Contribution
My Lords, I congratulate the noble Baroness, Lady Pinnock, on this building safety Bill. I admire it for its hard-line radicalism in firmly establishing that, if a residential leasehold building has serious systemic defects, the leaseholder who did not design, build or sign off the works should not be the person who pays for the clean-up.
One proposed change that is quite radical, as we have heard, is the no minimum height or storey threshold. Although I tend to agree with both the Labour Government and the Tories before them that there are fewer fire safety issues in lower-level buildings, I would rather the law was less rigid about risk assessment than using the tape measure approach and fetishising 11 metres. I also appreciate that the Bill is aiming to expand protections for all leaseholders, when it comes to building safety and regardless of which storey their flat is on.
But I have one concern: could this backfire and share the miseries caused by the building safety regime downwards, even to ground-floor flats? This matters because of the unintended consequences of excessive risk-averse regulations. After the tragedy of Grenfell, there was a rush to caution that was understandable, but that then sometimes led to the law resulting in unnecessary work being commissioned under the banner of safety.
I tried to push back against the “remediation at all costs” mentality driving debates on the then Building Safety Bill. That well-intentioned legislation has created layers and layers of costly bureaucracy—think of Part 4— and has contributed to spiralling and exorbitant service charges and maintenance costs for buildings over 18 metres. This in turn has had a devastating impact on individual leaseholders and even the leasehold property market. According to Hamptons, 37% of England’s leasehold flats have service charges exceeding a threshold at which many mortgage lenders will not lend, leaving affected flats effectively unmortgageable, hard to insure and extremely difficult to sell. Do not let us make lower-storey leasehold flats fall into that sort of quagmire.
I appreciate that this Bill intends to move building safety away from service charge recovery towards a more punitive enforcement mechanism to make developers, construction, the supply chain et cetera pay, but all the time I was reading the Bill I kept considering that the real culprit here is leasehold itself. Indeed, leaseholders want to take responsibility for their own homes, but cannot. You have bought your home, and you assume that you will have control over ensuring it is safe, but then you discover that, due to some feudal legacy, you are a mere tenant in bondage to a landlord or freeholder, dependent on them to decide what actions are needed to keep you and your home safe.
What we really need to do is to end leasehold for good, but we have been talking about abolishing leasehold since the 1880s. The inherent draconian unfairness of the system has been accepted by Ministers from all parties and championed, indeed, so eloquently and frequently by our own Chief Whip—well, when he was in opposition. Abolition was then a totemic commitment of the Labour manifesto, and I was excited. But here we are, depending on the noble Baroness, Lady Pinnock, to pick up the rotten pieces of another Government reneged-on promise to end what, to be honest, is bleeding people dry and causing widespread misery for millions of householders.
The personal tragedies that this causes are documented very well by groups such as the Free Leaseholders campaign, and it is just shameful. We are reduced to trying to make ever greater numbers of organisations liable for flat safety to take the pressure off leaseholders. Even if this Bill delivers leaseholders better rights—certainly it does on paper—I am worried that its sweeping powers to make everyone else pay will create other regressive social consequences: for example, building owners swamped with information requests; or developers facing pipeline paralysis; or the floodgates being opened to multiple litigation disputes.
At a time when housebuilding numbers are so low—it is actually a crisis that we are not building enough houses—I would like the noble Baroness, Lady Pinnock, to respond on how she believes we can balance the warning from the law firm Devonshire that some of the sanctions in the Bill will
“grind construction to a halt, put a pause on ongoing work … until every deficit is rectified”.
Is not that just the sort of barrier to growth that we do not need when it comes to urgently needed housebuilding? The country needs that kind of growth to happen.
To finish, as the Bill covers conversions and refurbishments as well, it will not be just big construction but small building firms and contractors as well that could be in scope for blame, and that just worries me.