are all having to pay for them a second time: once through their council tax and a second time through their management agency, with a fee that rivals the level of district authority council tax. They are paying more for fewer services.

There are questions over the nature of the contracts and the contractors that are brought in. If we look at any of those property management agencies, the company secretaries are registered to hundreds, if not thousands, of such companies. How effective can someone be when they are registered as secretary for thousands of companies? It is frankly little more than fee farming from residents for no benefit. I have gone through the articles of association to try and find ways for residents to wrest back control, but the complexities mean that these people are completely unaccountable. It masquerades as ownership by those communities, while delivering an unaccountable system.

What should we do? The Government’s existing proposals are an improvement, and I welcome the Committee’s recommendation of the independent regulator, which should come into effect. On the issue of unadopted estates, ultimately, we now have to turn off the tap. We need to establish fixed conditions and fees, so that they are all adopted at the point they are completed and handed over to local authorities.

We also need to establish a pathway for existing unadopted estates to be taken on by the state, with a need for local authorities to plan how they bring them in. I believe it is possible to adopt them within the existing system and within financial constraints. However, we cannot do that while running up a flag to tell every developer in the country to ditch their responsibility to get the estates adopted. I am pleased by the recommendations before us, but further action is needed on an independent regulator and on turning off the tap on unadopted estates.

The exploitations in the leasehold system are endless: unfair service charges, ground rents, marriage value buy backs, the hidden cost of utilities, inflated insurance—the list goes on and on, as do the ways that freeholders line their pockets while ordinary homeowners bear the cost.

We have seen that acutely in Sheffield, with Andrew Milne buying up hundreds of freeholds at £250, and then shamefully charging homeowners extortionate prices to buy them back. He has rightly faced consequences with the Solicitors Regulation Authority and the police for blackmail. It was only a few months ago that residents in Walkley in my constituency were receiving legal letters saying that their leases would soon be up for sale, leaving them worried whether they too would be subjected to extortion. No one should be living with that kind of fear.

Across the developments of Columbia Place, Millsands, Riverside House, Anchor Point and Little Kelham in my constituency, residents speak with one voice: the problems in their homes are overwhelming; the responsibility to chase managing agents is taking up their time; and they are being charged extortionate amounts for work that never seems to happen properly, or at all.

Two weeks ago, I met with over 40 residents from Little Kelham. Their stories told of one horror after another. I heard from a family with a six year old child living in a home with a broken window, who were told by the managing agent that there was not enough money to fix it. Another family were told to move out from their home for six weeks for repairs. It ended up being 14 months, and when they moved back in, the repairs were incomplete.

Another resident told me that her service charge went up by 250%, and when she challenged that, so opaque were the figures and how they were calculated, they were then dropped. Many other residents, who had tried to take over the management of their properties, complained that the finalised accounts they requested never materialised. The lack of financial transparency is staggering. It shows that these are not only isolated failures but symptoms of wider structural problems. There are two things that my constituents are calling for above everything else: transparency in their arrangements, and accountability when things sadly go wrong.

Today’s motion rightly says that the absence of statutory regulation for property management agents represents a major weakness in our plans for reform. The Housing, Communities and Local Government Committee has made it clear, as does the evidence in Lord Best’s review, that voluntary self regulation has not delivered the standards that leaseholders deserve, nor will it deliver the accountability they want. Where management agents repeatedly fail residents, simply issuing guidance is not enough. The regulator should be able to impose meaningful financial penalties and, where appropriate, remove licences altogether.

Leaseholders deserve far greater transparency over their service charges, stronger rights to challenge unreasonable costs, and easier routes to replace managing agents who fail to deliver. We have got to seize this opportunity to ensure that managing agents are properly regulated. That is the action that my leaseholders deserve and that I hope the Minister will carry out in following through the recommendations of the Committee.

I am glad to be able to contribute to this debate to give voice to a number of my constituents who have been suffering as a result of the feudal leasehold system for far too long. I thank the Chair of the Housing, Communities and Local Government Committee, my hon. Friend the Member for Vauxhall and Camberwell Green (Florence Eshalomi), for setting out the issues that so many of our constituents face.

The measures outlined in the draft Commonhold and Leasehold Reform Bill mark a significant step towards a fairer and more balanced system of home ownership. I thank the Minister for his work on the Bill; he is alive to the many issues and working hard to deliver on the many pledges in our manifesto that we were elected on.

For generations, the leasehold system has many homeowners paying substantial service charges, ground rents and administration fees, while having little control over the management of the buildings they live in. Too often, leaseholders have found themselves trapped in a system that is expensive, complex and heavily weighted in favour of freeholders.

The issues do not discriminate on size, affecting both small blocks and larger developments. In Luton South and South Bedfordshire, I have constituents living in a small block of 12 flats, Harrowden Court, of which Hastoe Housing Association is the freeholder. They have raised a number of issues with me in recent years relating to Hastoe’s management, including significant communication issues and substantial bills presented to leaseholders with little to no explanation for why they are expected to pay the charges.

Most recently, my constituents were notified by Hastoe of significant service charge increases over the next two financial years—2026-27 and 2027-28—to fund fire safety and external wall remediation works. Tenants’ service charge and sinking fund contributions to cover those costs will rise from around £250 a month to £900 a month. That unaffordable increase has caused considerable shock, stress and anxiety.

Residents are also concerned about a lack of transparency, as Hastoe has not provided estimated total costs, explained how charges are distributed to residents, or evidenced any competitive procurement process for carrying out the works. Such remediation works should be the responsibility of the building developer, and it is extremely unfair that those costs are being passed on to residents.

That is just one example of leaseholders being failed. I have a number of constituents living in Stockwood Gardens, a larger development of 11 blocks managed by MCR Homes, who are facing a similar reality. They are paying increased service charges, year on year, with little to no explanation as to why. Basic services that they were promised, including grass cutting and building maintenance, were provided at a sub par standard or not at all. Many have also reported basic faults with their blocks, such as lights in hallways not working or regular leaks, which have been reported and not fixed, with no clear timetable for repair.

