| Previous Section | Home Page |
Mr. Yeo : I shall certainly look into that.
Column 584
The effect of the proposals would be that if enough qualifying tenants in any of the categories that I mentioned are willing to enfranchise, the opportunity to do so will be widespread. Where four or fewer flats in a property have been converted from a house and where the landlord occupies one of those flats as his sole or main residence, that block will also be excluded. However, for the people who are excluded the next proposal is important, because it will extend leases on an individual basis. We have amended our original proposals to include this right because of our concern about how unenfranchisable leases might be treated in the property market following the opportunity to enfranchise being granted to many other leaseholders. The right to extend individual leases will ensure that leaseholders exclude from the other provisions can retain a saleable and mortgageable asset, an issue which will be of great interest to many of my hon. Friends' constituents.I stress that the right to lease extension will be confined to leaseholders excluded from the right to enfranchise in the categories that I have already mentioned. An extended lease will be granted for the unexpired portion of an existing lease, plus an additional 90 years at a peppercorn rent for the entire period. The price will be the market price of a new lease, including the income value to the landlord of the existing lease and the price that could reasonably be expected to be paid for granting a 90- year extension at a peppercorn rent. That price will also include a share of any marriage value lost to the landlord by granting a new lease. The process of settling the price will be the same as that for a lease enfranchisement. The issue of lease extension is much more complicated for flats than for houses. Our minds are not absolutely closed on every detail. We are still consulting on that aspect of our proposals and we are looking for comments before the end of May.
I mentioned briefly our proposals to amend the Leasehold Reform Act 1967. Most long leaseholders of houses have had the right under that Act to enfranchise, subject to their properties falling within certain rateable value limits. Those limits left many high-value houses--mostly in central London--excluded by the rateable value limits. My hon. Friend the Member for Westminster, North has made us aware of the problem that that restriction poses for his constituents. We now recognise that introducing the right for leaseholders of flats to enfranchise without any rateable value limits would create anomalies for high value houses. Therefore, we have made it clear that not only do we have no fundamental objection to removing the rateable value limits but that we now intend to do so.
Sir John Wheeler (Westminster, North) : I am grateful to my hon. Friend for allowing me to intervene. I should be glad if he would comment on two issues.
First, will he assume that the provisions that he has just announced and which will be included in the forthcoming Bill will apply to the long leaseholders of the Crown Estate, as the Crown Estate Act 1961 would usually exempt the estate from the consequences of this legislation? Secondly, can he confirm that there will not be any evasion of our intentions by those who claim charitable status, except as set out in the Leasehold Reform Act 1967?
Column 585
Mr. Yeo : In the past, the Crown Estate has undertaken to abide by the consequences of legislation and we will have discussions with the aim of achieving that again in this case. In the second case, charitable housing trusts will not be able to claim any exclusion from the legislation except when, for the purpose of fulfilling their charitable objectives, they have sold property at a discount to its market value to the long leaseholder. In other respects, they will be treated the same as everyone else.The existence of the right to enfranchise will be a powerful spur to all landlords to maintain higher standards of management, but it will not eliminate disputes altogether. Leaseholders in blocks where the freeholder is responsible for management will still need to be protected, both against unscrupulous landlords and, sometimes, other tenants.
I regret to say that the problems of bad management are not confined to the private sector. The incompetence or worse extends all too frequently to local authority landlords which is recognised by Conservative Members even if it is often vehemently denied by Opposition Members.
Mr. Benyon : Before my hon. Friend leaves the 1967 Act, I must point out that it is apparent from the note in the Vote Office that those who enfranchise themselves under the extension to the 1967 Act in highly priced properties, mainly in central London, will not get the marriage value or a proportion of the marriage value. If it is equitable for the leaseholders of flats to get that, why is it not equitable for those in such properties?
Mr. Yeo : What is proposed for those properties is consistent with the case of the properties that qualified under the 1967 Act. As my hon. Friend has drawn attention to the point, I undertake to consider it. We have said in the document in the Vote Office that the process of calculating the price is almost identical to the market valuation principle proposed for flats. To the extent that it is different, I will consider my hon. Friend's concerns and reflect on them. My hon. Friend may not be in the House by the time that the legislation goes through. I am sure that he will be here in spirit and I have no doubt that we shall be able to communicate with him as he is a substantial landlord in Hackney. I am sure that the Hackney constituencies will soon become Conservative.
