Item 6 on our agenda this afternoon is a debate on a Member's legislative proposal: leasehold residential houses. I call on Mick Antoniw to move the motion. Mick Antoniw.

Motion NDM6671 Mick Antoniw

Supported by Jane Hutt, Jenny Rathbone, Mike Hedges, Vikki Howells

To propose the National Assembly for Wales:

1. Notes a proposal for a Bill to:

a) abolish the building of leasehold residential houses in Wales; and

b) improve consumer awareness of the implications of leasehold tenure.

2. Notes that the purpose of the Bill would be to:

a) place a duty on local authorities in Wales to reject all planning applications for leasehold residential housing developments; and

b) place a duty on sales and management agents to provide potential purchasers of existing leasehold properties with information on the implications of leasehold contracts.

Motion moved.

I'm grateful for the opportunity today to introduce this Member's legislative proposal to abolish leasehold tenure for new residential houses. We have, of course, debated this issue on several occasions. On the last occasion, this Chamber held a very detailed, informed and passionate individual Members' debate on the problems arising from the renewed growth of leasehold housing and the associated consequences for tenants of the leasehold agreements that they were subject to. The motion we debated attracted cross-party support, and it was clear from Members' contributions that leasehold is a problem in every part of Wales. Since that debate, there has been a statement from the Minister. It does not rule out legislation, but focuses on voluntary agreement with a number of major developers not to build new leasehold housing.

Now, I very much welcome that statement, but make the argument today that we should go further, and we should put the issue beyond any future doubt by introducing a short and a simple piece of legislation that would prohibit, by law, any new leasehold houses being built in Wales. So, in order to explain my reasoning, it would be helpful to remind Members of the background to this issue. There are an estimated 200,000 leasehold properties in Wales. Leasehold is a relic from the eleventh century, a time when land meant power—and unfortunately it still does. For today's landowner, leasehold means maximising income and retaining control of the land they own, but for the leaseholder it means the exact opposite: uncontrollable costs and a lack of control over what they can do with the property that they own. So, when the Scottish Government legislated to abolish feudal tenure, they got the tone exactly right.

Like many Members, I have received representations from constituents where the root cause is the inherent unfairness, the complexity and outdated nature of leasehold contracts, complaints about spiralling ground rents, people feeling trapped in their own home, and property values that plummet year on year as the remaining lease reduces—and those are commonplace. When leaseholders seek either to renew their lease or to buy the freehold of their home, they are held to ransom. Leaseholders are completely defenceless before the ground landlord. And because of the profitability of the leasehold system, finance corporations have brought out a great many landlords, and as result, a person's home is no longer a rock on which their life is built, but a commodity to trade and speculate on. So, to me, it is totally sensible that the UK Government have committed to work with the Law Commission to support legal reform. The complexity of leasehold contracts, with elements of contract and property law intertwined, is such that it makes sense to await the Law Commission proposals, subsequent to the introduction of UK-wide legislation, to deal with all the retrospective consequences, which we do not, in any event, have the constitutional competence to deal with at the present time.

So, today's debate is about two things. Primarily, it is a proposal for the introduction of a simple piece of Welsh legislation to prohibit any future building of leasehold houses. It does not relate to apartments or shared buildings; solely to new residential houses. Secondly, this proposal requires developers and selling agents to provide potential buyers of existing leasehold properties with relevant facts about leasehold tenure. [Interruption.] Yes, I will.

Just a matter of clarity: you said it wouldn't apply to shared buildings, but it would to residential houses. How would you address the issue of flying freeholds?

How would I address the issue of—?

Flying freeholds, where you have different people living in their own homes, but within buildings that overlap other buildings. Therefore, flying freeholds compromise their ability to address repairs.

I think any property that involves a shared ownership of different parties of the freehold will be excluded. This solely relates to single-ownership new housing.

We all know that buying a property is the most significant financial decision most people will make, so it is vital that prospective purchasers understand the full implications and consequences of buying a leasehold property. So, in April last year, the all-party parliamentary group on leasehold reform called for leasehold houses to be banned, and for an end to onerous ground rents. And then, in a written statement in December 2017, the Secretary of State, Sajid Javid, announced a package of measures to crack down on unfair leasehold practices in England, including legislation banning new leaseholds. He said that

'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, those are encouraging words. In Welsh Labour's 2017 manifesto, we also made our position clear that we will back those who own their homes, including leaseholders who are currently unprotected from rises in ground rents:

'A Labour Government will give leaseholders security from rip-off ground rents and end the routine use of leasehold houses in new developments.'

