Item 5 on our agenda this afternoon is the Member debate under Standing Order 11.21 on leasehold residential contracts. I call on Mick Antoniw to move the motion.

Motion NDM6626 Mick Antoniw, David Melding, David Rees, Siân Gwenllian

Supported by Mike Hedges, Julie Morgan, Jenny Rathbone, Russell George, Jane Hutt, Darren Millar, Simon Thomas, Jayne Bryant, Janet Finch-Saunders, Lynne Neagle, Joyce Watson, Vikki Howells

To propose that the National Assembly for Wales:

1. Recognises that leasehold residential contracts continue to represent a significant proportion of new build properties in Wales; and

a) that leasehold residential contracts are often offered on disadvantageous terms, resulting in detriment to the home-owner; and

b) that leasehold home-owners have little protection from unreasonable fees and unreasonable delays when buying, selling or improving their property.

2. Notes the UK Government's proposed ban on the sale of new-build leasehold properties in England.

3. Believes that the Welsh Government should take action to protect future home-owners by abolishing leasehold residential contracts in Wales.

Motion moved.

Thank you, Dirprwy Lywydd. I'm grateful to the many Members who have supported this debate today. The level of cross-party engagement reflects the growing public and media spotlight on an issue that affects every one of the estimated 200,000 leasehold property owners in every part of Wales. Our debate here today, the action already taken in Scotland, and the proposals recently floated by the UK Government suggest to me that this is a serious debate and that a first principles review of leasehold contracts is well overdue—around 10 centuries overdue, in fact.

Leasehold is a relic from the eleventh century, a time when land meant power, and unfortunately it still does. For today's landowner, leasehold means maximising income and retaining control of the land they own. But for the leaseholder it means the exact opposite: uncontrollable costs and a lack of control over what they can do to the property they own. When the Scottish Government legislated to abolish feudal tenure, they got the tone exactly right. Like many Members, I've received representations from constituents where the root cause is the inherent unfairness, complexity and outdated nature of leasehold contracts. Complaints about spiralling ground rents, people feeling trapped in their own home, and property values that plummet year on year as the remaining lease reduces are commonplace. 

Over the last few days, I ran a Facebook survey and I found that these headline issues are just the tip of an enormous and complex iceberg. One constituent told me that his lease was sold twice within a 12-month period, resulting in two separate demands for ground rent. He had to go to court to resolve the matter. Another told me that, after the lease company went bust, the new company increased the ground rent overnight by 100 per cent. A third said that when she tried to purchase her freehold, her landlord valued her lease at three times the value of her home. Others told of house sales lost as a result of leasehold complications, the need to get permission to undertake the most basic repairs, and incurring charges for maintenance despite none being undertaken. A number complained about the lack of information about leasehold at the point of sale, with one left feeling that he'd been mis-sold. In recent years, there's been an avalanche of press reports across the spectrum of leasehold-related horror stories.

There have, of course, been a number of leasehold reforms over the years, from restrictions on the rights of landlords to evict tenants in the 1920s, through to the 1960s and 1990s, which did bring new rights for tenants to extend leases. Leasehold reform groups and organisations working with the sector, such as the Conveyancing Association, have criticised the weakness of the Commonhold and Leasehold Reform Act 2002 for failing to offer leasehold home owners protection from unreasonable fees and delays in buying, selling or even improving their home. Legislation to date has not addressed the problem and it is remarkable how the issues that are so prevalent today existed 20, 40, 60 years ago. As one Welsh MP told Parliament:

'When leaseholders seek either to renew their lease, or to buy the freehold of their home, they are held to ransome. Leaseholders are completely defenceless before the ground landlord.'

'Because of the profitability of the leasehold system, finance corporations have bought out a great many ground landlords.'

That was a speech made to Parliament in 1961. Now, new problems are emerging. Some lenders are reported as refusing mortgages on leasehold properties, effectively making the houses worthless. House values are eroded because of increasing ground rents, tribunal costs and ground rents being sold as commodities on the financial markets. 

One constituent of mine was charged £140 as an assessment fee when he sought to buy out his lease. He was completely astounded to be told that his freehold would cost him a staggering £13,000. He employed a solicitor, at a further cost of £420, who then negotiated the fee down to £8,000. So, it is sensible then that the UK Government have committed to work with the Law Commission to support legal reform. The complexity of leasehold contracts with elements of contract and property law intertwined also puts a home owner at an immediate disadvantage in respect of ground rent disputes. Speaking in the House of Commons in November last year, one MP put it like this:

'Present-day "onerous ground rents" are, more likely than not, the resultant of unconscionable conduct carried out by one sector of society who have superior information...at the expense of an unsuspecting...part of society.'