I regret that it is not surprising that Opposition Members are so reticent about the disgraceful behaviour of many local authority landlords, because such landlords are almost invariably Labour-controlled authorities. The principle that landlords can appoint managing agents cannot be easily overturned. I notice that that proposal is included in the Opposition's policyy statement. We have considered carefully whether tenants should be given the right to choose the managing agent or to remove a managing agent chosen by the landlord. To give such a right would create more problems than it would solve. It would present severe practical difficulties if the tenants wanted to take action against the landlord because of poor management. As the landlord is ultimately responsible for the management of the block, he must have the final choice of managing agent.
The Landlord and Tenant Acts already provide for tenants' agents to be consulted over the appointment of managing agents and about their duties. Leaseholders also have the right to be consulted about major works. They
Column 586
have the right to information about service charges, including a summary of the costs and they have the opportunity to inspect supporting documents if unreasonable service charge demands are made.In answer to the concern expressed by my hon. Friend the Member for Hampstead and Highgate, I point out that the legislation provides a broadly adequate set of safeguards. Difficulty has arisen because of the reluctance, which may be understandable, of some tenants to enforce the legislation. The House should deliver a clear message to people that there is a framework that can be used to pursue bad landlords who are inflicting the consequences of poor management on their tenants. As Members of Parliament, we should advise and encourage people to go down the legislative route. Only if we find that the legislation proves to be ineffective when it has been tested in court would it be necessary to consider further change. I understand the caution that many tenants would feel about going to the courts and I especially understand the caution that tenants of local authorities may feel because of the danger of harassment. I condemn the practice of many local authorities, especially in London, of making exorbitant demands for contributions from leaseholders who have exercised the right to buy to the cost of works in the blocks in which they live.
Mr. Yeo : I am glad to hear my hon. Friend being so vocal on the matter. In Waltham Forest and in Southwark, there is still great Labour party hostility to home ownership. That is never far from the surface anywhere in the Labour party. That hostility was reflected in Labour's opposition to the right-to-buy legislation when it was introduced. That hostility is reflected in Labour's opposition to rents-to-mortgages, the most valuable extension of right to buy. Even when the right to buy has been established as a statutory right, local authorities such as Lambeth and Hackney continue to obstruct, both by incompetence and by dogma, the process of tenants trying to exercise their right to buy.
Under prodding from my Department and following legislation, Lambeth's previously lamentable performance has improved slightly. The mantle of being the worst performing London borough in terms of processing right to buy applications has now passed to Hackney.
Sir John Wheeler : Before my hon. Friend concludes his excellent speech, will he deal with this point? He may have been as astounded as I and my hon. Friends were to hear the hon. Member for Knowsley, North (Mr. Howarth) talk about the Government "dithering" over the proposals. Will he confirm that this Government set up the Nugee committee of inquiry in 1984 which led to the Landlord and Tenant Act 1987? It greatly extended the accountablity of freeholders and managing agents to renting and leaseholding residents.
Will my hon. Friend dwell on another point? Although the Opposition have said that they support the forthcoming legislation, they have proposed in their policy documents the introduction of two taxes that would make the acquisition of freeholds and commonhold an irrelevance. They propose an inheritance tax and the reintroduction of a capital transfer tax.
Column 587
Mr. Yeo : My hon. Friend makes two important points. No Government have done more than we have, through a series of measures throughout the 1980s--we will follow that in the 1990s--designed to bring sense and balance in the relationship between landlords and tenants. In the unlikely and tragic event of the Labour party coming to power this year, there is no doubt that few leaseholders would have the resources or inclination to try to exercise the rights that we propose because they would have been taxed out of existence. The danger of the Labour party coming to power is that most householders, through a combination of higher income tax, higher national insurance contributions and, above all, higher community charges, because Labour is committed to abolishing community charge capping, would be struggling to remain where they are now. They will not be able to lay out money to acquire the freehold of their properties.The Opposition's total silence about the way in which their Labour party allies in the local authorities are denying tenants their statutory rights is revealing. We have listened in vain this morning, as always, for any whisper of condemnation of those disgraceful practices. It is not only that such authorities deny tenants their statutory rights. They waste resources by leaving properties empty and by failing to collect the rents due to them. To know what a Labour Government would be like in practice, one has only to look at the record of the London Labour-controlled authorities.