It is clear from those examples alone that there is a significant power imbalance in the current leasehold system, and companies managing those properties essentially have free rein to overcharge residents and underdeliver on services, with little to no transparency or accountability. I note that the HCLG Committee has done extensive scrutiny work on the draft Bill, and its report recommends that the final Bill include “provisions to establish a new, independent public body as the Regulator for property managing agents, with enforcement powers. This must include powers for the Regulator to issue fines or revoke licences of managing agents who breach a statutory Code of Practice”.

I support that recommendation and believe that it is an opportunity to prevent bad practice and drive cultural change within the industry, while affording leaseholders greater protections.

I welcome the legislation, but it cannot be the end of the conversation. Leaseholders’ voices and concerns must continue to be heard if we are to fully address the problems within the leasehold system, and ensure our constituents feel the benefit of the reforms once and for all.

I start by referring the Chamber to my chairmanship of the leasehold and commonhold reform APPG, where I work closely with organisations such as the Leasehold Knowledge Partnership and the National Leasehold Campaign, to which I pay tribute.

As we have heard, complaints from constituents about management companies and the exorbitant fees they charge are something that we all deal with on a weekly basis. It is not a new phenomenon; it is something that I raised on the Floor of the House five years ago because I could see it becoming the next big scandal, and sadly that has come to pass.

Homeowners who buy their homes in good faith understandably expect to live in a functioning estate where responsibilities are clear and, where necessary, charges are fair. All too often, the opposite is the case. Homeowners are left in the pernicious situation of paying for services once in their council tax bill, and once again in extortionate service charges. Poor services are often exacerbated by a lack of accountability. Residents are forced to persistently chase matters, while frequently being passed from one organisation to another without resolution. But as soon as residents fall behind with a payment, these companies leap into action, often using aggressive debt collection tactics. Adding insult to injury, the financial structures of these estates are all too frequently opaque: governance structures lack transparency; companies are labelled as dormant for accounting purposes; and dodgy practice—where freeholders, management companies and debt recovery companies operate in an interconnected web—allows them to rack up eye watering fees.

I will cite one very recent example from my constituency, where a constituent owed some service charges to RMG, with which I think we all are familiar. Looking at his bill, the constituent had been charged an instruction fee and a client admin fee on top of his service charges, adding another £600 to the bill, yet RMG had somehow managed to inflate the £1,100 owed in service charges to £3,300 by the time court papers were issued. There is no world where a trebling of this sum can be justified, and it just shows what a scam the system is.

Time and again, I see people raising problems from a range of new build developments in my constituency, including Ledsham Garden Village, Mersey View and Jacks Wood estates, where homeowners face a range of challenges. In Ledsham Garden Village, residents are facing combined service charges and fees running into hundreds of thousands of pounds, although only a fraction of the spending can be accounted for, which just rubs salt into the wound. Residents do not have any idea how the money is being spent and if it is being spent on the estate at all; they do not know whether the company is getting best value for money, how reserves are being used or how costs are allocated over different phases of the development. There are persistent maintenance issues, inconsistent grounds maintenance and safety concerns because of poor traffic management. People who buy their homes in good faith deserve better. Then there are the Jacks Wood estate in Ellesmere Port and the Mersey View estate in Bromborough, where the adoption process has effectively stalled, leaving residents in limbo.

The regulation of managing agencies is clearly something this House would like to see, but I would like to make some further suggestions. We could introduce standard costs across the country for estate management fees so that there would be a baseline from which to judge these companies. Residents could be given a far greater say over who manages their estate. We could have three yearly ballots in law on whether they wish to carry on with the same management agents, which could end the “put up or shut up” approach that a lot of these companies adopt. As we have heard suggested today, an immediate step the Government could take would be to make it a condition of any planning permission moving forward that the developers must hand over the whole estate adoption to the local authority and pay a commuted sum for it, ending that revenue stream entirely.

On the point about estate adoption, I wonder whether my hon. Friend agrees that we need to get on and implement section 42 of the Flood and Water Management Act 2010, which would require sewerage to be adopted as part of the public sewer as soon as possible.

Yes, indeed. Residents of an estate in Eastham have been paying for a sewer that they cannot actually locate, which just shows that there is too much ambiguity over what these charges are for.

Finally, local authorities could be given powers to use their resources to bring estates up to an adoptable level and then charge the developers for that work retrospectively. The developers do not want to do it, and we need to find a way of breaking that logjam. These are just some of the measures that, alongside the many welcome reforms from this Government, would improve the lives of hundreds of thousands of people.

I thank my hon. Friend the Member for Vauxhall and Camberwell Green (Florence Eshalomi) for securing this very important debate, which I know will be of interest to constituents of mine who find themselves victims of fleecehold.

Across the country, too many people are now buying homes on freehold estates and then finding themselves let down by developers and estate management companies that fail to deliver the services they promised. Developers build these estates, sell the homes and then, despite levying management charges, often fail to maintain the essential infrastructure that residents rely on every day, whether that is roads, drainage systems, which we have just heard about, or shared green spaces.

I have seen this at first hand in the experience of residents of Moorside Drive, a development by Gleeson Homes. My constituent Daniel first contacted me in July last year after purchasing his home in October 2024, when he had been assured that the outstanding works would be completed by March 2025. That deadline slipped to the spring, and then the summer; as things stand, residents have yet to receive any meaningful communication about when the work will finally be completed. The problems they are facing are significant: the road serving the estate has deteriorated and remains unfinished; the shared green spaces that were promised as part of the development have still not been delivered; and commitments to enhance and protect biodiversity have yet to be fulfilled.

Communication with residents has also fallen well below an acceptable standard. Daniel tells me that he was given no notice before work began directly outside his family home, and I have heard that traffic management measures were not properly put in place during other works, creating unnecessary disruption and safety concerns. Landscaping, meanwhile, cannot be completed until the roads are finished, and unresolved drainage issues continue to affect a number of residents on the estate.

This is not like being sold a faulty item that can simply be returned to the shop. These are people’s homes—the places where they expect to build their lives, raise their families and feel secure. When developers and management companies fail to honour their commitments, it is residents who are left living with the consequences. That is why reform and regulation is so important. Homeowners deserve transparency, accountability and effective regulation of the companies responsible for managing their estates. As we have heard already this afternoon, homeowners should not have to fight for basic standards of maintenance or chase endlessly for information about works that should have been completed months earlier.

