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Mr. Bill Wiggin (Leominster): My hon. Friend the Member for Stone (Mr. Cash) referred to me earlier, so I shall explain why I spoke on this sensitive subject in Committee. As will be made repeatedly clear in our debates, there were two reasons for the original design of leaseholds. First, they were designed so that a leasehold house might be sold in a similar fashion to a freehold. The second reason was to enable the house to return to the freeholder after a short period—but more than 21 years.

It has been a tremendous achievement of the Committee and of the hon. Member for Cleethorpes (Shona McIsaac) to have incorporated this two-year

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period in the Bill. It takes at least two years to proceed through the legal minefield, so the amendment is sensible and compassionate. It will become clear later that some leases were put together with the idea that they should return to the freeholder. However, a two-year period is very reasonable under the circumstances. I congratulate the hon. Lady.

The hon. Lady also said that there might be consultation in about six months, but that period may quickly disappear. I hope that the Minister will review the formula that my hon. Friend the Member for Solihull (Mr. Taylor) mentioned, although I noticed a little frown sneak across her face when he raised the issue. I look forward to reassurance from the Minister so that we can count down to the time when the formula will be reviewed.

6.45 pm

Ms Keeble: Members on both sides of the House have recognised the work of my hon. Friend the Member for Cleethorpes (Shona McIsaac) in securing this amendment. The whole House recognises her long track record on campaigning on the leasehold issues affecting her constituents. We shall later debate other provisions that she has played a large part in securing. She has performed a real service to her constituents. We all know—she has often told us—that many of them are elderly people who live in leasehold houses. The points that she made about personal representatives and the interests of family members are very profound and real.

I want to clarify a point about the provision of information on the valuation basis. I have a feeling that the hon. Member for Solihull (Mr. Taylor) was talking about the formulaic assessment of the valuation that he has often mentioned, so I should clarify the remarks that I made in Committee. Under the Leasehold Reform Act 1967, we already have powers to prescribe the form and content of the landlord counter-notice, and we will consult on proposals to require information about the basis on which the landlord's counter-offer has been calculated. That will form part of our consultation on the secondary legislation that will implement the Bill. We have to consult on several issues in order to take the Bill forward. However, I note that the hon. Member for Solihull has not held his breath; he is no longer in his place.

Amendment agreed to.

Clause 140

Tenancies not at low rent

Mr. Cash: I beg to move amendment No. 88, in page 68, line 1, at end insert—

'(a) after paragraph (a) insert—
"(aa) the tenancy was granted for a term of years not exceeding 80 years".'.

Madam Deputy Speaker: With this it will be convenient to discuss amendment No. 62, in clause 142, page 68, line 37, at end insert—

'(1A) Nothing in the omission from section 16 of the 1967 Act provided for by subsection (1)(a) above shall prejudice the operation of any provision of a private Act by which an interest in property

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vested in a body for the benefit of the public may not be sold, leased, granted or otherwise disposed of otherwise than in accordance with that private Act.'.

Mr. Cash: Amendment No. 88 is in my name and that of my hon. Friend the Member for Cotswold (Mr. Clifton-Brown), who has raised an important constituency issue that arises out of the Bill.

Amendment No. 62 was tabled by the hon. Member for Wimbledon (Roger Casale). Although it is interesting, I am not sure how it connects with amendment No. 88. I shall be interested in the hon. Gentleman's explanation, not least because I am curious to learn what type of private Acts the amendment refers to. He may reveal interesting facts about how the private Acts that he has in mind will operate.

I return to the gravamen that led my hon. Friend the Member for Cotswold to seek to amend the Bill. For a variety of reasons, it is a racing certainty that my hon. Friend will not be able to return to the House to deal with this issue, but I can do just that for him. His constituent Mr. Mason lives in Adlestrop in Moreton-in-Marsh, a place that I know well. As chairman of the Adlestrop residents' association, Mr. Mason has set out with great clarity his concerns about enfranchisement, which, as he says,

"are not currently addressed by the Bill."

The Minister may already have been in correspondence with Mr. Mason and, if she has, she will be thoroughly briefed on how to reply to the arguments of the Adlestrop residents' association, which I shall now set out. It is an interesting feature of the landscape of our parliamentary proceedings that we have an opportunity to focus on a problem that would otherwise be swept aside in ministerial correspondence.

Mr. Mason says in his letter to my hon. Friend:

"As you know, Adlestrop is a small village with some 70 adult inhabitants and is somewhat unusual in that it comprises a number of long leasehold properties. The freeholder of these properties is the Trustees of the Adlestrop Settlement. Apart from one freehold property, the remaining properties in the village are owned by the Adlestrop Trustees and are let on short term tenancies at an open market rent."

