3. Will the Cabinet Secretary make a statement on the Welsh Government’s leasehold contract agreement with five major home builders? 152

Yes. Help to Buy—Wales is issuing new contract variations to all house builders using the scheme, not just the largest five. These new terms will limit the use of Help to Buy—Wales for houses on leasehold to exceptional circumstances. It will also ensure the leasehold terms for any Help to Buy—Wales home, including flats, are fair. In addition to this, the five major house builders have agreed not to market any new-build homes in Wales as leasehold, unless under exceptional circumstances.

Llywydd, in the past year since the UK Government's announcement of a crackdown on unfair leasehold practices, we have seen this issue become a real focus as well in Wales. Can I welcome the Government's announcement this afternoon? I think it is definitely a good step in the right direction. However, I am concerned that this announcement doesn't come across as an amnesty or a pardon for those big housing companies who have been operating these feudal practices for the past 10 years or more. Unlike the UK Government's stance, your statement doesn't seem to provide any hope for the many people, often first-time buyers, who are already stuck in this exploitative system. And so, does the Minister agree that the Welsh Government needs to provide leaseholders with clear support on the various routes of redress available to them, alongside a wider internal review of the support and advice system that is available to leaseholders where current practices are set to continue?

Thank you very much for those questions, and I would say that the announcement that I have made this week is only the start of my ambitions for leasehold, and the start of the action that I intend to take in this area. You'll recall we had a really instructive and useful debate here in the Chamber at the end of January, and I gave an undertaking at that point to bring forward as many early actions as I could, and the announcements that I've made this week are very much being true to the commitment that I made then, but this is just the start.

I do reiterate that I'm not ruling out the possibility of future legislation. I recognise that legislation may very well be needed in order to resolve the wider issues and to make leasehold, or an alternative tenure, fit for the modern housing market. In order to set out our way forward, we're engaging with the Law Commission's project, which is looking at this issue, and once we have the benefit of the Law Commission's report and our own research, which I've also commissioned into this issue, I'll be able to set out the next steps. But, in the meantime, I will be looking to use all of the avenues at our disposal.

I will say that, in terms of assisting people who are currently subject to those agreements that they've made through the leasehold contracts that they have, I'm very much aware of those problems. I think all of us, almost daily at the moment—I certainly do, anyway—have daily contact with people who are experiencing current problems. Some people think that they were badly advised or not advised at all about what leasehold means for them, and they should seek redress through the established means that already exist.

Disputes relating to the cost of buying freehold, increases in ground rent and service charges—those are things that we all hear about regularly—can all be referred to the leasehold valuation tribunal for resolution, and the leasehold advisory service is very well-placed also to assist leaseholders and help with the task of reforming leasehold tenure in the round as well. LEASE has been established for 20 years. They give free legal advice to leaseholders, landlords, professional advisers, managers and others on the law affecting residential leasehold in England and Wales, and they should be the first point of contact for people who do have concerns in this area.

But as I say, the announcement this week was a first step, and some early actions that I saw could be made fairly straightforwardly, following the discussions we had in January.

I'd like to thank David Melding for bringing this question forward because I think it would have merited having an oral statement from the Minister on this. But in your statement, you wrote that the five developers with which you have agreements would only build leasehold under circumstances judged by you to be absolutely necessary. I was wondering if you could clarify what you and these developers would define as absolutely necessary.

My second point only goes to reiterate what David Melding AM also said. Help to Buy is only one small part of the market, and we want to be assured that those who are already stuck in this particular circumstance will be given the same rights as those under the Help to Buy scheme.

The following point I wanted to make, emanating from what was said yesterday, I think, by Hefin David, was: I think it's a ticking time bomb in relation to the management fees that are imposed in relation to leaseholds. Many people have contacted me saying that they feel that there is a two-tier system in place, whereby they are paying management fees to do the same thing that they are paying their council tax to do, in relation to the management of gardens or the picking up of rubbish. So, I would wish for you to look at this, at a later date, as well as enhancing upon the statement that you've already made.

I thank you very much for those questions. Just to clarify, the exceptional circumstances that were referred to in the statement are highlighted in the Leasehold Reform Act 1967. So, they include things like land owned by the National Trust, the Crown, a local authority or within a cathedral precinct, and also includes land of a special architectural or historical interest where it's important to safeguard the land and the surroundings. So, in practice, what this means is that any application that comes through, requesting one of those exemptions to buy or to build a leasehold property through Help to Buy, will have to be raised with the Welsh Government, and then we will seek clarification on whether or not those exceptional circumstances are legitimate in our view. We'll seek that from the local authority.

Any developer registering a site through Help to Buy—Wales will be required to submit a pre-development plan, and that will be required to identify the proposed tenure and any reasons for leasehold. Again, we would have those discussions as to whether or not they fell under the Leasehold Reform Act 1967.

The Help to Buy scheme is only a small part of the housing market in Wales—you're right—which is why I'm very pleased that, through our house builder engagement programme, we were able to secure that agreement from those five major house builders in Wales that they'd no longer market homes as leasehold, and that applies to Help to Buy, but also to other marketed homes as well, which are new builds. So, I very much welcome that commitment.

You also raised the issue of management companies. Again, this is something that I'm interested in pursuing. I very much look forward to the debate we'll be having next week, I understand, proposed by Hefin David, into the relationships and the rights of people who own their house as a freehold property but within an estate and are subject to many of the same charges through those management companies as people who have leasehold properties. 

Thank you, Minister.