I very much welcome the work of this Labour Government to strengthen the rights of people living on managed estates. These reforms have the potential to deliver greater fairness, improve accountability and ensure that homeowners receive the standards of service they have paid for. People who invest in a home deserve confidence that those responsible for maintaining their communities will fulfil their obligations. It is only right that we continue to strengthen protections for homeowners, and ensure that managing agents and developers are held to account.

I thank my hon. Friend the Member for Vauxhall and Camberwell Green (Florence Eshalomi) for the assiduous work that she has done with her Select Committee.

It is inspiring when we, as Back Benchers, can have genuine influence by bringing the concerns of our constituents to this House of Commons and directly into the minds of Ministers, and when improvements result from that. I can recall my hon. Friend the Housing Minister using his mobile phone to instruct officials from a debate—because he was hearing so many complaints from hon. Members—to call in the CEO of FirstPort.

I want to touch on a couple of examples from my constituency. One constituent, a customer of FirstPort, had their service charge increase from £980 in 2023 to £3,800 in 2026, causing them financial hardship because they had to take out a loan in order to pay the bill. Now they say that their property is unsellable. There was a clear lack of transparency, with repeated requests for service charge accounts allegedly being ignored. Another constituent reported significant concerns about FirstPort property management, highlighting that service charges increased from around £1,000 in 2021 to £3,400 in 2026 for broadly unchanged services. They, again, allege lack of transparency and more. Residents ultimately exercised their right to manage and appointed a new managing agent, which estimates comparable services at around £1,600 per year, suggesting that FirstPort’s charges were unduly high.

I pay tribute to the work of Labour for Leaseholders, and particularly my hon. Friends the Members for Cities of London and Westminster (Rachel Blake) and for Hendon (David Pinto Duschinsky). We held a mini inquiry and gave evidence to that inquiry. I think it was clear to all hon. Members that there is a captive market and that private companies and others are exploiting people; it may be within the law, but we have seen the behaviour of these companies and we are calling it out. One has to ask why and whose interests are being served—I will simply leave that question there.

In my remaining time, I want to move on to something that started as a negative and ended up as more of a positive. Residents of Eastfield House, a block of flats in Houlton in my constituency managed by Clarion Housing, repeatedly contacted me about problems. I went out to see them. I saw one of the flats, and the various problems with maintenance and lack of transparency—frankly, it was the usual story. It was deeply concerning: I saw the anguish, the stress and the upset of these people, who are having their dignity disrespected and damaged.

I contacted Clarion, which generously attended a meeting that I held with residents a few weeks later, and is taking action. The company has already given a payment to those residents, and it has a single point of contact and an action plan. It is doing what it can to improve the situation. I pay tribute to Clarion; it has shown that things can improve.

The Leasehold and Freehold Reform Act 2024 was a very good start, and I know that the Government are consulting further. This Government are intervening in failing markets, because if we do not do so, the participants in the market will continue to do the bare minimum or, worse, to exploit people.

Does my hon. Friend agree that a proper regulator for the property management sector, far from being anti growth, would be a pro growth measure bringing transparency and good functioning to these incredibly opaque markets that exploit leaseholders and renters?

I entirely agree. As I was saying, the market is failing, and many of the participants in the market will continue to do the bare minimum or, at worst, exploit people. As we have heard from hon. Members, some of those companies and individuals will continue to push the limits of decency, and possibly legality, because there is no accountability. Let us make it as hard as we can for them. Let us protect and empower the people who really count: the leaseholders.

In my remaining seconds, I ask the Minister to touch on the point raised by my right hon. Friend the Member for Hayes and Harlington (John McDonnell) about the need to look at the right to manage process. I suggest that the threshold should be reduced to 30% or that a deemed consent process should be brought in so that our residents can take control of poor estate management. We owe it to them; they deserve dignity in the housing that they have purchased.

For 28 of the 29 years that I have been in Parliament, I have campaigned for leasehold reform. I was instrumental in the Commonhold and Leasehold Reform Act 2002 and on the Bill Committee during the passage of the 2024 Act. I welcome the Select Committee’s report and pay tribute to the Chair of the Committee, my hon. Friend the Member for Vauxhall and Camberwell Green (Florence Eshalomi), for her remarks.

There are 11,000 individual leaseholders in contact with my office. I pay tribute to Jackie George, who is in daily contact with hundreds of them; she is my office manager, and most of what she does with leaseholders is actually in her spare time.

Leasehold reform is about control. It is about passing power and control from the moneyed interests to the people whose homes they affect. To do that, we must enact the remaining Law Commission recommendations on enfranchisement and the right to manage. For enfranchisement, that means restricting development value. It was promised to Parliament by the last Government in 2021 and it was meant to be in the 2024 Act. It is just wrong that leaseholders can be held to ransom by hypothetical development value, with developers claiming that they could build in the garden or on top of the building and demanding huge extra sums to stop leaseholders from affording the freehold purchase. Nicola Muir, a barrister at Tanfield Chambers, has wryly observed “it is amazing what development landlords believe is possible and the profits they claim they will generate”.

She cited one instance where the landlord initially claimed £34 million for the alleged potential to build a skyscraper in the front garden of a block.

Today, the right to manage is a shadow of what the Labour Government legislated for in the 2002 Act. Freeholders can punish leaseholders who have taken back control of their blocks with the right to manage because of the Supreme Court decision in 2022—the Settlers Court decision—which went against the intention of Parliament by allowing freeholders to retain control of estate charges. We need to revert to the pre Settlers Court position; the Law Commission’s remaining right to manage recommendations would help to achieve that.

An entire legal industry has emerged in torpedoing right to manage claims for freeholders, where tiny procedural details can see leaseholders spending literally a fortune to defend their right to manage in tribunal and the courts, only to lose the claim. The tribunal has no power to waive errors made over the procedural traps, yet the reforms to change this—the remaining Law Commission right to manage recommendations that would end frivolous lawfare of freeholders and make right to manage a universal scheme—have been omitted from the Bill, despite previous promises.