Let me conclude with a word about service charges.
Mr. George Howarth : The Minister has treated us to a long litany of abuse. As he has widened the debate to housing concerns in general, would he care to spend a few minutes defending the Government's record on homelessness?
Mr. Yeo : I am glad to be able to tell the hon. Gentleman that I am looking forward to the publication of the next set of homelessness statistics next week, and they will demonstrate the success of our policies.
Let me deal specifically with the point about service charges. We know of contributions requested from leaseholders of £20,000 towards work on flats whose total market value is little more than that. We have heard of demands for advance payments of up to £40,000--even where there is no evidence that the council plans to carry out any work in the near future. At the moment, I am taking up a case with Southwark--brought to my attention through the good offices of my hon. Friend the Member for Dulwich --involving a tenant who has been billed every quarter for a contribution of £100 a month towards repairs that the council shows no sign of being ready to undertake. That sum is additional to the charges for day-to- day services and maintenance costs. If that is not an abuse of landlords' power, I do not know what is. It is certainly not acceptable to us. Again, I listen in vain for any condemnation of that practice by the Labour party.
Mr. Harry Greenway : Will my hon. Friend give way?
Mr. Yeo : No, I must make progress. I am sorry, but I have given way many times.
Tenants are being discouraged from exercising the right to buy because of their fears of excessive charges--fears that are being whipped up by councils providing unjustifiably high pre-sale estimates. They are being
Column 588
warned of--one might almost say that they are being threatened with--liability for repair bills higher than the value of the flats themselves.On the issue of timing, my hon. Friends will know that I cannot make commitments about what legislation will be included in the first Session of the new Parliament. I can confirm, however, that leasehold enfranchisement and the introduction of commonhold will be a top priority. We have done the work, we have completed the consultation. The Government are committed to the policy.
The Opposition have tried to claim that they would attach a high priority to such a policy--but they have so many priorities. By the time they have introduced legislation to cripple employers and destroy jobs through the introduction of a minimum wage, and to legalise flying pickets, by the time they have renationalised the water industry, abolished fund-holding general practices and scrapped the council tax, I do not know how much parliamentary time will be left in the first five years, let alone the first year.
At least the Opposition list their priorities on housing : there are 16 priorities listed in their policy document on housing, and I should like to draw my hon. Friend's attention to one of them. Labour would lift restrictions on direct labour organisations. Of course, the Opposition must pay their dues to their masters in the public sector trade unions, but to call the promotion of direct labour organisations a priority is surely unnecessary even by Labour party standards. Let us recognise it for what it is not a priority but a threat to the pockets of charge payers in London Labour-controlled local authority areas who have benefited so much from compulsory competitive tendering. It is a threat, too, to the tenants, whose repairs are unlikely to be more speedily or effectively undertaken if the direct labour organisation monopoly is restored as the Labour party wishes. The priority for Labour to help its union friends ranks at least equally with the introduction of leasehold enfranchisement. The message is clear : those who want legislation on the statute book quickly need a re- elected Conservative Government. That is what they will get later this year, and I commend the policy to the House. 12.31 pm
Mr. W. Benyon (Milton Keynes) : I had not intended to speak in the debate but as it has been rather one-sided I have decided that I would like to intervene. I must declare my interest as the owner of leasehold property.
No one objects at all to commonhold as an additional form of housing tenure --although the claims made for it are grossly exaggerated, and the sort of instances described by the hon. Member for Tooting (Mr. Cox) show the difficulties that will arise. Commonhold sounds lovely but in practice it will mean a lot of extra money for the lawyers.
It is not that aspect with which I have difficulty, however. What sticks in the gullet is the compulsory overthrow of agreements freely entered into and their extension--quite apart from commonhold--to the Leasehold Reform Act 1967. The changes will affect the whole concept of the private rented market. As my hon. Friend the Member for Epping Forest (Mr. Norrish) implied in his intervention, that effect could have been avoided, by allowing the right of enfranchisement on change of ownership or where a landlord does not conform to a proper code of practice.