In April last year, the all-party parliamentary group on leasehold reform called for leasehold houses to be banned and for an end to onerous ground rents. Then, in a written statement in December 2017, the Secretary of State, Sajid Javid, announced a package of measures to crack down on unfair leasehold practices in England, including legislation banning new leaseholds. He said:

'It’s clear that far too many new houses are being built and sold as leaseholds, exploiting homebuyers with unfair agreements and spiralling ground rents. Enough is enough. These practices are unjust, unnecessary and need to stop.'

So, these too are encouraging words, but, so far, there is no sign of any UK Government legislation. A private Member's Bill due for its second reading in Westminster next month, however, will propose further regulatory reform.

In Wales, Welsh Labour's 2017 manifesto made our intentions clear and signalled that Labour is ready to introduce protection for existing leaseholders, saying:

'We will back those who own their homes, including...leaseholders...who are currently unprotected from rises in ground rents.... A Labour Government will give leaseholders security from rip-off ground rents and end the routine use of leasehold houses in new developments.'

So, I welcome the Welsh Government's 2012 'Homes for Wales' White Paper, which commits to working with the Leasehold Advisory Service to gather evidence on the scale, volume and nature of leasehold problems to inform further action. I'd be grateful if the Minister could outline what action is proposed as a result, and what further action might be considered as a result of this debate. 

A ban on new-build leasehold houses is an obvious and necessary first step. In 2016, leasehold transactions accounted for 22 per cent of all transactions of new-build properties in Wales, and I do recognise the distinction between new-build homes and issues relating to apartments and flats, which is a far more complex issue, but one where there are still significant issues with regard to commonhold and leasehold.

Responding to a Westminster Hall debate in December 2017, the then Minister for housing, Alok Sharma MP, noted that

'whether Wales abolishes leasehold is a devolved matter'.

So, unlike in the eleventh century, our society values home ownership—it has been positively encouraged by Governments of all colours. We all understand that this is something that most people aspire to. So, the existence, re-emergence and growth of leasehold tenure is, in my view, a scourge on society. It is an embarrassment that this feudal landowner exploitation of home owners continues to exist, and it has to be brought to an end.

So, I call for three things: urgent temporary steps to restrict new leasehold builds within Wales, I call for the Welsh Government to introduce urgent legislation to permanently ban any further house building based on leasehold tenure, and I call for an inquiry into all types of existing leasehold tenures, with a view to legal reform to enable this complex and iniquitous system to be brought to a just end. Thank you.  

I'm delighted to support this debate. Land Registry figures show that leaseholds made up 43 per cent of all new-build registrations in England and Wales in 2015, compared to just 22 per cent in 1996. We know that Wales has around 200,000 leasehold homes, with specific hotspots where there are significant levels of new builds being sold under leasehold contracts. Indeed, in 2016, in my own constituency of Aberconwy, we had the highest proportion of new-build leasehold house transactions as a proportion of all new-build house sales at 77 per cent, accounting for 48—that's 48—of the 62 new-build houses sold in 2016. Furthermore, 11.5 per cent—again, now the highest in Wales—of all houses sold in Aberconwy in 2016 were leasehold, alongside 27 per cent of all property transactions. So, it's actually the fourth highest. 

Now, of course, leasehold ownership can sense when it's used for individual flats in larger developments. However, we have concern that far too many new houses are now being built and sold in this way, often without a clear explanation of the implications and costs for the buyer. And I have to tell you that it was quite a scandal when it emerged in Aberconwy. There was a newspaper story and people were approaching me. They did not know that they actually had a leasehold on their property, and some of them were offered to buy them at £3,000, but even then they were only buying the freehold on their property; the land wasn't included in the actual transaction. So, there are several facets to this. 

This potential exploitation—and that's what it is—can see home buyers lumbered with unfair agreements and spiralling ground rents. I know if I was buying property, I would want to know that if I was buying it I owned the land that it stood on, I owned the property and that it was freehold—it was mine. To actually go into a transaction, go through the legal process, go through all the local searches and everything, and then to find out years later in some instances that you don't own the—[Interruption.] Yes.

Thank you for taking the intervention. Do you therefore agree that it's incumbent upon the solicitors who are acting, usually nominated by a developer, to actually ensure that the purchaser is fully aware of the consequences of leasehold? 

And you've just said it there now: the solicitors often are, if you like—. People are encouraged when buying a property to use a particular solicitor, so it sees our own local solicitors in the area out of the equation, if they are a large developer. And I think it is incumbent in any legal transaction, in conveyancing of any kind—I do believe that it should be that people do not go in where they are blindsided with not knowing that they're not buying the actual freehold. 

The potential exploitation sees home buyers lumbered with unfair agreements and spiralling ground rents. Direct Line for Business research in 2016 suggested that the average annual ground rent was £371 for new builds and £327 for older properties. And as I say, when it comes to buying the leasehold, these people were given a very short window of time in which to buy their freehold, and once that time went they were warned that they could escalate. What a worry that is to someone when they've bought what they believe to be their own home. 