I am conscious that the scale of the leasehold crisis has become much worse since the Law Commission issued its final report six years ago. There are quick win policies that could still be added to the Bill, such as reducing the arbitrary 50% trigger for right to manage claims—as many hon. Members have already said—to 30% or 35%. Just imagine if we had a law that that said a bad Government could be removed only if 50% of all citizens with the franchise, and not just those who actually voted in an election, had to support the proposition. That is the situation with leasehold. If the right to manage is a no fault right—

Order.

I thank my hon. Friend and constituency neighbour the Member for Vauxhall and Camberwell Green (Florence Eshalomi) for securing this important debate. Leasehold has become the ultimate con. Given the sheer quantity of leaseholder issues and complaints about the behaviour of property managing agents that my team and I come across weekly, some would think that we would be experts in this area, but no two cases are the same, and each case is more complicated than the last.

The system of leasehold is far too complicated. Whether we are looking at EWS1 forms, cladding, major works or service charge transparency, leasehold involves a number of different parties, each with their own interests, and the vast majority of cases end with all avenues being exhausted and the constituent having to seek legal advice, but not everyone has the time to go back and forth with their MP, raise internal complaints through every mechanism, and then complain to the ombudsman, and not everyone has the time and resources to seek legal support for their case. Thousands of leaseholders are encountering these issues, and they are completely locked out from accessing support. Past legislation to improve leaseholder rights seems to have added an extra layer of complexity, so any new legislation must simplify the system, not further complicate matters.

I have a specific concern about leaseholders in housing association buildings. While recent legislation has improved leaseholders’ rights in privately owned blocks, housing association freeholders have often fallen outside the scope of reforms. Housing associations must be specifically addressed in future legislation.

I turn to the unregulated headache that is managing agents. There absolutely needs to be a mechanism of oversight and enforcement, so I welcome the recommendation from an independent regulator, but that regulator needs not just teeth but claws. It needs to be able to fine managing agents, remove their licence, and prosecute repeat offenders who we know are gaming the system.

I cannot tell the House how many cases I deal with in which a constituent is just trying to get a response from their property managing agent. Frustrated leaseholders are paying ever increasing service charges, and it is simply not right that they are struggling to even get a basic response. Charges climb year on year, but transparency does not climb with them. When my constituents ask for a proper breakdown of what they are paying for, too often they get vague figures, unanswered emails or silence. Lifts are broken, stairwells are unsafe, and communal areas never get cleaned, but still the bill arrives, unchanged and unexplained. Leaseholders have no real power to challenge what they are being charged for—and heaven forbid they refuse to pay their service charge, because then the communication they once begged for comes swiftly, in the form of threatening letters claiming the money.

This would not be tolerated anywhere else. Ofgem, which is not always that great, ordered E.ON Energy to pay £5 million, after customers were left waiting on hold for 18 minutes on average, and half their calls were never even getting through. It fined Maxen Power £1.65 million for poor communication and mishandled accounts. Just this January, a landlord in Harrow was prosecuted and fined £9,000 for failing to provide fire and electrical safety certificates, and a landlord who fails to carry out an annual gas safety check can face an unlimited fine or up to six months in prison. In every one of those cases, Parliament has decided that taking someone’s money and failing to deliver is not just providing a bad service, but carries real consequences. Management agents can take thousands of pounds a year from leaseholders, deliver next to nothing, and walk away with a strongly worded letter. We do not accept that anywhere else in housing law, and we cannot keep accepting it here. An independent regulator must do what was not possible in the past, which is remove the licences, fine the managing agents and, as I say, prosecute where necessary, because what these organisations have been doing is absolutely criminal.

I thank the Chair of the Housing, Communities and Local Government Committee, my hon. Friend the Member for Vauxhall and Camberwell Green (Florence Eshalomi), for all her work on this issue. I also thank the whole Committee and the experts who testified. I would like to speak in favour of the Government’s proposals, and will briefly describe the situation in my constituency and the wild west of management agents, as described by my hon. Friend.

Too many of my residents face deep frustration, even anger, because of the actions of these companies. In many cases, people have worked extremely hard to get a foot on the housing ladder. They bought an attractive flat in what they thought was a nice development, only to be let down extremely badly by these companies, who treat them in an appalling way, offer a very poor service, and charge high costs.

I will mention two case studies. The first is an attractive development in west Reading, for which Remus is the managing agent. It is near to a large Tesco and some parks. It is an attractive redevelopment of a hospital site, with low and medium rise brick buildings that fit the built environment. Many young families live there. It should be a pleasant place to live. However, there are problems with antisocial behaviour, and Remus has persistently failed to respond to very reasonable inquiries and requests by residents. For example, it has failed for months to repair the shutters on the entrance to a car park, and has allowing antisocial behaviour to creep into the car park under residents’ properties. It also failed to restore hot water, which was unavailable in some of the flats.

There has been a whole series of other problems. For example, Remus expected residents to pay for the upkeep and closure of a park in which there was some antisocial behaviour. There are related issues involving other management companies, such as parking problems on some roads. This is all causing extreme stress for residents in the area. I had a public meeting with a number of residents recently, and they explained that very clearly to me. Rightly, residents are outraged by the behaviour of these companies.

The potential for reform is very clear, as my hon. Friend and others pointed out. In one of the blocks in the area, residents have gone through the extremely lengthy process of getting commonhold. That has led to a 50% reduction in the fees that the residents have to pay. That is a very clear indication of both the necessity of reform and the difficulties that some face in achieving it.

I realise that time is pressing, so I will try to pool together several other case studies, from Reading town centre and other parts of our town, relating to failures by FirstPort, Moreland Estate and other management companies. Companies have allowed antisocial behaviour to take place in stairwells, which leaves residents intimidated, and have had a poor response to fire and remediation issues. This is some years after the Grenfell disaster. There is also a series of other difficult problems.

Again and again, residents are being put under pressure. In one case, a resident rightly used the Landlord and Tenant Act 1985 to demand a breakdown of the payments that they were due to be charged, but the managing agent did not respond by the statutory deadline. That is the level of poor service that some of my residents and colleagues’ residents face. I urge the Minister to continue taking action on this important matter.

I congratulate the Chair of the Housing, Communities and Local Government Committee, my hon. Friend the Member for Vauxhall and Camberwell Green (Florence Eshalomi), on securing this important debate. The issues raised in her Committee’s recent report speak strongly to the experiences of thousands of my constituents in Poplar and Limehouse, which is the constituency with the highest percentage of leasehold homes.