In 2016, leasehold transactions accounted for 22 per cent of transactions of new-build properties. Responding again in a Westminster debate, the Minister for housing then noted that

'whether Wales abolishes leasehold is a devolved matter.'

So, the power is in our hands. We have a Labour manifesto commitment to legislate, we have a Welsh Labour Government, we have general cross-party support for abolition, and whilst we cannot prevent every leasehold horror story that our constituents have to endure, we do have the competence to at least stop the problem going any larger. We have the ability to bring an end once and for all to any future uncertainty regarding leasehold houses. We can send a clear message to all developers and landowners, present and future, that leasehold tenure is no longer an acceptable housing option in Wales. We can lead the way on this issue, and also send a message to the rest of the UK—to property developers, to landowners, to all those foreign-owned companies who are considering investing in property in Wales and the UK—that leasehold for housing is a relic of the past, and by passing a simple piece of legislation, we can confine it to the dustbins of history.

Thank you. Can I just remind all speakers now that it is a legislative proposal debate? Therefore, the time limit for speakers is three minutes. Siân Gwenllian.

Thank you very much. Fifty-seven per cent of leaseholders regret that they've bought leasehold properties, and this is far too high a figure, and is unacceptable, of course. These issues of concern include the burdensome rent issues that turn to be unaffordable and can make it very difficult to sell on the property, and other payments for consent to adapt the property, and permission to sell, can add to costs.

In remembering the complexity of the system and individual leasehold transactions, many leaseholders will have been entirely reliant on their legal adviser for any concerns before buying property, and it's possible that some leaseholders—possibly very many of them—didn't realise exactly what they were signing up to. Therefore, the intention in the Bill to place a duty on agents to provide information about the implications of leasehold is very valuable and something I agree entirely with.

The Research Service at the Assembly has carried out an analysis of the data of the Land Registry, and has noted that Wales has certain areas where there are many new homes being sold on leasehold. Many of those areas are in north Wales, with Aberconwy, Clwyd west, Wrexham and Delyn at the top of the table in terms of the number of properties sold as leaseholds. The new Bill would, of course, mean that planning applications for new housing under leasehold would be rejected, and that is something that I am supportive of.

There could be exceptional circumstances, of course. I can't personally think of any such circumstances where new leasehold homes should be allowed, but that is something that should be given consideration as scrutiny is undertaken on the Bill, in case there are some unintended consequences as a result of that. But with that word of warning, I congratulate you on bringing this issue forward, and I look forward to seeing the Bill proceed.

I wanted to also mention some examples of the difficulties that homeowners are facing in Wales, because in my own constituency of Newport East I recently met with a delegation from a prestige riverside housing development, where there are 81 leaseholders who, shortly after purchasing, found that their ground rents would double every 10 years, which wasn't brought to their attention when they made the purchases of the leases, and that the freehold will subsequently be sold on to a different company to the developer. It was only when, really, these issues came to national UK prominence and the UK Government took steps to address them that they became aware of the full scale of the problems, and just what a scandal these matters constitute. The developer then introduced a voluntary scheme to deal with the ground rent issue so that it will no longer double every 10 years, but it will, in fact, be increased in line with the retail price index, but that doesn't apply to those who bought from the company that the freeholds had been sold on to. So, there are now some leaseholders who will have their ground rent doubled every 10 years, and others whose ground rent will go up in line with the retail price index. They feel very strongly, all of them, no matter what position they're in, that these sharp practices need to be addressed and prevented in the future. There is a question, of course, in terms of what can be prevented, but also what can be done for people who are currently in that position, and I'm very pleased that Welsh Government is working with UK Government on the generality of these issues to take forward necessary reform, which hopefully will apply in Wales to our particular circumstances as well as in England. So, I think it's really important that Welsh Government continues to look at these issues in close co-operation with UK Government, but also that we support this Member's legislative proposal, which will deal clearly with one aspect of the problems for the future.