There are currently 18 long leasehold properties and an almost identical number of properties that are let on short-term tenancies. The letter continues:

"The 18 long leasehold properties fall into three different categories . . . There are properties where leases contain a Prince of Wales Clause and which qualify for enfranchisement under the 1993 Act."

In light of that, perhaps we should consider whether the consent of the Prince of Wales or the Duchy of Lancaster should be signified to the proposal. However, such a technical question would only tickle the fancy of legal advisers.

Mr. Mason then says:

"There are properties where leases were not at a low rent but which now qualify for enfranchisement as a result of the Housing Act 1996 . . . There are properties where leases are not at a low rent but which will not qualify for enfranchisement under the 1996 Act on account of the fact that the freehold of the property 'is owned together with adjoining land which is not occupied for residential purposes.' These properties would be enfranchiseable but for the exclusion of certain properties in rural areas contained in Section 1AA(3) Leasehold Reform Act 1967, which was of course introduced by the 1996 Act.

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The pattern that was followed in Adlestrop is that long leases were granted on a number of properties in the early 1970s at a rent which was not a low rent. Subsequently, during the period between the mid 1970s and the late 1980s, leases appear to have been granted with Prince of Wales Clauses."

Mr. Wiggin: Will my hon. Friend briefly explain what a Prince of Wales clause is?

Mr. Cash: The Minister may be able to help, because I am not sure. As I understand it, a Prince of Wales clause is a special provision in Acts to save the rights, properties, privileges and liabilities of the Prince of Wales. [Interruption.] Would the Minister be good enough to repeat what she has just said from a sedentary position? Obviously not, and in the absence of my hon. Friend the Member for Cotswold, I am afraid that I can only take a stab at it. Perhaps we can elucidate such matters in due course.

The letter goes on to say:

"Subsequently, from 1990 onwards leases have been granted with a formula which ensures that the lease is not at a low rent. I can let you have copies of leases for each category . . . The leases were granted at terms in excess of 99 years and in most cases were for a term of 120 years or more.


In each case the properties were sold at a premium by the trustees. The only reason for the sale of the properties on long leases, rather than by way of the sale of the freehold, was to enable the freeholder to retain control over the development, character and amenity of the village. There is no prospect that the freeholder will wish to resume possession of any of the properties on expiry of the leases. In each case a substantial premium was paid on the grant of the lease which would have been broadly equivalent to the price on the sale of the freehold (reflecting the length of the lease). In layman's parlance, the properties were effectively sold. In most cases, the properties were in very bad repair or involved the sale of a building plot which was subsequently developed by the lessee. The lessees have therefore expended considerable sums on the properties.


The control of the development, character and amenity of the village can of course be met equally through an Estate Management Scheme. An Estate Management Scheme was introduced in 1998 in anticipation of the eventual enfranchisement of a number of properties within the village."

There are many estate management schemes for rural estates. It is by no means improbable that the problems faced by Adlestrop are also shared by others who live on estates that are owned by individual freeholders. It is surprising how many villages are in that situation and have properties that are let on the basis of similar arrangements which give rise to the problems that I have described. Unless the Minister has evidence to the contrary, I do not think that Adlestrop is an isolated case and, as my argument has a general application, I hope that I can help to elucidate some of the problems.

The residents' association continues:

"To date, only one property has been enfranchised. In that case enfranchisement took place by agreement between the parties outside the Act and prior to implementation of the Estate Management Scheme. The lack of enfranchisement reflects the fact that, where properties are enfranchiseable, lessees have been awaiting clarification of the marriage value issue"

which Mr. Mason hopes will be resolved by the Bill. The letter says:

"In other cases, properties are not enfranchiseable.


The problems of Adlestrop were the subject of the debate in the House of Lords prior to enactment of the 1996 Act which resulted in introduction of the rural exemption provision. I understand that this was intended to avoid enfranchisement of country properties which had been let for more than 21 years at a rent in excess of the

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low rent and where it was clearly anticipated that the freeholder may wish to regain possession of the property on the expiry of the lease. This is not a situation which is applicable to Adlestrop, but unfortunately the rural exemption extends to all leases over 35 years which are not at a low rent in designated rural areas."

So the problems that Adlestrop faces are applicable elsewhere.

The letter continues:

"I understand that rural areas have been designated by the Secretary of State and which include Adlestrop.


The end result so far as Adlestrop is concerned is that some properties are enfranchiseable whereas others are not."

Mr. Mason then says:

"You will be aware that the nature of the properties does not justify such a distinction."

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