These practices are unjust, unnecessary and need to stop, and I was really thrilled when the Secretary of State for Housing, Communities and Local Government, Sajid Javid, previously announced new measures to put a stop to unfair practices, and at that time I did actually approach our late colleague, Carl Sargeant AM. And I know that he was very keen and he said he would come back to me. Sadly, he has been unable to. But he was definitely going to look into this and bring about some kind of solution. 

Recent figures from the Leasehold Advisory Service show that 57 per cent of UK leaseholders generally regret purchasing a property in that way, and therefore these moves by the Conservative Government in Westminster to ban the sale of new-build leasehold properties, cut down on abuses of leasehold and ensure better protection for renters and home buyers are very welcome. So, all I would say is: let's go forward and let's do the same here in Wales. Our people when buying property, our Welsh householders, deserve every protection that is available across the UK. Thank you. 

Thank you. Lynne Neagle. 

Thank you, Deputy Presiding Officer, for the opportunity to contribute to this debate. This is an important issue and I'm very pleased that we're getting the opportunity to discuss it today. Although the motion today talks about new-build properties, I wanted to raise the issue of leaseholders who have brought former council or social housing properties, and then faced very large bills to bring them up to standard. I have seen how much stress these bills can cause, especially as some of the bills in my constituency have been very large indeed—some as high as £26,000. 

It is of course absolutely right following housing stock transfer that Bron Afon Community Housing, the main social landlord in my constituency, should have worked hard to bring the whole housing stock up to the Welsh housing quality standard. However, we also have to recognise that they inherited a housing stock that had a very significant backlog of repairs due to the borrowing constraints placed on local authorities with council housing for many years.

I've raised concerns about leaseholders with successive housing Ministers going back over many years, and I'm particularly grateful to Lesley Griffiths for the interest and concern she's shown over this issue and her willingness to listen to my constituents about the impact such large bills were having on them. I well remember one constituent telling me and telling Lesley that it had reached a point where she dreaded getting another envelope from her social landlord for fear it was going to contain another large bill.

Now, of course there are challenges in tackling this issue of large bills for leaseholders, and there is a powerful argument that tenants should not be placed in a position where they have to subsidise works on the homes of those who have been able to buy their own home, but I do believe we have to do more to tackle this issue. In England, they passed something called Florrie's law, which places a cap on the level of charge that could be levied on local authority leaseholders, and this is something that I've raised with Ministers here. 

Another suggestion I've made is that Ministers legislate to create a mandatory reserve fund that all leaseholders have to pay into in order to spread the cost of large repairs over time. So, like Mick Antoniw, I very much look forward to the Welsh Government coming forward with proposals to tackle the challenges facing leaseholders. I was very pleased a couple of years ago to be asked by Welsh Government to launch the new guides they'd produced in partnership with the Leasehold Advisory Service. These were guides that were designed to make sure that leaseholders facing major works were fully aware of their rights and entitlement. But as Mick Antoniw has said, there is also, I think, a very pressing need to make sure that people have information before going into a situation where they become a leaseholder, and that is very much missing at the moment. I'm yet to meet a constituent of mine faced with one of these bills who actually understood what they were signing up for when they bought the property. So, I would suggest that one very easy win for the Welsh Government going forward is to try and make sure that everybody who is about to sign up to a leasehold arrangement is very clear what that will mean for them in the future, and I hope that that is something—as well as the other measures that have been mentioned—that the Welsh Government can look at going forward. Thank you.

Thank you. Siân Gwenllian. 

Thank you very much. Thank you for bringing this issue to the Assembly's attention. I'm very pleased to be able to participate in this debate. At the outset, I want to refer to one example—just one example but one that's quite complex and demonstrates the problems in this area, and one I'm very familiar with in my constituency. I want to mention a block of flats built for people over the age of 55, which were sold with leaseholds attached. Most of those who purchased those flats are now in their 80s and 90s. At the outset, a residents' association was established in the flats, but as the residents grow older nobody now takes responsibility for being on the committee, and this association that used to work for the benefit of the residents has now lapsed.

Some four years ago, the lease was sold to a company located a long way from my constituency. The company is based in the Channel Islands, and they now own the lease on the flats. This company has two levels of management and it's very difficult to communicate with them. The costs for the residents have increased swiftly. The outside of the flats were redecorated at a cost of £100,000. The work was of a poor standard and the roof is leaking in one of the flats. The company that holds the lease—that's the company in the Channel Islands and their agent—makes all of the decisions, and, of course, it's the residents who have to pay the bills. Any attempt to challenge the decisions has to be made by individuals because the residents' association came to an end. I don't need to tell you that their efforts aren't getting much success.

That's just one example of how leaseholds can create great anguish, and this trend for more and more developers to sell homes on leasehold is an increasing cause for concern. Some purchasers do get 999-year-long leaseholds—a very long time, one would think, which possibly may actually alleviate some of the anxiety at the beginning of the process—but discover later that buying the freehold is exceptionally expensive.

