Rents-to-Mortgages Scheme

Oral Answers to Questions — Environment – in the House of Commons at 12:00 am on 12th June 1991.

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Photo of Mrs Maureen Hicks Mrs Maureen Hicks , Wolverhampton North East 12:00 am, 12th June 1991

To ask the Secretary of State for the Environment what plans are being made to enable council tenants to convert rents to mortgages.

Photo of Tim Yeo Tim Yeo Parliamentary Under-Secretary (Department of Environment)

Experimental schemes are now in operation for new town tenants in Basildon and Milton Keynes. Primary legislation is needed to extend the rents-to-mortgages scheme to council tenants. We will consider this in the light of the results of the pilot schemes.

Photo of Mrs Maureen Hicks Mrs Maureen Hicks , Wolverhampton North East

Does my hon. Friend agree that allowing council tenants to buy their homes under the right-to-buy scheme was a very popular piece of legislation? We have given tenants what they want, but some tenants need further assistance. I welcome the experiment to date, and I hope that as soon as possible we shall extend the provision so that all tenants will have the opportunity to buy their homes.

Because of the Labour party's opposition to tenants, in often not wanting them to buy their homes, it has incorporated deplorable delaying tactics. Will the Minister ensure, if and when he introduces the legislation, that tenants can buy their homes immediately and that thousands of pounds of rent will not be wasted while the transaction is taking place?

Photo of Tim Yeo Tim Yeo Parliamentary Under-Secretary (Department of Environment)

I agree with my hon. Friend, who makes an important point. I am sorry to say that, even today, in the boroughs of Lambeth and Hackney disgraceful obstacles are put in the way of tenants trying to exercise their right to buy.

I am glad to say that the rents-to-mortgages experiment is going extremely well. I expect the first completions to take place later this month. It is an important extension of tenants' rights. I shall be interested to see whether the Labour party overcomes its hostility to allowing council tenants to become home owners more quickly under the rents-to-mortgages scheme than under the right-to-buy scheme.

Photo of Mr Clive Soley Mr Clive Soley , Hammersmith

Given that one in nine homeless families are in that position as a result of mortgage repossession, would it not be more intelligent for the Government, having created the housing crisis and lost 1.5 million tenancies from the rented sector, to introduce a mortgage rescue scheme? That has been suggested not only by the Labour party but by many housing experts outside. In doing that, should not the Government reform housing finance to make it easier for tenants not only to step up to home ownership but to step down again to renting when they find themselves in difficulties? Why does the Minister not end his desperate search for a policy, adopt our policy and use it sensibly?

Photo of Tim Yeo Tim Yeo Parliamentary Under-Secretary (Department of Environment)

The hon. Gentleman's grasp of housing issues is tenuous at the best of times, but this time he has allowed his prejudices to submerge his intelligence to an even greater extent than usual. It has obviously not occurred to him that the whole purpose of the rents-to-mortgages scheme is to avoid the circumstances in which tenants are tempted to enter into commitments that they cannot afford. The scheme will allow a tenant to purchase a share of his property, without increasing his weekly outgoings, by substituting for his weekly rental payment a weekly mortgage payment.

Photo of Peter Bottomley Peter Bottomley , Eltham

Will my hon. Friend consider suggesting to all housing authorities that they publish an illustrative list of flats and houses, with the prices that people would expect to have to pay, given the buyer's age, the valuation of the house or flat and the length of time for which the buyer has been a tenant, as many people do not realise that they could buy their flats for less than £17,000 and save money by so doing?

Photo of Tim Yeo Tim Yeo Parliamentary Under-Secretary (Department of Environment)

My hon. Friend has made an interesting point, and I shall certainly follow up his suggestion. It is clear that a significant number of people are still trapped in the tyranny of tenancy and would like to escape from it. If they understood the favourable terms on which the Government have made it possible for them to do so, I am sure that they would take advantage of the opportunity.