Like members of the Committee, I am not just alarmed but very angry about what many constituents have to go through to get even basic repairs and maintenance done. Far too many of them have to deal with uncommunicative —sometimes even rude or dismissive—managing agents, who can offer no clarity on maintenance works, and who delay necessary repairs again and again. To give a recent example, in the heatwaves, constituents living in Royal Captain Court in my constituency have endured the most horrible conditions. The lifts were forced into fire safety mode because of the extreme heat in the tower, which is not air conditioned. One resident fainted on the staircase, and dozens of others suffered in the temperatures. Residents have said that until the BBC reported on the case, they received no replies from the managing agent Sanctuary about how, when or if repairs would be done.

The issue of lift breakdowns is common in my constituency, and will occur more and more as climate change intensifies. On top of that, as we all know, service charges and fees are going through the roof. One constituent recently contacted me to say that their service charges rose by 12% in the last year, after doubling in the decade up to that point. Residents of Aberfeldy Village in my constituency are reporting service charge increases of £600,000 by FirstPort, and residents of the Wapping Lane development report that Ballymore increased their service charges from £7,000 in 2014 to £17,000 this year.

Across the board, residents and constituents tell me that there is no transparency regarding the accounts, and we know that they cannot easily or fairly challenge increases in court. The Government have been consulting on the implementation of section 56 of the Leasehold and Freehold Reform Act 2024, and on provisions around service charge transparency—measures that many of my constituents need implemented swiftly. However, there must also be regulation of managing agents. I cannot simply accept the massive discrepancies in costs, the service charge increases, and the lack of communication and basic decency. In Poplar and Limehouse, many leasehold builds are huge. They are incredibly tall—over 20 floors high, in many cases—and that would make it very difficult for leaseholders to take over and run their building under the right to manage, which is a system that desperately needs simplification.

Some changes are being brought forward in the leasehold Bill, but thousands in my constituency will continue to suffer runaway service charges and from rogue managing agents. In the absence of the abolition of leasehold, it is only right that the Government accept the recommendations of the Housing, Communities and Local Government Committee and Lord Best, and introduce an independent regulator for managing agents through the leasehold reform Bill. I urge the Government to do that.

I declare an interest as a leasehold homeowner, which is very common in Sheffield. I thank my hon. Friend the Member for Vauxhall and Camberwell Green (Florence Eshalomi) for securing this important debate. I agree wholeheartedly with the recommendations of her Committee, and of Lord Best, about a regulator.

I welcome the fact that this Government have begun to take a close look at the injustices embedded in the leasehold system. It treats leaseholders not as full homeowners, but as a revenue stream for distant freeholders and managing agents. The draft commonhold and leasehold reform Bill is an important step forward in correcting the imbalance, and I believe that it will help address many of the structural problems that leaseholders have endured. In my constituency, the consequences of the system are painfully clear, as has been mentioned by my constituency neighbour, my hon. Friend the Member for Sheffield Central (Abtisam Mohamed). Not only have my constituents experienced threats of forfeiture, but they have been asked to pay thousands of pounds to their freeholder for minor breaches of their lease.

The ability of a freeholder to strip someone of their home is an extraordinary concentration of power, and I am pleased that the Government’s commonhold and leasehold reform Bill proposes abolishing forfeiture entirely. However, abolishing forfeiture alone does not resolve the fundamental injustice. Leaseholders remain trapped in a system that, at its core, is a feudal relic—a structure designed not to empower people, but to extract value from them. Under this system, people who have bought homes find themselves paying escalating service charges, opaque administration fees and arbitrary costs imposed by freeholders.

A significant number of my constituents own leasehold houses, and their lease requires them to ask permission from their freeholder before building a loft conversion or extension, and even before selling on their home. Those permissions are demanded in return for ground rents of little worth—often £10 a year—yet they give freeholders extraordinary control over the lives of leaseholders. That is not a fair housing system.

My constituents have a clear ask. They have rightly suggested that leaseholders of houses should be given a statutory right of first refusal when their leaseholds are sold. At present, leaseholders of houses do not have this right, while leaseholders of flats do. If a freeholder decides to sell the freehold of a house, the leaseholder has no guaranteed opportunity to buy it. They may learn of the sale only once it has occurred, several months later. If we are serious about empowering leaseholders, the right of first refusal must be extended. That should be included in the Bill.

It is not just freeholders who cause problems. We have heard about the problems caused to residents by managing agents, including in my constituency, where leaseholders were made to find £22,000 within five months for major works after an inept management company left balconies and walls to crumble, and the eventual repairs to become more expensive. A two bedroom flat on that estate was advertised for sale with an annual service charge of £5,067, or £422 a month, which in Sheffield is a staggering amount of money, given our relatively low housing costs.

Unsurprisingly, some of my constituents have struggled to sell their flats; they are trapped in the Catch-22 that others have mentioned. It is time that we ended that. We need to ensure that all the powers in the Bill are enacted, but we should also be looking at ways to future proof it, and to root the regulator in fairness.

From the moment I was elected in Hartlepool, my inbox, surgeries and public meetings were filled with people telling me remarkably similar and shocking stories about their estate management companies. That is what I wish to focus my remarks on. The tales are very similar: terrible communication, risible explanations and no accountability, but ever rising bills. Ahead of this debate, I asked constituents to send me examples, and I was overwhelmed by the sheer number that I received, so I obviously cannot go through them all today. The stories came from Marine Point, the Longbranch estate, Wynyard Mews, St Mary’s Court and other estates across the town.

One constituent, Andrew, highlighted the fundamental unfairness between estates adopted by the council and those left in private management: people can live just streets apart, pay the same council tax, and yet receive completely different levels of service. Derek asked me a simple question: why should he pay both Hartlepool borough council and Sela Management, when the council cannot carry out the work, because it has not adopted the estate, and the management company also appears unwilling to carry it out?

It is an entirely fair question.

Ray and Janice wish to put their property, which they own outright, into a living trust, yet they were delayed from doing so because Sela Management must first consent. They describe this as “medieval behaviour”. Jordan told me he was threatened over alleged unpaid invoices that he never received. The first meaningful communication was not an explanation; it was a demand. That is no way to treat people. When Helena bought her Longbranch home, she was told that as more families moved on to the estate, the costs would fall, because they would be shared more widely. The number of households has more than doubled. Her charges have not fallen; they have risen by more than £200.