One trap for these buyers is the increase in ground rent, which is hidden in the small print of these long leasehold contracts. At the outset, it looks affordable and the contract says that the ground rent will double every 10 years. That can look innocuous, after all most people move house every seven to 10 years or so. But for the company buying the leasehold, the income is very valuable and doubling something every 10 years very soon makes it profitable, and before long it’s impossible for the residents to afford the ground rent, and therefore it’s virtually impossible to sell the home, with solicitors warning prospective buyers to stay away. So, young people, after years of paying rent, at last buy a house and then find themselves still, in reality, being tenants, because that’s what a leaseholder is ultimately, with all the disbenefits attached to that.

I’m going to use this debate to draw attention to just a few other problems that have emerged in terms of newer housing developments—I hope you’ll forgive me for doing so, and to stray a little off topic, but they are certainly related. Recently, the cross-party parliamentary group on excellence in the built environment—which is a long and complex title—published a report on the quality of housing that were new builds across the UK. This report discovered that 93 per cent of buyers mentioned problems to the construction companies, and of those, 35 per cent mentioned 11 or more problems. These are problems that the buyers have to pay to put right—a matter for our consideration in the same context, therefore.

Another problem is the number of housing estates the length and breadth of Wales that are unfinished. What happens very often is that a developer will take more than a decade from when the first house is sold to the time when the final house is sold and completed. In the meantime, residents face problems with rubbish collections, no social facilities available and so on, and as we will see in a debate that’s to take place next week, roads remaining unadopted. This is all before you start to think about other related issues, such as land banking, for example, where there is no intention at all to bring a project to conclusion, and also a lack of community infrastructure for these new developments.

So, there are a number of related problems there, and as far as I can see, there is a fundamental problem that we’re facing here: since the financial crash 10 years ago, fewer companies are involved in the market and they are larger companies and therefore there is less competition. This, ultimately, is damaging for house owners and gives unfair advantages to these large companies when it comes to the matter of funding new developments, getting planning permission, public procurement, and so on.

Therefore, I would encourage the Welsh Government to consider these issues too when you are seeking ways of dealing with the issue of leaseholds, because it is part of a wider range of problems emerging from less competition in the house-building sector. Thank you.

I think we'll find the same message being sent across the Chamber this afternoon from Members representing constituents across Wales, because we all have similar problems. As we all know, leasehold is a form of residential tenure that, perhaps, comes back to the feudal ages, where land was seen to be the place and those who owned the land were the dominant ones, but it has actually been abolished in most places around the world and perhaps it's now time to end it here in Wales as well.

It started out as an anomaly in the north-west of England and it seemed to spread across the whole of the UK, selling houses as leaseholds. Now, let's—[Inaudible.]—leaseholds. Leaseholds actually cover more than one area. We talk about houses sometimes, but don't forget flats, and we've got new houses and we've got existing houses. So, there are combinations of leasehold, which really add to the complexities that arise. I'll talk about all three in a second.

Now, to those who say a leasehold house is sold at a lower price than the freehold house, because that's what they would sell it as, that's been shown to be incorrect. It actually appears to be simply a way of exploiting the home buyer—to actually get somebody to think that accepting a leasehold was a normal way of buying a home these days. It's not, and it wasn't.

On occasions, the details and the consequences of the contracts they went into were never fully explained to them. And, again, that is crucial. It's very often because the developers would sell to the person—. I've been there, with my family and my children, to these houses and they say, 'We've got the solicitors. They know how we work. It's easy for them to do it.' Of course, then they encourage you to use their solicitors because they have the contacts, but they don't tell you what the nitty gritty is behind the detail, and that's the problem.

So, whilst they may present it as a cheaper option, it's not clear to the leaseholder what additional medium and long-term costs they will incur as a consequence. There are some leases that have terms that become increasingly onerous. I think Siân Gwenllian highlighted it, what is known as the Taylor Wimpey approach—the 10-year doubling costs—and that is frightening, because sometimes there are 250-year leases and you're talking about 25 doublings. It'll be huge. It is something we need to address here in Wales.

So, what can the Welsh Government do for other things? For new builds there are two things: ban it; stop it. But also, the Help to Buy schemes: don't help to buy leasehold properties. Make sure that developers know that if they want to encourage people to buy the properties with Welsh Government funding, you are saying, 'On the basis only if it's freehold, not leasehold.' Easy, quick win. So, that's one aspect. Obviously, on developments, don't let it happen; ban it outright for new properties.

But then that leaves the problem of the existing properties. What are we doing? Because I have tenants—. We've been very good today; we haven't named companies. I'll name them. Barratt in my constituency—very highly popular, doing a lot of leasehold properties and selling new properties as leasehold. Persimmon is another one. I've also got—. You'll remember. The Member for Llanelli will be interested in Trinity Estates. That's another one that runs a management company running flats in my area. It runs them in Llanelli as well. These are companies that are passing on the leasehold to third parties without the leaseholder knowing. They don't tell the leaseholder they're passing it on. It goes on once, twice, three times before somebody actually finds out now who owns the leasehold. Consequently, the charges are going up. The flats in Jersey Quay in my constituency, which are managed by the company—I've just forgotten the name of it.