Thanks to Mick Antoniw for bringing today's debate. We are covering a lot of similar areas to what we covered in the individual Member's debate, which Mick was also involved in, with other people, so I won't reiterate everything I said then—most of the points are still valid. In UKIP we broadly agree with the principle of severely restricting leasehold tenure in future new builds, which is what Mick is trying to achieve, and this is a very real issue. We did have reform of leaseholds in Wales during the 1950s, but we know that leaseholds are now creeping back in. Mick quoted the figure of 200,000 leasehold homes in Wales, so we agree that this is an issue and it would be good if we could address it meaningfully. I know that the Welsh Government has considered this and there is some action that is coming, so it will be interesting to hear what they say today.

To return to material considerations arising from this problem, John Griffiths mentioned rising ground rents. There's also a problem of significant differences in valuations of houses when they go onto the market, if there are differences with somebody owning a freehold and someone else next door owning a leasehold. To illustrate that, I have a constituent in the Cynon Valley who 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, which is a significant loss. That individual didn't realise when she bought her property what a leasehold even was, so that does raise also the related issue of financial education and helping to ensure people actually know what they're entering into when they sign up to these mortgages in the first place.

To conclude, we support the principles behind this motion, which we will happily support today. Diolch yn fawr iawn.

I'm glad to support Mick Antoniw's legislative proposal. It addresses an issue that I spoke about in the individual Member's debate, affecting my constituents in the Vale of Glamorgan, with 3,500 new houses at the Quays waterfront area of Barry built by a consortium, Taylor Wimpey, Barratt and Persimmon. At that time I drew attention to the fact that the Welsh Government's Help to Buy scheme had supported a large percentage of new buyers in this highly desirable location, linking the town with Barry Island via a new road—an important development for the town of Barry. But concerns were raised with me about the use of leasehold by the developers, and I raised these concerns with the Minister earlier this year. I made the point in January that we're subsidising supporting homebuyers with Help to Buy with public funding, and thereby intervening in the housing market for the benefit of developers and, indeed, for the homebuyers. But they can be disadvantaged in the short and long term by leasehold arrangements imposed on them in new developments, so I was very glad to acknowledge the Minister's announcement on 6 March. That package of measures, which actually she launched in Barry, on a visit to the Quays, where she met with the developers—for houses and flats that qualify for support under Help to Buy, she did include this new package including new criteria that will require a developer to present a genuine reason for a house to be marketed as leasehold as well as a number of important measures.

I hope the Cabinet Secretary can update us on developments, because in terms of work with the Home Builders Federation, they are working at alternatives to leasehold, such as commonhold, using the right-to-manage legislation. But we have heard again today compelling evidence of failures, of profit-making management companies leaving residents vulnerable and living in unacceptable conditions. So, although there will be leasehold reform needed, in particular in relation to flats and shared property homes, I do support Mick Antoniw in his call for a made-in-Wales legislative solution. We have the powers to prohibit new houses to be developed as leasehold. Wales could lead the way.

Can I call the Cabinet Secretary for Local Government and Public Services, Alun Davies?

Thank you very much, Deputy Presiding Officer. Could I start, like other Members who've spoken this afternoon, by thanking Mick Antoniw for bringing forward this proposal? I think all of us who've listened to this short debate today have been quite taken with the level of agreement on all sides of the Chamber. I know that all Members have spoken from real personal and constituency experience on these matters, and were I standing here as a Member for Blaenau Gwent, I would also join in many of those conversations as well. I think it's very clear that not only are there those strong views across the Chamber, but that there is also, as I've noted, strong agreement across the Chamber as well.

I was very taken with Mick Antoniw's description of leasehold as a feudal relic and one that should be designated to history, and it's something that I have great sympathy for, I have to say. I don't have any disagreement with the Member for Pontypridd on these matters. And I know that he's discussed on a number of times with the Minister that these are very real issues for many thousands of people.

But we also know that leasehold is a tenure that does have some relevance where there are sites that include communal spaces and facilities, and I know that Members on all sides of the Chamber recognise that again this afternoon. But we also must agree that there appears to be very little justification for offering new-build houses as leasehold. It is also very clear that many people who have purchased a leasehold property were not fully aware of what leasehold really means and what their obligations and rights are as a consequence of that sort of contractual relationship. A Government-funded leasehold advisory service can help, and it has had over 30,000 visits to its website from clients in Wales in the last year or so. We have already acted to address some of these issues, and I'm grateful to the Member for the Vale of Glamorgan for recognising that and the Minister has already put a number of measures in place. The announcement made in March has already been described, and I hope Members will recognise that the Government is moving to take the actions that we're able to do.