Kim described waiting months for basic repairs, only for residents to feel that the work that was eventually carried out was of poor quality. Others have shown me photographs of unfinished drains, damaged kerbs and maintenance left incomplete. These are not legal technicalities; they are the everyday experiences of ordinary families—people paying real money for work that they cannot see, cannot verify and simply do not believe has been carried out properly.

My constituent Christine, whose property is managed by Kingston, told me that residents were collectively charged around £24,000 to repaint a block of flats on the headland. Within three months, the paint was already peeling. [Interruption.]

Order. Because of a fire evacuation of the Palace, the Serjeant on duty is requesting a suspension of the sitting. I have been advised by the Serjeant at Arms that the Chamber and Gallery should be evacuated, using the nearest available exits. Please proceed in an orderly manner and follow the directions of Doorkeepers or security staff.

Sitting suspended.

On resuming—

Before I call Jonathan Brash to conclude his speech, the remaining Members will have a time limit of three minutes.

I call Jonathan Brash.

As I was saying, I welcome the Government’s commitment to leasehold reform, but Ministers must ensure that estate management companies are not treated as an afterthought. The Leasehold and Freehold Reform Act 2024 provides important powers that have not yet been brought into force, so I urge Ministers to do that. Estates do need to be managed, but we should go back to how they were managed: by local authorities. That is the way to truly fix the system: ensure that every estate is adopted by every council and drive these estate management companies into the dust where they belong.

I thank the Housing Minister for all his tireless work on these landmark commonhold reforms—I only hope he finds my constant lobbying not too tiresome. I also thank my hon. Friend the Member for Vauxhall and Camberwell Green (Florence Eshalomi) for her leadership on this issue.

My parents and grandparents are in the Gallery today. I thank them for ensuring that throughout my childhood, I had a roof over my head. Thanks to their efforts, I have enjoyed the childhood tour around all the various property tenures possible under English law—from council, to private rental, to leasehold, to freehold and a brief interlude as lodgers in a community Christian church.

When my parents moved to Earley, they bought a freehold house that was built in the 1960s. It came with no strings attached. If they had bought the same house on a new build estate built in the last two decades, it would have likely come with estate charges, standing charges for some, and often low quality roads and communal infrastructure that will never have any route to adoption by the local council. They would have had a contract to pay these fees to a property manager—someone they did not choose and who they almost certainly cannot leave. Five million leaseholders also face similar fees, from ground rent to property management charges that are difficult to change.

What has happened over those few decades since the 1960s to make things so much worse for young families moving into new builds today? The negotiations and relationships between developers and local authorities, as other Members have pointed out, have taken a turn for the worse. As a result, over a thousand constituents have been in touch with me, seeking advice for taking control of property management and breaking free of the monopoly held over them.

The problems are not just about charges. In 2024, the average annual service charge bill rose by 11% to £2,300—four times the rate of inflation over the same period—so the average service charge now exceeds the average cost of all other utilities combined.

In Shinfield, the impact on my constituents goes beyond that; they also pay a suitable alternative natural greenspace charge. Following negotiations that I instigated between the landowners and the residents, they are still waiting for a final agreed position. They also face a lack of transparency. Residents in Woodley, for example, have negotiated through me a service charge freeze with their managing agents, FirstPort, but there is still lack of transparency about the underlying charges.

Will the hon. Member give way?

Order. The hon. Gentleman might heed the fact that Members are on a very tight time limit, and he has not been present for any of the debate until this point.

One resident, June, said: “I’m afraid that all the years of bullying, alternating with being ignored by FirstPort on all levels, have finally taken their toll on my mental health”.

It is time for better regulation.

Even before coming to this place, as a local councillor I dealt with so many issues relating to leasehold property management and unadopted estates.

A notable example is the Doulton Brook estate in my constituency, a mixed freehold and leasehold estate with houses and apartments built just over a decade ago by Taylor Wimpey and managed by Trinity Estates. Residents have been dogged by issues from day one, with a lack of transparency around estate management charges and decision making, inheriting responsibility for communal land and infrastructure, and an associated public open space linked to the estate with no clear management and future transfer plan. I pay tribute to Alan Watts, the lead resident of the Doulton Brook action group, and all the residents who have worked closely with me to hold the developer and the managing agent to account and unpick the multitude of issues that exist on a mixed estate like that. I worked with the residents, the council, the managing agent and the developer to get the estate up to an adoptable standard. That was not a quick process, with pushback every step of the way. Developers should not be allowed to leave estates in an unadoptable condition, especially not to use it to generate more money from residents. I hope the Minister will look at how we can facilitate retrospective action for existing estates suffering with the fleecehold system, as well as new ones.

I am part of the Labour for leaseholders group of MPs, and we challenged Trinity Estates’ CEO directly on poor practices. It was clear there was a total lack of oversight from head office as to what happens on the ground. They promised they would do better, but Alan and the other Doulton Brook residents have seen nothing change.

I also want to raise concerns about the use of leasehold in retirement apartments such as Webb Court in Stourbridge, managed by FirstPort. Residents seeking to enjoy their retirement are left stressed and frustrated by poor communication and lack of accountability, with an agent who seems to see the residents as a hindrance rather than customers to serve. Recently, FirstPort took the decision to upgrade the alarm call system—not a problem, but the way it was done meant that elderly residents faced a sudden demand of a lump sum of £1,100, to be paid immediately. Following my intervention, that magically reduced to £300, and we negotiated a payment plan, but this was despite nearly £100,000 sitting in the reserve fund.

I have provided support with issues in other retirement complexes with other managing agents, such as lifts left unfixed, as we have heard today, and residents harassed for payments that they have already made. I hope the Minister will consider the impact on our older generation in such situations, so that they are treated with the respect and dignity they deserve.

That brings us to the Front Benchers. I call the Liberal Democrat spokesperson.

I thank the hon. Member for Vauxhall and Camberwell Green (Florence Eshalomi) and her Select Committee colleagues for their excellent report and for securing this important debate. Members on both sides of the House have made important points, including my hon. Friends the Members for Woking (Mr Forster) and for Surrey Heath (Dr Pinkerton), who resolutely spoke up for their residents.