In Trinity Estates, those owners actually have problems. They have to give a percentage of the selling price, if they try to sell the flat, to the management company. The management company can just take money out of their accounts for service charges, without giving them notification. They have increased their service charges by 33 per cent over the last 12 months. This is totally unacceptable to people. They can't sell their houses, as you said, which means people going into the properties can't move on. They're stuck. They can't progress. They can't even get jobs differently. They can't go anywhere. So, you are tying people into a situation that they can't get out of. We must support these families, these young people. Most of them are first-time buyers. We must help them so that they can become socially mobile, they can increase their lives, they can improve.

It's about time that the developers were held to account, it's about time the management companies were held to account, and it's about time the Government actually now did something that it promised to do. I understand that the Wales Act might muddy the waters a little bit because it's changing from, 'Property is reserved, housing isn't', but this is housing. It's the ultimate housing issue—come with a little umbrella. So, I'm pretty sure you can do it.

So, Minister, I would like you to actually stop this process. Stop our constituents being trapped in a situation that they can't get out of and ensure that they're not being—I'll use the word—fleeced by management companies, so that they can actually not just simply afford their mortgages, but afford to live. Because we have situations where a £500 fee is taken out a month. Well, that's someone's mortgage gone. Just gone. They can't pay the mortgage because they've just had that money taken away for the service charge. It's got to stop. We've got to make sure people are protected. We've got to make sure that the residents, the tenants and the leaseholders are protected, not the management companies.

Thanks to Mick Antoniw and the other sponsors of today's debate. The issue of leaseholds and freeholds is not a new one in Wales. I'm not going to attempt to go all the way back to the eleventh century, as Mick did, but we did have a well-publicised situation during the 1950s when a large number of miners' homes in the south Wales Valleys had leases that the occupiers weren't able to purchase. At that point, one company, Western Ground Rent, held some 10,000 leases, and there were attempts to reform that situation in Parliament at the time, led by someone who was later my local MP, George Thomas. Now, whatever reputation George Thomas has these days, he was involved in at least one useful campaign, which was the campaign to reform leaseholds in Wales during the 1950s and 1960s. 

As we've heard in today's debate, though, there is evidence that leaseholds are still very much with us. As Mick Antoniw stated in his opening remarks, it's estimated that there are some 200,000 leasehold homes in Wales, and there is the disturbing aspect that a significant number of new-build developments are being offered to house buyers coming into the market as leasehold. 

One point that Mick made was that he acknowledged that there was a difference between leasehold flats and leasehold houses, and some would argue that there may be a case for flats being leasehold, as they clearly have communal areas and will also offer communal services. But, then again, the leaseholders are paying service charges for these facilities, so why should they be impeded from each owning their own freehold? In the case of leasehold houses, though, it is even odder that house builders are trying to fob buyers off with leasehold arrangements. In these instances there are no communal areas, there are no service charges, generally, so there is even less justification for not offering the freehold. 

In recent years there have been whole new developments that have gone up in which all the houses on offer were leasehold, and Dai Rees began to mention the names of some of the companies that have developed those arrangements. I noted today that, currently, on Darlows' website, there are no fewer than 185 leasehold properties on offer in Cardiff alone.

A significant problem is that many first-time buyers lack financial education of the sort that is needed when they enter the world of property purchasing. This is something of a failing of the education system, which is sometimes too academic in nature and offers not enough of practical relevance to school students. We do need to give young people some meaningful financial education to prepare them for entering the world of property, although that debate is perhaps for another day. 

To return to the point at issue today, first-time buyers, desperate to get onto the housing ladder and knowing little, often buy a house, many of them not even understanding the difference between leasehold and freehold. Then, when they come to sell the house, they find that there is a significant difference between their market price and the market price of neighbouring houses in which the householders do own the freehold. For instance, one of my constituents, who lives in the Cynon valley, eventually sold her house for £110,000 because she was only a leaseholder, whereas other properties in the same street were going for £140,000. That is a significant loss, and that individual did not realise when she bought her property what a leasehold even was. So, this is one part of the problem we are dealing with.

Dai Rees made the point that, in these cases, we should try to do something to ensure that the legal advice that prospective house buyers are getting from solicitors does actually explain these differences between leasehold and freehold. But, of course, we've had a series of financial packages offered over the years in which false advice has been given, so I fear that, unless there is some kind of meaningful regulation, we can't really rely on regulation to ensure advice that is given from solicitors. So, I believe there are many problems associated with leaseholds; legislation could well be the only way forward. The legal competence issue, which Dai Rees also raised, is a possible problem, so I'm interested to hear what the Minister says about that today, and how she clarifies that. But UKIP supports the principles behind this motion, that house buyers should not be ripped off, and is happy therefore to support today's motion. Diolch yn fawr iawn.