Column 589
Such legislation would remove long leasehold from housing tenure. Nobody would ever again grant a long lease. The opponents of the existing system say, "So what. This is a bad system and we have heard much of its defects today. We have heard a lot about the bad apples in the barrel." But there are grave disadvantages in losing the leasehold system, particularly in areas of high-priced property. Leasehold has always been the halfway house between direct rental and owner occupation. Without it there will remain only two forms of private housing tenure--direct rental on my one hand and owner occupation on the other. I beg my hon. Friends to understand that, as a result of the change, both will become more expensive.One of the saddest aspects of the current housing scene is the relatively small size of the private rented sector. Compared with our industrial competitors overseas, we are a long way behind, which militates against the mobility of labour. There are several reasons for that--principally, the low return that a landlord receives on rented property largely caused by the tax advantages available to owner occupiers. It is also a direct result of the political uncertainty that has surrounded rented property for so many years. As a result of the compulsion element of the proposed change whereby a Conservative Government proposes that these contracts should be overthrown, landlords will wonder how they can ensure that the same will not happen to ordinary rented properties and will decide to get out now while the going is good. That will be their overriding reaction.
Some of my hon. Friends may say that the number of private rentals is now rising, and I have the figures from the Royal Institution of Chartered Surveyors. But that is because of the depressed state of the housing market. As soon as that changes, as it rapidly will, people will leave the private rented sector in droves.
May I raise the issue of compensation, not as a private plea but because it is important for landlords' general conception of renting in the future. I was glad that my hon. Friend the Minister replied to me as he did about the extension to the 1967 Act. But even what is proposed for flats--the market price plus at least half the market value--will give enormous immediate tax -free capital gains to the leaseholder at the expense of the freeholder. There is no way to avoid that. If no change is made to the proposal for extending the 1967 Act, the windfall gain involved will be enormous and will involve hundreds of thousands of pounds per property. That is marvellous for the Government because they do not have to pay a penny, and it will no doubt have a considerable effect on how people vote. But it does make one curious about why all those impoverished people in Eaton square should have that windfall.
Excluding the 1967 Act itself, we must go back to the dissolution of the monasteries by Henry VIII to find an equivalent transfer of property from one section of the population to another.
Sir John Wheeler : I am tempted to intervene in my hon. Friend's speech to say that he may have proved the case for change if he is looking back that far in history.
Mr. Benyon : Henry VIII transferred arbitrarily a large amount of property in this country. My hon. Friend may say that that was beneficial. I am not arguing that point, but it is a curious measure for the Conservative party to
Column 590
aspire to. When the appearance of central London changes out of all recognition, as it will, and when the price of property and rents escalate, we shall know who to blame.12.38 pm
Mr. Hugo Summerson (Walthamstow) : I also congratulate my hon. Friend the Member for Dulwich (Mr. Bowden) on his good fortune in winning the ballot and choosing such an interesting motion for debate.
Commercial leasehold has not yet been dealt with in the debate. In a good letting market, a landlord has all the advantages. People fall over themselves to take property at a time of buoyant economy and many people want to run their own businesses from those properties. That means that landlords can include all sorts of conditions in leases, sometimes quite onerous ones that deal with the maintenance of the building and state that there must be rent reviews at regular intervals--indeed, upward-only rent reviews at regular intervals. The landlord is doubly advantaged by privity of contract--a double whammy.
We should ask what privity of contract is--
Mr. Summerson : My hon. Friend asks me to define it, and I am just about to make a gallant effort to do so. In broad and general terms, at the start of a lease there is privity of contract between the lessee and the freeholder. Well on into the lease, where the lease may have been assigned several times, there is privity of estate between the freeholder and whoever holds the lease at the time. In addition, there is privity of contract between the freeholder and the original lessee, who may have assigned the lease and disappeared off into the distance.
If the lease was originally for a term of 25 years, has run for 15 to 20 years, has been assigned several times, and the holder of the lease is unable to pay the rent or comply with the conditions of the lease, the landlord can go back to the original tenant. As there is privity of contract between the two, the landlord can demand of the original tenant that he pays the rent. It could be that, with upward-only rent reviews, the rent will be much higher than it was when the lease was first granted.
I have some examples of what can happen in those circumstances, and shall quote from a publication, "Drapers Record--the Fashion Business". It states :
"Some retailers are facing bills of up to £50,000 for rent arrears run up by tenants to whom the lease has been sold on. By law, previous holders of the lease can be forced to pay the arrears, if the current holder defaults on payment.