The Liberal Democrats welcome the introduction of a commonhold framework, the abolition of leasehold for new build flats and the end of forfeiture. Those are clear steps in the right direction, but they do not go nearly far enough. Liberals and Liberal Democrats have been campaigning for an end to unfair residential leasehold since the Liberal Government’s 1909 people’s Budget, and over 100 years on, progress has been woeful. Nearly 5 million households in England are living under this feudal system today. The Housing Secretary himself has called ground rent “money for nothing”, so why pay £250 for nothing for the next 40 years?

For any of the 5 million leaseholders living under this system right now, the draft Bill does very little to help them gain enfranchisement, fix service charges or take control of how their buildings are run. The Government have said they are committed to bringing “the feudal leasehold system to an end.”

Where are the goals and milestones that mean it will happen? A target date is needed by which all leaseholders have had an affordable opportunity to convert to commonhold and for the right to manage across the sector.

As a first step to achieving those targets, the Government should enact all the remaining Law Commission recommendations on enfranchisement, including cutting out the swindle of development value—recommendations that came out six years ago but, for some reason, remain unimplemented. The Government inherited that delay but then promised in the 2024 King’s Speech to enact them.

Let me give the House a specific example of what the delay in implementing those recommendations means in practice. One constituent in Taunton and Wellington went through the right to manage process as it stands. It took him four years, and he told me it “felt like a full time job.”

The delay meant that he kept paying an overpriced service charge, adding up to an extra £5,000. Residents were forced to set up two separate right to manage companies, duplicating costs, simply to manage two buildings in one estate. Once they had finally won the right to manage, they found no legal way to recover even the basic costs of the right to manage company because the costs were outside what the lease defined as a service charge. There was a similar story when they went to amend their leases. What links all three problems is that the Law Commission recommended they be fixed back in 2020, so why not implement them in the forthcoming Bill?

Right to manage should not be a niche arrangement that only a determined minority can navigate their way into. Landlords and freeholders, who hold all the information and resources, should be required to offer right to manage through a ballot of residents, with a presumption in favour unless more than half of residents vote against it. In respect of leaseholders being enfranchised into owning their own home, and setting a target, the Minister should bring back the amendment he tabled in opposition on properly setting deferment and capitalisation rates. The Bill appears not to contain such a provision.

Before I end, I want to say a word about “fleecehold” as it affects freeholders. They face exactly the same issues of moving in, then having no control over the fees they are forced to pay. Homeowners should be given the right to manage the estates they are contracted into having responsibility for. I understand that the Government have asked the Law Commission to look into this, which is welcome, but the track record on Law Commission advice being acted on is worrying. On 27 January, the Minister promised my hon. Friend the Member for Thornbury and Yate (Claire Young) that those residents would get protection in this Parliament, but that protection is not in the Bill. When will it be legislated for?

In the meantime, councils should be given greater powers to adopt estates. Also, we need a property management regulator of the sort Lord Best recommended, which has the power to crack down on and cap the most exploitative service and estate management charges.

Six years have passed since the Law Commission made its recommendations and seven since Lord Best reported. Forty two years will pass before leaseholders are free of the scourge of ground rent. Yet we still have no goal from the Government on how long it will take for the majority of leaseholders to enfranchise or to gain the right to manage, or for freehold estates to be sorted out. In closing, therefore, I ask the Minister for three things. First, enact the remaining Law Commission recommendations, so that leaseholders get the support they need. Secondly, create a regulator as a matter of urgency, and give it teeth to end rip off charges. Finally, set a clear timetable for enfranchisement and right to manage becoming the norm, so that people win control over their own home. Let us free people from the leasehold trap. The Liberal Democrats would do that without delay.

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.

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

I start by declaring an interest: my wife is the joint chief executive of the Law Commission, whose work I will cite in the course of my remarks.

It is a pleasure to respond to this vital debate on behalf of the Government, and I warmly congratulate my hon. Friend the Member for Vauxhall and Camberwell Green (Florence Eshalomi) on securing it. Commonhold and leasehold reform and the regulation of property agents are issues of the utmost importance to millions of homeowners across the country, and I commend her and the Backbench Business Committee for giving the House an opportunity to debate them in detail. Let me briefly put on record once again my sincere thanks to her, the other members of the Housing, Communities and Local Government Committee, and its Clerks for the huge amount of work undertaken in support of pre legislative scrutiny of the draft Commonhold and Leasehold Reform Bill.

This has been an excellent debate, with many informed and passionate contributions, and I thank all hon. Members who have participated. Collectively, those contributions have served to reinforce both the complexities and challenges of leasehold reform and the strength of feeling that exists across the country in respect of the need to act boldly and urgently to provide relief to the millions of leaseholders and residential freeholders currently suffering as a result of unfair and unreasonable practices—and make no mistake: they are suffering. We have heard of some particularly egregious cases in this debate.

What may seem like prosaic matters to many—service charges, ground rents, consent fees—are the source of acute financial hardship and misery for huge numbers of those living in one of the approximately 5 million leasehold dwellings in England and Wales. Let me be as clear as I can from the Dispatch Box: leaseholders are being routinely gouged by freeholders and managing agents acting on their behalf. They are being gouged as a result of a system that denies leaseholders control over the homes they live in and have paid for and subjects them to extraction in the form of punitive, escalating ground rents, unreasonable or extortionate charges, unjustified permissions and administration fees, and onerous conditions, often imposed with little or no consultation.

I have said it many times before, and I will say it again: this is not what home ownership should entail. Leasehold is blighting lives. Leasehold is a barrier to a fair and efficient modern residential property market. Leasehold is an anachronism in the 21st century. The aim of this Government by the end of this Parliament is nothing short of dismantling it and bringing the corresponding emancipation of leaseholders.

I will heed your strictures, Madam Deputy Speaker, so I do not have time to respond to all the specific points raised, such as points about freehold estates, service charges, development value and the retirement sector. Those were all well made points, and, as ever, I am more than happy to speak to hon. Members outside of the Chamber. I assure the House that none of those issues are an afterthought. Where there are provisions in the 2024 Act, we are working at pace to take them forward; where there are issues outside of the draft Bill, such as freehold estates, we have consultations and are analysing feedback, as my hon. Friend the Member for Hartlepool (Mr Brash) knows.