I'm very glad to support and take part in this debate addressing an issue that has been raised by, and is affecting, my constituents in the Vale of Glamorgan. As part of the regeneration of Barry, 3,500 houses are being built on the waterfont, with substantial levels of support for home buyers, which I welcome, from the Welsh Government's Help to Buy scheme. In fact, Dai Rees has drawn attention to this: new home buyers are getting Help to Buy, but they are for leasehold properties. Of course, the redevelopment of Barry is transformational and has my backing, but concerns have been raised with me about the use of leasehold by the developers who are building these homes. I did raise these concerns with the Minister, who responded to me to say that two of the developers, Taylor Wimpey and Barratt, have confirmed that they no longer sell properties as leasehold unless absolutely necessary. The third developer, Persimmon, has also confirmed that they no longer offer leasehold properties unless absolutely necessary. So, I'll be monitoring this and questioning the 'absolutely necessary' point in terms of scale and type of properties.

I was going to ask the question: did you get confirmation from them as to what 'absolutely necessary' means?

That is the point I'm following through and taking up. But it was important that I was able to raise that and get that response from the Minister. But I'm also aware that the Home Builders Federation has stated that they're working with their members to look at alternatives to leasehold, such as commonhold, using the right-to-manage legislation. I don't think that's been mentioned yet this afternoon. I also heard from the Minister that she'd like to see more right-to-manage companies being set up as they allow leaseholders to take control of the management of their buildings and free themselves from management companies that are not providing a professional and value-for-money service.

I'm also aware of not-for-profit management companies that are being set up. Indeed, we have some examples of those in my constituency, but, of course, they require considerable voluntary skill and voluntary management capacity.

I also understand, and I look forward to hearing from the Minister, that she's looking at the regulation of residential leasehold management companies as part of options for wider leasehold reform. But, as has been said, the Welsh Government is subsidising and supporting home buyers, particularly young home buyers, with Help to Buy, but there are disadvantages in the short and long-term leasehold arrangements being imposed on them. One of my constituents has said on behalf of her daughter in this position, 'There needs to be more information available about the hidden costs of leasehold to alert young buyers who are unaware of the pitfalls.'

Mick Antoniw spelt this out very clearly in bringing forth this debate, in his opening speech on the inherent unfairness and complexity of the leasehold system. He asked the Minister for clarification over when she'll be making an announcement on this important matter—in line with our manifesto—which is disadvantaging many households in Wales. Could Wales learn from Scotland and lead the way in leasehold reform?

Thank you very much. I now call on the Minister for Housing and Regeneration, Rebecca Evans.

Thank you, and I'm very grateful indeed to Members for bringing forward this cross-party debate today. As Mick Antoniw set out at the very start of the debate, leaseholders have a long history, but I think our debate today has really highlighted how, in recent years, an unscrupulous minority of developers and freeholders have sought to profit from questionable practices.

I think that the issues that have been discussed fall into three broad themes: the inappropriate sale of new homes as leasehold; the plight of people who have been sold homes on leasehold and are victims of poor practice; and the underlying question as to whether or not leasehold is actually still fit for purpose in the modern housing market.

This particular motion focuses on the first of these themes. Not all leasehold transactions are inappropriate, of course. Leasehold is a valid tenure for flats and apartments, for example, when it's operated fairly. It can ensure that communal areas and maintenance are dealt with on behalf of all the residents. And in the absence of a current suitable alternative, leasehold does have its place in our housing market, particularly given the increasing number of new homes that are flats and apartments. This is why point three of the motion is difficult for us, although I do obviously agree with the spirit of the motion.

Contributions today have again highlighted that there are those out there who will neither use leasehold appropriately or operate it fairly, and the concerns, really, are many, complex and varied, and we've heard so many examples of them today. All too often, I think that they do relate to leaseholders feeling that they've been misled or that they face excessive or escalating charges, and we also hear of difficulties when seeking to buy those freeholds, extend leases, and we hear of leaseholders feeling that they are receiving poor value for money or a poor service. So, I want to put on record today my commitment to exploring what can be done to address these issues, recognising the complexity and the technical nature of the issues.

But, turning to today's motion, we are all aware of the recent high-profile cases of new-build houses being offered on a leasehold rather than a freehold basis without any clear justification. The data shows that the proportion of new houses sold as leasehold has increased in recent years and I want to put an end to the inappropriate use of leasehold for new-build houses in Wales. There are a small number of sound reasons for houses to be sold on a leasehold basis, and these include the sale of new-build developments on land owned by certain bodies that have a long-term interest in land, such as university bodies or the National Trust, and that, specifically, is what we're talking about when we're talking about the phrase 'absolutely necessary'.

