Leasehold Reform

Part of the debate – in the House of Commons at 12:00 am on 28 February 1966.

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Photo of Sir Raymond Gower Sir Raymond Gower , Barry 12:00, 28 February 1966

Nevertheless, leases in Scotland were, in effect, brought to an end.

Paragraph 1 of the White Paper refers to an occupying leaseholder who at the end of the term has lived in it for a period of years regards it as his family home. This is true in the parts of Wales to which I have referred, where leasehold properties form the preponderant part of the dwelling houses. I go further than the White Paper in commenting on the situation in South Wales. In areas where 70 per cent., or 80 per cent., or possibly even 90 per cent., of all houses are leasehold, it is natural that the owner-occupier should regard his house as the family home. In English towns, where freehold property predominates, the position may be different. A person who has acquired a leasehold property has probably made a conscious and deliberate choice. Few persons in Cardiff, Barry, Newport or Swansea could have made such a deliberate choice, because at one time nearly all the houses available were leasehold.

Paragraph 2 of the White Paper includes the interesting formula, subject to one or two reservations, already commented on by hon. Members on both sides, namely, that the freeholder is deemed to own the land, and the leaseholder the buildings on it. The criticisms made by my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) may not be acceptable to hon. Members on both sides, but the formula has some limitations, as was shown by my right hon. Friend's example of a valuable property like the Hilton Hotel where it is difficult to separate ownership. Nevertheless, I believe that if certain provisions could be made for special cases, the formula would provide a chance of finding a solution to a difficult problem.

I turn briefly to the qualifications prescribed in paragraphs 5 to 8 of the White Paper for those who will benefit from possible legislation. I think that the requirement that the original lease should have been for more than 21 years at a ground rent is reasonable. By far the majority of cases which we have in mind are houses on a 99-year lease.

I expect that the proviso that a leaseholder must have occupied the house for at least five years is accepted on both sides, and my right hon. Friend indicated that this was so. As has been pointed out, it is possible that this could lead to a few anomalies, but I hope that my hon. Friends who find fault with this paragraph will not for that reason alone reject the whole idea of a solution of our difficulties.

I can appreciate the difficulties which have led to the omission of flats, but I should not have thought that these were insuperable. All that is needed is a change in the law to enable freeholds of flats to exist. I appreciate that this has not been the case generally in England and Wales in the past.

In relation to the proposals for 50 years' extension of leases, for those who do not wish to spend capital sums to acquire the freehold, the term "modern ground rent" is used, and in his introductory speech the Minister referred to this. I am not trying to be hostile about this, but I submit that this term needs more accurate definition.

The inclusion of "development value" in paragraph 11 has also been mentioned. In some cases this formula could be open to criticism, but again I trust that those who have reasonable criticisms about this paragraph will not thereby be led to reject all ideas of reforming the system of leasehold.

I am glad that to a limited extent local authorities and various public authorities are brought within the White Paper, but, except in extraordinary cases affecting the provision of essential services, I would plead that the leaseholder of a house whose freehold is owned by such an authority should be placed in a similar position to a person who lives in a house the freehold of which is owned by an individual or a company.

In my experience leaseholders of local authority property have sometimes been in a worse position than other leaseholders because, certainly in Glamorgan, rightly or wrongly the county council has refused to sell, and it is no solace to a leaseholder to be told that he cannot buy it because the freeholder is the local authority. I hope that this paragraph is not so limited as it appears to be on first scrutiny.

I am not sure why the right hon. Gentleman has favoured the use of the Lands Tribunal. I am not hostile to the proposal, but he will recall that in other Rent Acts Ministers have preferred to use the county courts. He has not explained why another body is chosen on this occasion, and I hope that the Secretary of State will be able to refer to the point tonight.

I reiterate that hon. Members on both sides of the House should be glad that some progress has been made towards finding a basis for legislation—because that is how the White Paper is described. There are obvious divergencies of view among hon. Members on both sides of the House, but it is a sign that we have advanced a long way that this debate is not dividing us tonight, in the traditional manner, in the Lobbies.