Retailers say that they face bankruptcy because they cannot pay the bills.
One fashion retailer in the Midlands, who said he did not wish to be named, said he had just received a demand for £50,000 on a property which he and his wife had left 11 years ago. It is causing a lot of hardship but it is the law, and the freeholder is entirely within his rights to do this.'
The retailer is now worried that the landlord will continue to force him to pay the rent until the lease is up in another nine years or until another tenant is found. He added : We will have to go bankrupt--there is no way that we can be liable for that sort of figure.' "
That is what happens with privity of contract.
A report was published by the Law Commission in November 1988, following publication of a consultation paper in 1986. A press notice on the report states :
"Once a tenant no longer owns property, he should not pay for it. The Law Commission, in a report published today, recommends that the responsibilities of both landlords and tenants under a lease should normally end as soon as they
Column 591
dispose of the property. At present, the general rule is that anyone who signs a lease remains liable to comply with the obligations until the end of the lease period, even though he may long since have parted with all interest in the property. The rule applies equally to landlords and to tenants, of all types of property--residential, commercial, agricultural. But tenants feel the main impact because leases impose more obligations on them. Difficulties arise particularly when the original tenant transfers the lease, the new tenant defaults on the rent, and the original tenant has to foot the bill The Law Commission found widespread ignorance of the present rule."We cannot be surprised that there is widespread ignorance of privity of contract.
The press notice continues :
"The first that many people heard of it was when they received a claim.
Although it is now possible to make a contract to vary the position, the Commission reports that landlords are often in a dominant position in this market, which either makes it impractical for tenants to negotiate on equal terms or even deters them from trying'.
The Law Commission recommends that liability should normally cease when an owner parts with property let on a lease, but there would be exceptions. The scheme works differently for tenants and for landlords :
Tenants would automatically be released, unless the landlord's consent to a transfer was needed and he could show that it was reasonable that they should quarantee their immediate successor's liability.
Landlords would have a chance to seek a release, but the tenant would have the opportunity to insist on their remaining responsible if it was reasonable that they should be."
The matter was raised more recently by my right hon. Friend the Member for Worthing (Mr. Higgins), who tabled a question answered on 3 March by the Attorney-General, who said :
"In 1988 the Law Commission published its report, Landlord and Tenant Law : Privity of Contract and Estate', Law Com. No. 174. It recommended that all the obligations created by leases should bind the parties who for the time being are interested in the land and that those parties should cease to have any liability when they part with those interests, except in cases in which it is objectively reasonable that their liability contiue. It is envisaged that in many cases a landlord consenting to an assignment by a tenant of his interest will be able to impose a condition that the tenant guarantees the performance of the lease covenants by his successor, but only until any subsequent assignment. The Lord Chancellor is actively considering the report's recommendations and hopes to be able to make an announcement about them in the near future."--[ Official Report, 3 March 1992 ; Vol. 205, c. 99 .]
That is good news, especially since, as we hope, the Lord Chancellor has been actively considering the report's recommendations since 1988, so he will doubtless be full of ideas.
It surely cannot be right that a landlord can bankrupt someone for someone else's debt.
Turning to residential matters, I declare an interest as the owner of some freehold property in south-west London. My hon. Friend the Member for Dulwich is quite right about the difficulties facing leaseholders. He spoke of rapacious freeholders and declining leases, and no doubt there are problems ; but certain difficulties also face freeholders. They will have responsibilities imposed on them for any lease. Usually, those responsibilities will include managing, insuring and maintaining a building. Freeholders, too, can run into difficulties. What if, for instance, a couple of lessees in the block do not feel like contributing to the cost of maintenance? Property maintenance is expensive and sometimes people do not feel
Column 592
like paying up. That puts freeholders in a quandary ; they are bound by the terms of the lease and by statute to maintain a property. What, therefore, should they do when lessees say that they will not pay? They may decide that if they do not go ahead they will be breaking the law, so they go ahead and try to recover the money later. If a great deal of work has to be done to the block in question, the freeholder may find himself having to pay out large sums of money which the lessees have refused to pay.House owners have a choice when it comes to maintenance. If the roof starts to leak and someone is feeling a bit hard up, he can decide to buy a bucket to catch the drips and leave the roof until next year. A block of flats is different, however, because the interests of everyone in it have to be considered and the freeholder may have to carry out the work. I question whether these difficulties will be solved by what we have been discussing today.