We have removed support through Help to Buy—Wales to new leasehold houses and we are also ensuring that there is an undertaking from the five main developers in Wales that in future they will not offer leasehold new-build houses for sale, except where there are a few necessary exemptions. To ensure that these properties that are legitimately offered through Help to Buy—Wales on a leasehold basis offer a fair deal, new requirement for minimum lease length and restrictions to ground rent now apply to properties purchased through the scheme. Anyone buying a home can chose to use a Help to Buy—Wales accredited conveyancer and be assured that they have been trained to provide the advice that buyers need and require.

Deputy Presiding Officer, this is an extremely complex area of law and this is why the Welsh Government is working together with the United Kingdom Government to support a Law Commission project to simplify and improve leasehold enfranchisement and to reinvigorate commonhold as an alternative to leasehold. Since these matter require some careful consideration, I hope that Members across the Chamber will recognise that the Law Commission is ideally placed to lead this work. In addition to these measures, we are also bringing together a multidisciplinary group to advise on further non-legislative steps, including a code of practice to raise standards and to professionalise property management. The Minister will be issuing a written statement on these matters in the coming weeks. The Minister has also asked for research to be conducted to ascertain the scope and extent of issues with leasehold in Wales so that we'll be in a better position to take the right steps to address the real problems that are being experienced. And let me say this and be absolutely clear: the Government is absolutely clear that there are these real difficulties and we recognise the power of the argument that has been made this afternoon. 

So, in closing, Deputy Presiding Officer, I welcome Mick Antoniw's work to keep this important issue high on the political agenda, and I would like to assure him that the Government has certainly not ruled out future legislation in this area. The planning Minister, of course, the Cabinet Secretary for environment, is in her place and has also listened to this debate this afternoon, and she understands and recognises the issues around the planning system and the planning structures that your legislation seeks to address. 

Without a detailed proposal, we are unable to commit the Government this afternoon to a motion that has been brought forward here, so I will be asking Ministers to abstain on this, but in doing so I will also be giving a very clear undertaking on the record, Deputy Presiding Officer, that we will continue to have a conversation with the Member for Pontypridd and other Members who have raised issues this afternoon to ensure that we are in a position to ensure that we do have the structures in place—legislative if necessary, non-legislative certainly—to ensure that people seeking a home will have protections in place.

Thank you very much. Can I now call on Mick Antoniw to reply to the debate?

Can I firstly thank all those who spoke in the debate and the inevitable list that we all have of horror stories of the existing system? Can I also very much thank the Cabinet Secretary for the commitment he's made, which I think has moved further on to at least beginning to look at the reality of a possible piece of legislation? Much of what the Cabinet Secretary said I very much agree with, but it is dealing with the issue of the Law Commission and all the retrospective issues. The point about this particular recommendation in respect of legislation is that it is saying that we can actually send not only a clear principled message out, we can clear the decks, we can use the powers that we have for a very simple piece of legislation, which is very focused, that basically says, 'Enough is enough—there will be no more leasehold in respect of new-house ownership.' 

The reason why we should use that power is because—I'll be blunt about it—the commitments we have from the house building organisations are, to be honest, not really worth the paper they're written on. In four or five years' time, if the needs of the profitability of those companies can be increased by having leasehold tenure, then that's what will happen. These are companies. We live in a capitalist society, unfortunately. We live in a capitalist society and the purpose of these companies is to maximise profits. So, we need to ensure that these issues—whether they be land backing, accumulation of land, advanced planning, which these companies do, over 10, 20, 30 years ahead—we are expunging, we are removing the possibility of further leaseholds coming back to haunt us in the future. It gives us complete principled clarity and it is an example of where we can use our powers for the benefit of our people for future generations. Isn't that what the future generations Act was about? It's about taking action, it's about doing things that actually protect future generations. And a simple, short piece of legislation like this would make a significant contribution to establishing that principle and that clarity and would show that this Assembly has powers and uses its powers for the benefit of the people of Wales.

Thank you. The proposal is to note the proposal. Does any Member object? No. Therefore, the motion is agreed in accordance with Standing Order 12.36.

Motion agreed in accordance with Standing Order 12.36.