Clause 153 - Information to help tenants decide whether to exercise right to buy etc.
Housing Bill
11:15 am
Dr Brian Iddon (Bolton South East, Labour)
I welcome the clause. I notice that the Local Government Association and many other stakeholders have requested that the Government include it in the Bill. I certainly think that it is essential.
In my experience of talking to hundreds of tenants, when they consider buying their council house they look at the rent that they are paying, which they know will rise roughly in line with wages, and they go to a building society to find out what they would pay for a mortgage, which will be relatively constant through time as their wages rise. They make their decision to buy on that basis, and in some cases without taking into account any other considerations. It is right that somebody should advise them on the costs of running a property, including not only the costs of the utilities, insurance and everything else that is rightly included in the document that we received this morning, but the cost of maintenance.
As chairman of a housing committee, I have authorised programmes of maintenance on estates, and when we have finished a programme, many of the right-to-buy properties have stood out like sore thumbs. They have become dilapidated over several years because the tenants have not been able to maintain them. I have been surprised by the naivety of some tenants. When a painting contractor has begun to paint a house that has gone into the owner-occupiership of a previous right-to-buy tenant, the owner-occupier at the time will sometimes merely assume that the local authority is painting their house for nothing.
Right to buy has hidden costs. We could consider a terrace of council properties, between which there may be alleyways, but also a running gutter across the top. A local authority could decide to replace the gutter all the way along the terrace, despite the fact that there
might be several right-to-buy properties within it. It would be easier to do that than to stop and start the gutter every time there was a right-to-buy property. I could wax lyrical about dozens of similar cases of hidden costs.
I wish that clause 153 had been in effect when the Conservatives instigated right to buy in 1980. I remind the Committee of the problems that arose with regard to houses with defects—does anybody remember them? There are all kinds of system-built properties in Bolton, and one kind was Orlits properties—concrete block properties with no cavities that were built with high alumina cement that started to blow inside and outside the properties and exposed all the steel infrastructure to the weather. Many tenants bought such properties.
When the Conservatives were in government, they foisted on local authorities the Housing Defects Act 1984, under which authorities were forced to buy all the properties back again. In Bolton, we bought them all back bar two—there were hundreds of them—and we had to buy them at the market value of the time. What a cost that imposed on all local authorities. In the case of Bolton, it cost millions of pounds, which would have been better spent on maintaining those properties or on repairing other properties in the borough. That could all have been avoided if the clause had been introduced in a previous Act. One strong recommendation would be that the tenant should consult a valuer, or—as in the Bill—that the condition of the house should be stated up front so that they can see it clearly.
It was not only Orlits properties that caused us problems. At least one builder went to the local power station and obtained sulphate-containing ash. The foundations of the property in question were constructed by putting the ash on the ground, as well as a layer of concrete and a layer of asphalt. The sulphate begins to expand as it gets damp—admittedly this occurs over 20, 30, 40 or 50 years—and the floor lifts. Believe it or not, people who bought such properties returned to the local authority. They had assumed that the authority would put right a major structural defect free of charge. The naivety of people who have rented properties from the council all their lives is unbelievable. They do not understand the full consequences of purchasing their council property.
Ms Karen Buck (Regent's Park and Kensington North, Labour)
Perhaps my hon. Friend will comment on the practices that were common in Westminster city council in the late 1980s and early 1990s, when a package was offered that included surveys and mortgage assistance to encourage people to exercise their right to buy. That was wrapped around what was subsequently found to be an illegal indemnity scheme against major repairs. One consequence was that huge numbers of lessees who bought on the belief that they would have a cost-free property and that their financial commitment would not be great found that through that scheme or subsequently, they were faced with maintenance bills of £10,000, £15,000 or £20,000. A number of those people ended up back in my surgery because they had lost their homes and were homeless.
Dr Brian Iddon (Bolton South East, Labour)
That is another example of why the clause has been necessary for a long period, which is why I strongly welcome it. I thank the Government for putting the clause into the Bill.
Mr Matthew Green (Shadow Minister, Office of the Deputy Prime Minister Local Government & the Regions; Ludlow, Liberal Democrat)
I was not going to speak, but the hon. Gentleman reminded me of a different and in some ways less severe situation in my constituency.
Large parts of my constituency are not on mains sewerage. Householders can make an official request, with which Severn Trent has to comply in certain conditions, to bring mains sewerage into a village. In one village, Clumbury, trying to negotiate that process has taken two years. Some of the people who made the request had purchased their properties, but their sewage goes into a joint sewage outlet that is shared with properties that are still owned by the registered social landlord. In this case, the houses were sold off by the council and South Shropshire housing association.
Through no fault of anyone concerned, there is an intractable problem in Clumbury. The local residents, the housing association and Severn Trent are locked in a sort of Gordian knot that I have attempted to cut, although I have not succeeded in doing so. If better information had been available to tenants when they
bought those properties about what their ongoing liabilities were in terms of sewage, many of the problems that have emerged and are affecting other householders in relation to the provision of mains sewerage in the area—
Mr John Hayes (South Holland and The Deepings, Conservative)
Reluctant though I am to interrupt the hon. Gentleman's travelogue of the sewers and cesspits of Ludlow, is he not implying, rather as our very own Jeremiah from Bolton has, that the information provided to people would deter rather than encourage them from buying houses? Is that not his intent and that of the hon. Member for Bolton, South-East?
Mr Matthew Green (Shadow Minister, Office of the Deputy Prime Minister Local Government & the Regions; Ludlow, Liberal Democrat)
No. The hon. Gentleman is completely wrong. In the circumstances that I described, separate provision for sewerage might have been made. Most of the properties use individual cesspits—I shall not go into too much detail about sewage in my constituency, although I sometimes think that the hon. Gentleman speaks enough of it—
It being twenty-five minutes past Eleven o'clock, the chairman adjourned the Committee without Question put, pursuant to the Standing Order.
Adjourned till this day at half-past Two o'clock.