Will commonhold solve all these problems? Certainly, it will have certain different effects on blocks of flats. It will mean that other commonholders will be able to put pressure on those who do not feel inclined to pay their bills. On the other hand, some people say, "We want to live in peace with our neighbours and do not feel like knocking on the door of the recalcitrant lessee. If he will not pay up that will make things difficult for everyone else."
However, there are rapacious freeholders, people who do not do their job properly. Some of them terrorise leaseholders, and I use those words in a considered way. My constituency has a large block of flats called Fernhill court and there are many problems there. The first problem is in finding out who the landlords are. I think that the Freshwater group is involved, but the trouble is that it has created a number of intermediate forms of tenure. There are freeholders, head leaseholders, under-leaseholders and
sub-under-leaseholders. As a result, responsibility for carrying out the terms and conditions of the leases has become thoroughly obscured.
Whoever the freeholders or leaseholders are in that case, they are certainly good at sending out service charge bills to the lessees, and those bills arrive without reference to any law. They consist of a bald statement to the effect that the person owes £500 in service charge. However, they are certainly bad at maintaining the property. They say, "We refuse to maintain the property until you, the lessees, pay our service charges." That is what I mean by rapacious freeholders. It is unfortunate that such things happen, because they tend to give the whole leasehold system a bad name.
Fernhill court also has the problem of short leases which are down to about 30 years, and many elderly people in the blocks are worried about that. Some of them are worried that they may outlive their leases and others are worried that if they want to move they cannot. How can anyone sell a 30- year lease in a block of flats, particularly where those who are supposed to be maintaining the fabric of the property are not doing their duty and are sending out exorbitant and, I am sure, illegal service charge demands?
We must be careful not to throw out the baby with the bath water, because there are many well-managed estates. Estates in London, and especially in central London such as the Grosvenor estate, Belgravia and Mayfair, tend to be well looked after and well maintained. If an estate wishes to sell properties on fairly short leases it should have the right to do so. Many foreigners who come to this country for two or three years would like a home of their own and
Column 593
are perfectly willing to pay a premium for a 25 or 30-year lease in a part of London such as Mayfair or Belgravia. They do not wish to buy a 99-year lease, because the difference in the amount that they would have to pay for a 35-year lease and a 99-year lease is considerable. They know that at the end of the time they can sell the lease and return to America or wherever.We should consider a simpler solution to the problem, which is that ordinary flats should be sold on leases of, say, 999 years. Those who erect blocks of flats or convert a house into flats sell them on 99 or 125-year leases and then scarper because they are not interested in the freehold. If the leases were for 999 years the freehold could be vested in the leaseholders.
I spoke about elderly people with short leases. Is it possible to put in place some sort of system whereby elderly people who have lived in their flats for a long time but are unable to sell them because of a short lease could sell them on notional 99-year leases? That proportion of the price received that can be attributable to their flats could be passed over to them and the rest passed over to the freeholder, or something like that.
I was rather cross when the hon. Member for Knowsley, North (Mr. Howarth) read out a quote from the Consumers Association because I was going to do that myself. However, although he was good at reading out its reservations, he did not quote one part of the letter, which says :
"In brief, we broadly welcome the developments to date." I have received a paper, called "A Programme for a New Parliament", from the Royal Institution of Chartered Surveyors, of which I have the honour to be a fellow. It asks for a better deal for leaseholders and tenants and says :
"Many people in rented and leasehold accommodation have to endure low standards of management and maintenance. The government has tried to help some tenants through its Tenant's Charter. But many tenants and leaseholders in both the public and private sectors still receive a poor service from landlords. Organising even essential repairs can be a major problem.