But, beyond this, I see little reason for houses not to be offered for sale on a freehold basis. I do recognise the need to act with urgency, and since coming into post I've identified a number of key improvements, which are to be taken forward immediately. I've already opened up discussions with developers in Wales through our house builders engagement programme and I've made it clear that it is my desire to limit the number of new properties that are sold as leasehold and that my preference is for leasehold to be limited to premises such as flats where the structure of the building and the need to ensure there is maintenance of common areas does necessitate it. I want all house builders operating in Wales to publicly pledge not to sell new-build houses as leasehold in Wales, except in those exceptional circumstances that have been mentioned, and Jane Hutt kindly named some of those developers who have already made that commitment. I'll be using the tools currently at my disposal—

Will you take an intervention, Minister? On that basis, will you also reassure that, the right to actually—if they decide to sell it on, even in those exceptional circumstances, if they decide to sell it on, the leaseholder has the first call on purchasing the freehold before they sell it to somebody else?

The leaseholder should always have the first opportunity to purchase that lease, but it is my concern that, often, the price of the leases are beyond what the leaseholder is able or the home owner is able to pay for that lease, and that's something that I would be looking to explore in the wider context of this debate.

But I am really keen to be using all of the tools currently at my disposal to reinforce my commitment to this agenda, so I will be shortly be announcing a package of measures through Help to Buy—Wales to this end and it is my intention to bring forward these measures quickly. The plans are at an advanced stage, and I look forward to sharing further detail on those soon, but they will respond to some of the issues and concerns that we've heard during the debate.

Early engagement with house builders on these proposals has been very positive and I am confident that we can work with the industry in Wales on this. Secondly, I also want to improve awareness of what it means to hold a lease, and this responds to one of the key concerns that was raised by Lynne Neagle, along with Jane Hutt and Gareth Bennett, during the course of the debate. In those cases where it is right for a property to be sold as leasehold, such as a flat, for example, it is absolutely vital for potential purchasers to be completely familiar with the terms of the lease and able to challenge anything disadvantageous in it at the outset. 

Will you take an intervention? Do you agree with me, though, that, although it may be a matter of engaging with UK Government in terms of what our devolved powers precisely are on that, the concept of commonhold is really the aim we should be heading towards—proper commonhold—and an absolute end towards the concept of leasehold, which is, essentially, a property owner's device?

Commonhold is a model that I've been looking at, and I've been trying to understand why commonhold hasn't taken off in the past, what have been the barriers to it succeeding previously, and what could be done differently in future as part of that wider context of how to improve leasehold and so on, and freehold, within this particular sector. 

I'll be developing awareness-raising materials and bespoke training to be made available to all of those involved in both buying and selling of property, and that includes leaseholders, estate agents, managing agents, conveyancers and freeholders, and I've already asked officials to set up a multidisciplinary task and finish group to expedite this piece of work. I also intend to put in place a voluntary code of practice to underpin these measures. This will help improve standards, promote best practice, and improve engagement between all parties. It will also set out clear expectations for leaseholders, freeholders and managing agents and will be of particular interest to those managing or living in homes where there is that need for joint management of communal areas and maintenance.

So, these are some of the things that I am taking forward right now, and I do believe that they will have an early and positive impact. But I do acknowledge that they are very much only part of the picture. So, I'm not shying away from the more fundamental issues around the future of leasehold as a tenure and alternatives that may be more appropriate in the modern housing market, such as commonhold, for example. Neither am I ruling out the possibility of legislation if working together with the industry fails to deliver the improvements in the practice that are so clearly needed. I will be measured and base my decisions on the solid evidence.

That is why I've tasked officials with commissioning research to understand the detail of some of the more complex issues around enfranchisement and the buying, selling and extension of leases as they specifically relate to Wales. I've asked them to engage with stakeholders as well, and this very much responds to that final ask that Mick Antoniw made in his speech at the start of the debate as well. It's also why I'm engaging with the Law Commission and their planned review in this area, and I think that will help answer some of those questions about competence. Because, of course, the answer often depends on the question that you ask in terms of competence, because so many of these areas do straddle areas of responsibility. But that piece of Law Commission work that we're engaging with I think will be particularly illuminating and useful.

I'm also keen to see what we can learn from other parts of the UK, including England, which faces similar challenges, but also keen to see what lessons we can draw from Scotland. Again, we've heard a little about the approach there, where they've taken a very different direction to tenure for properties with shared facilities. I do recognise, though, that even future legislative reform may offer little to those who feel that they have been unfairly treated in the past. This is why I've asked officials to work closely with LEASE to identify how existing leaseholders might be best supported. So, the measures I've spoken about here today and the further detail I'll be announcing very shortly can be delivered in the very short term without the need for legislation. That doesn't mean that I'm ruling out the need to consider future legislative options, but it does reflect my desire to act quickly where I can whilst we do that ground work on which to base any wider reforms.

Thank you. Can I call on David Melding to reply to the debate?