In our manifesto, we made a clear and unambiguous commitment to act where previous Governments had failed and finally bring the leasehold system to an end. The forthcoming commonhold and leasehold reform Bill is not the end of that story, but it is integral to honouring that manifesto commitment. As the Committee’s report rightly recognises, the draft legislation represents a significant step towards ending the leasehold system for good, delivering greater fairness for leaseholders while laying the foundations for a reinvigorated commonhold model. I am immensely grateful to the Committee for its detailed and thoughtful scrutiny of the draft Bill. Its report provides a valuable set of recommendations as we continue the process of augmenting, strengthening and refining the Bill for introduction. As my hon. Friend the Chair of the Committee knows, we are considering each of those recommendations carefully, and I hope we can report back in the not too distant future.

I want to make some very brief remarks about commonhold and ground rent, but before I do, let me address the main issue that has been the subject of today’s debate, which is that of property managing agents and the Committee’s recommendation that we establish a new, independent public body as a regulator of them, with enforcement powers. I agree with my hon. Friends the Members for Brent West (Barry Gardiner) and for Luton South and South Bedfordshire (Rachel Hopkins) and others who have mentioned the importance of control. I continue to believe that giving leaseholders control over the buildings they live in is our overriding priority, and that that will help to tackle the majority of abuses.

However, I want to reassure hon. Members that I have listened and heard the serious concerns raised on both sides of the House about the performance of managing agents, both on freehold estates and in leasehold blocks—I know from my own caseload how serious these problems are. Managing agents play a key role in the maintenance of multi occupancy buildings and freehold estates, and as the shadow Minister said, their importance will only grow as we transition towards a commonhold future. That is precisely why we have committed to strengthen the regulation of managing agents.

As hon. Members know—it has been mentioned several times—the previous Government committed in 2018 to regulate the property agents sector. It asked a working group chaired by Lord Best, who I am very pleased to see in the Gallery, to advise them on how to do it, yet over multiple years they failed to act on that report’s findings. We have already progressed work on a number of those recommendations, including mandatory professional qualifications.

However, I will state candidly that in taking forward those and other measures designed to strengthen the regulation of managing agents, we have a choice about how we do so. We face those choices in the context of a substantive Bill that is already around 260 clauses and 20 schedules and could grow further, and the fact that we have made very clear—I stress this point again to hon. Members—that this is not the only piece of legislation required to meet our manifesto commitments. Other pieces of primary legislation are required, not least to enact the remaining Law Commission recommendations on enfranchisement and the right to manage.

I want to make it clear, though, that I take very seriously the Committee’s recommendation of a new independent regulator. I am certainly not going to stand at the Dispatch Box and rule one out—indeed, I am personally extremely sympathetic to it—but we will set our overarching position on the regulation of estate, letting and managing agents in due course. I can assure hon. Members that in finalising that position, we will continue to consider all aspects of Lord Best’s report.

I can feel your eyes upon me, Madam Deputy Speaker, so I am going to skirt over commonhold—I am more than happy to speak to any hon. Members who have particular concerns about that—and speak briefly about ground rents. In particular, I want to touch on the decision the Government made in the draft Bill. We committed in our manifesto to “tackle unregulated and unaffordable ground rent charges”, and we are delivering on that commitment through the Bill. As hon. Members know, the draft Bill will cap ground rents at £250 a year initially, changing to a peppercorn after 40 years. This will deliver immediate relief for hundreds of thousands of leaseholders during this Parliament, and over the lifetime of that policy position, it will save leaseholders between £10 billion and £12.7 billion. It is a significant intervention. After 40 years, all ground rents will change to a peppercorn, ensuring that they are brought to an end in their entirety.

However, it is our view that a 40-year transitional period is necessary to avoid unintended consequences and ensure stability for leaseholders and the wider property market. This is a balanced and fair solution to the problems caused by unaffordable, unregulated ground rents. I agree with my hon. Friend the Chair of the Select Committee that the cap must be introduced as soon as possible, so that leaseholders can benefit from reduced costs and more easily access mortgage financing when looking to move home. Subject to parliamentary timings, we are seeking to introduce the ground rent cap by 2028 at the latest. That is not the end of 2028—it is a point in time in 2028 at the latest—but I want to stress the words “at the latest”. It is up to this House to ensure that pieces of legislation progress more quickly.

Before concluding, I can helpfully clarify the answer to the very specific question that the shadow Minister put to me. There is no ambiguity about the fixes that need to be made to the 2024 Act. It is really unfortunate that we have to make fixes to that Act.

We should not be repairing primary legislation through new primary legislation, but we confirmed in the King’s Speech on 13 May that fixes to those flaws will be included in the forthcoming substantive Commonhold and Leasehold Reform Bill.

To conclude, I once again thank my hon. Friend the Member for Vauxhall and Camberwell Green for applying for this debate, the Backbench Business Committee for granting it, and all those who have participated in it for sharing their concerns, insights and case studies. I look forward to providing the Committee with a formal response to its report as quickly as we possibly can—notwithstanding the current constraints—and I look forward to continued engagement with the Committee as our substantive Commonhold and Leasehold Reform Bill progresses and as we continue to implement those reforms to the leasehold system that are already in statute.

I am mindful of the time, but let me thank the 24 Back Bench Members who have contributed to the debate; I hope that the Minister will see that there is cross party support. We will continue to keep this issue on the agenda, because it is only right that this Parliament does what the Labour manifesto committed to do: bring an end to the feudal leasehold system.

Question put and agreed to. Resolved, That this House welcomes the Housing, Communities and Local Government Committee’s First Report of Session 2026-27, Pre legislative scrutiny of the draft Commonhold and Leasehold Reform Bill (HC40); notes the Government’s commitments to cap ground rents and to bring forward legislation in this Session to support the uptake of commonhold in place of leasehold; further notes the concerning practices of some property managing agents who fail to act in the best interests of homeowners; and calls on the Government to accept the Committee’s recommendation to legislate to create a body with enforcement powers to regulate property managing agents.