Clause 5Exceptions
Homes Bill
3:15 pm
Mr Nick Raynsford (Minister of State, Department of the Environment, Transport and the Regions; Greenwich and Woolwich, Labour)
The hon. Member for Eastbourne rightly made the point that we had covered some of these issues on Tuesday, and the right hon. Member for Skipton and Ripon returned to a number of issues that he had previously raised. I thank the hon. Member for Eastbourne for his amendment, which has served a wider purpose than he probably anticipated when he tabled it.
I can assure the hon. Gentleman that the purpose for which he tabled it is not relevant. The amendment was prompted by concern that council tenants would be denied benefit because they were not buying vacant possession. In practice, when council tenants buy a property, they do so with vacant possession. They cease to be tenants and obtain vacant possession of the property. Therefore, if that was the concern that prompted his amendment, it is not material. The amendment is additionally not material because the position of council tenants is governed not by the Bill, but by the right-to-buy provisions, to which I shall turn shortly.
I am glad that the hon. Gentleman tabled the amendment, however, because it has highlighted that there could be a difficulty with some properties, as sometimes happens when people buy a house that has a separate flat in the basement with a sitting tenant. In such cases there could be definitional problems, and we intend to look further at that. I thank the hon. Gentleman for a useful contribution to the debate, even if not quite along the lines that he had originally intended.
As I made clear on Tuesday, the principles underlying the Bill should apply to local authorities and registered social landlords. I was delighted to hear from the right hon. Member for Skipton and Ripon that, on reflection, he recognises that that is appropriate. Where authorities and social landlords act as seller, marketing vacant stock, the Bill will apply to them. Where they are selling under the right to buy, slightly different circumstances apply. The local authority is already required under the right-to-buy legislation to give the tenant a description of any known structural defect affecting the dwelling and, for flats, any defect affecting the building in which the flat is situated. Existing legislation also requires information to be provided up front about the terms of the conveyance, any lease or service charges and any improvement contributions that may be required. Thus, local authorities are already under substantial obligations with regard to the provision of up-front information.
The pack of information required to be provided under the right to buy is governed by the Housing Act 1985. Our intention is that those arrangements should be made fully consistent with the principles underlying this Bill. We will consult closely with local government, the Housing Corporation and the National Housing Federation as we draw up the detail of the seller's pack. That consultation will enable us to clarify what legislative changes may be necessary for right-to-buy transactions. We do not know whether changes will be necessary and it is quite possible that no changes will be needed. However, any changes will be to the 1985 Act rather than the Bill. In the meantime, as I have already explained, it would be nonsense to exclude local authorities and RSLs from the ambit of the Bill when they put their properties on the market.
Turning again to the points made by the right hon. Member for Ripon and Skipton—sorry, I keep getting that wrong, but I shall not repeat his elegant phrase to describe my inability to get Skipton and Ripon in the right order, as it might not go down well in the Yorkshire dales. He asked whether, if there is an exemption for low-value properties—I stress that we do not say that there definitely will be an exemption—a council property subject to a large discount might come below the threshold, thus depriving the tenant of the seller's pack. As I stressed on Tuesday, the tenant might be the person most in need of the information. I am giving an instant response to him because this is an important point, but I will check it further. My understanding is that value is value before discount, and that the discount that would apply in respect of right to buy would not be material to a valuation. The fact that a tenant of long standing qualifies for a relatively large discount would not of itself bring a property down to below a threshold. I accept entirely that there is a problem where local authorities are subject to right-to-buy applications in very low-value areas. I should like to reflect further on whether, if an exemption figure applies, it should apply to local authority properties. I hope that that sets the right hon. Gentleman's mind at rest on the issue.
I stress once again that the figure of £10,000 that I mentioned on Tuesday was an illustration. I do not rule it out, but there is no intention at present to adopt a cut-off point at that or any other level. We are considering the issues carefully and we will consult with the full range of interested parties. I accept whole heartedly his concerns about the regenerative benefits of provisions that help people to acquire properties in low-value areas. We certainly would not want to damage that process.
Finally, on the right hon. Gentleman's point about people adjusting the price to come just below the cut-off point, that is one of the problems of having a cut-off point. We will need to consider that when we decide whether there should be an exemption and at what level it should be pitched. He is probably right that there is less need for a seller's pack for £1-million houses, as buyers of such properties can protect themselves perfectly well, but in practice it will happen in any case because someone buying such a property would expect to have a pretty clear indication of its quality before investing such a sum. The requirement to have a seller's pack will not impede transactions in that section of the market.