Thank you, Deputy Presiding Officer. Can I just say that serving in the fifth Assembly is a great honour? When I compare it to the fourth Assembly, two things stand out: (1) the Deputy Presiding Officer's got much better—[Interruption.] Yes, we're very lucky. But, secondly, the way these debates are being used has brought a new dimension and a new power to the backbenches. Using this individual debate to generate cross-party support for a real issue of great concern to the people we represent I think is just fantastic.

Can I start then with Mick Antoniw? And, just talking about how many leaseholders there are out there—200,000 at least—he said a review of this whole area is well overdue, because at its heart often lies profound unfairness, and, in very vivid historical terms, talked about the eleventh century and a property owners' charter. It was slightly imbalanced in that there are some uses for leasehold, but, generally, the way it's had a renaissance recently, it is really troubling. You did say that existing legislation, the 2002 leasehold reform Act, has not really stood the test of time in doing what really is now needed.

He called for (1) urgent temporary steps—and I think the Minister may have satisfied us a bit there—and then, second, legislation to ban leasehold in most cases—there are some communal living options, such as apartments and flats, that may still require leasehold—but to ban it, really, in most cases here and to have our own legislation, which I thought Jane Hutt, then, echoed at the end, saying, 'We should lead the way in reform'. Perhaps that's the big idea that you shouldn't rule out at this stage, Minister, and I'm pleased that you are going to talk to the Law Commission about this. 

Then Mick said that the practice for existing leaseholders needs to be examined. Again, I think the Minister did indicate that that's a real concern. So, I thought, in general, where you started is where the other Members then took us in more detail, and then the Minister broadly, I thought, did reply to most of the points.

Janet Finch-Saunders mentioned the action, or the intentions, that have been expressed by the UK Government, and there's this whole issue about how much power we have in terms of the Wales Act, but I think we should certainly seek to act quickly. We don't need to follow the UK Government, and the UK Government hasn't yet actually brought its own legislative proposals forward, although I hope to see them soon. Janet talked about this new phenomenon of leaseholds being used for new build, which was a central part of the debate. She also mentioned, when that happens, the lack of information for home buyers—often first-time buyers, perhaps young families, and not quite realising the implications of leasehold and what that would bring.

Lynne Neagle talked about a slightly different issue—which I think was hugely important, actually—those who have purchased social housing, or what was social housing in the past, and have a leasehold that has quite a strong obligation in terms of maintenance, and where these people are, then, when quite considerable maintenance charges are applied. I think we've all had casework where, often, blocks of flats have extensive exterior renovation, use of scaffolding, new windows and repair to roofs—very, very expensive. These people, I think, are often quite a vulnerable group, and you made some interesting suggestions there, which I'm sure the Minister heard, such as a cap on charges.

Siân Gwenllian then talked about retirement flats and what happens when your residents' association is simply not as active or winds up because you don't have the key people you need to take it on, and then the practices of some management companies to really use that property as a way of getting income out of people. I think that's a real, real concern that many of us have had and have seen the problems—that badly motivated maintenance companies have resulted in really quite a bad situation for those tenants.

David Rees then reminded us that this is not a common way of ordering land ownership around the world. We, unfortunately, seem to be stuck in a somewhat feudal practice. You did say—I thought this was interesting, because it's what I've heard as well—that there's no great price difference when you buy a new home on leasehold or freehold. I think that's really interesting, because I've even heard of a development in south-east Wales where the developer changed policy halfway through. The price of the houses didn't change, only those who brought early in the development now face additional charges to get their freehold of about £3,000 on average. Now, if you're a first-time buyer, a young family, suddenly facing a £3,000 bill just to get your freehold—I think there's a real, real problem.

Gareth Bennett talked about the 1950s and 1960s. You'll remember the discussions that were even later, back in the 1970s and 1980s, when leasehold reform had bedded in, but then there were still a few more problems coming forward. But it was a real issue in Wales in the 1950s, and it's now come back, so I think we owe it to our constituents to search out that best practice and establish it once and for all. And, again, you mentioned that first-time buyers were particularly vulnerable. 

Then, finally, Jane Hutt talked about the waterfront development in Barry. It's an important development and it's typical of some of the more exciting developments that have occurred in the last decade or two. There, Help to Buy has often been used even when there is leasehold tenure. David Rees said that's one thing perhaps we could change, and I think, actually, if we send that sort of signal you'd see the developers change their policy—the ones that have not signed up to your best practice yet would soon shift. That's a thing that we should be doing. 

And finally, I'd just like to finish with what Jane Hutt said—that Wales should lead the way, we should reform. We heard what the Minister said. I'm not quite sure everything can be done without legislation. I think we should do as much as possible quickly, but I do think there is probably going to be a need for legislation. Once we can assure ourselves that we have the competence under the new Wales Act, you clearly will have cross-party support to act, and to act quickly. Thank you very much, Deputy Presiding Officer. 

Thank you. The proposal is to agree the motion. Does any Member object? [Objection.] Therefore, we defer voting under this item until voting time. 

Voting deferred until voting time.