There is cross-party support for the introduction of a system of commonhold under which leaseholders would be given the right to buy their freehold. Management of the common parts of blocks of flats would then become the responsibility of a commonhold association comprising of all the flat owners. What more can be done? A statutory code of practice should be prepared for all who manage residential property--whether rented or leasehold, public or private sector. It would lay down a set of minimum standards which all managers would have to meet. The RICS is currently preparing just such a code in close liaison with the Department of the Environment. A commonhold form of tenure may suit the needs of some people. But introducing it poses many problems. It should only be available with the agreement of both the leaseholders and the freeholder. The needs of many leaseholders may well be better served by giving them a statutory right to extend their leases, a right already enjoyed by commercial leaseholders. This would overcome the difficulty that leaseholders can experience in selling flats with short leases." Those who have been listening to my speech will doubtless be able to point out a number of contradictions in what I have been saying. That just goes to show how difficult and complicated a subject this is. We have to be terribly careful about what we are proposing and doing. Dispossessing good landlords and freeholders of their properties is something which no Conservative Government should undertake lightly.
I emphasise what has already been said by my hon. Friend the Minister about the treatment by the London
Column 594
borough of Waltham Forest of leaseholders who have exercised their right to buy their flats from the council. Waltham Forest council has behaved in the most disgraceful way towards those leaseholders. It has sent out demands for sinking funds--demands that lead to sinking hearts in my constituency. These demands are often undetailed and have figures written in at the bottom in hand. This is a London borough behaving like this.Some of the service charges are for exorbitant amounts. People get demands for £2,000 on account. As a result, the London borough of Waltham Forest leaseholders' association has been set up. That just goes to show the demand that there is for a voice for these people who feel themselves so pressurised by the council. There are now more than 2,000 members of the association, which has sent delegations to see me and my hon. Friend the Minister. They are looking to us for help. I am grateful for the assistance that he has already given and I look forward to the further assistance that he will doubless give in the future.
12.59 pm
Mr. Steve Norris (Epping Forest) : First, I make my declaration of interest in leaseholds as chairman of Haven Services Ltd. Secondly, I apologise to the House for being absent during the first part of the Minister's speech. I was carrying the Home Secretary's bag from his office to the House before he delivered his most welcome statement on the national lottery.
I congratulate my hon. Friend the Member for Dulwich (Mr. Bowden) on his good fortune in the ballot and on what I am assured was a most lucid survey of the problems of leaseholders in Britain. I wish to enter one or two notes of caution along the lines of those of my hon. Friend the Member for Milton Keynes (Mr. Benyon), whose contributions to our debates will be sorely missed by those of us who know him to be one of the most honourable of all right hon. and hon. Members. He has a most distinguished record of contributions to many debates over many years.
The Government are proposing and extremely un-Conservative act. As my hon. Friend the Member for Milton Keynes said, they are proposing to dissieze on a scale which has not been contemplated since--I am sure that the historical researches of my hon. Friend are complete--the dissolution of the monasteries.
We are talking about the right to enfranchise and purchase long leases and the recent announcement of the right to extend leases by providing an extension to the balance of the existing lease plus 90 years. We are establishing a new right to householders who were previously excluded from the terms of leasehold reform legislation to buy their properties, whether or not the landlord likes it, and there is now the new right of commonhold.
My hon. Friend the Minister was right to suggest that there is often confusion over the differences between leasehold
enfranchisement and the principle of commonhold. I have no great difficulty with the concept of commonhold, because my hon. Friend made it clear that compulsion was to be absent in deciding when and where commonhold might be appropriate. I believe that he is right. There might be merit--not exclusively but on many occasions--in having a form of ownership of units of occupation within one larger unit or building, which is
Column 595
essentially what we are talking about, of the sort that commonhold seems to represent. I hope that in the next Parliament my hon. Friend, if he has not then moved on to be the Minister of State or the Secretary of State of another Department, will be able to advance that concept. I am sure that it would be generally approved. With leasehold enfranchisement, we are surely in extremely dangerous territory. We are saying that we, the Conservative party, should require an individual to sell an asset--not that he wants to or has any intention of doing so, and not that he has been anything but the most prudent, decent, honourable and conscientiouslandlord--merely because the tenant of the property that the landlord owns has decided that he or she would like to make a windfall gain.
Sir John Wheeler : Surely my hon. Friend recognises that Parliament decided upon that principle in 1967. The decision has been made. We are proposing to extend the principle to a few remaining houses, chiefly in central London. Surely he recognises also the impossibility of enfranchising the £1 million flat in Westminster under commonhold but leaving the £1 million house next door to it still subject to the leasehold regime.
| Next Section
| Home Page |