Mortgage Repossessions (Protection of Tenants Etc.) Bill

Part of the debate – in the House of Commons at 11:06 am on 29 January 2010.

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Photo of Stewart Jackson Stewart Jackson Shadow Minister (Communities and Local Government) 11:06, 29 January 2010

The hon. Gentleman invites me to meander along a path that would take in a review of the housing revenue account and housing benefit. I shall resist the temptation to tarry with him, even though he is an expert on social housing, but I am sure that the Minister heard his suggestion.

The problem is aggravated by Financial Services Authority rules, which force lenders who are repossessing a property to market it as soon as possible and to obtain the best price that might reasonably be paid at the time.

On a related note, I should mention that the Bill is a welcome step for landlords as well as tenants. It is vital that we support the private rented sector in increasing general housing supply. This is particularly true where that would bolster social housing, which is under severe pressure from a social housing waiting list that has nearly doubled to more than 1.8 million families under this Government. That is a direct result of their failure to build enough social homes. The Bill will tackle a problem that the Residential Landlords Association believes brings

"the private rented sector into disrepute".

More and more, the private rented sector is providing homes for the less well-off and those who cannot afford to buy, so it hardly helps the sector if tenants cannot feel secure in their homes.

The proposed approach should also be a welcome move for lenders. As the Royal Institution of Chartered Surveyors has pointed out, the two-month period will not add an excessive delay to the system and the lender will still be able to sell the property after that period. Banks are looking for certainty, and want to know that they will be able either to sell a property or to build up a portfolio of property for rent. The certainty of a two-month period will also allow a value to be placed on delays.

There are a number of issues with the drafting of the Bill that it is apposite to examine, and no doubt that will happen during the course of its passage. Parts of it need to be debated and scrutinised more closely. For example, we need to examine whether the Bill applies not only to conventional mortgage possession proceedings but to independent proceedings brought by a lender against a tenant. Bob Spink-my erstwhile hon. Friend-mentioned that point earlier. We should also ascertain whether it is appropriate that the notice to the tenant occupier should be sent by the lender and not by the court service. That point was raised earlier by my hon. Friend Philip Davies.

We also need to ascertain how we can get past the data protection legislation issue, which the Council of Mortgage Lenders reports is a practical difficulty facing lenders. Also, would the Bill place an onus on unauthorised tenants who receive notice of possession to apply to court at the possession hearing stage and not to delay, knowing that clause 1(4) can be relied on?

All those issues are by no means insurmountable, and I am confident that the Bill can be refined and improved in Committee. We trust that the Government will pay due regard to the potential amendments to clause 1(4) suggested by the Council of Mortgage Lenders and the potential amendments to clause 1(7) suggested by the Residential Landlords Association. I got the impression that the hon. Member for Bolton, South-East is amenable to a fuller debate on those specific issues.

Given that repossessions are predicted to rise to 53,000 in 2010, this private Member's Bill is an essential piece of legislation that has been necessary for some time. It has only just emerged that we have crawled out of recession, but that does not mean that the threat of repossession will go away for many in the private rented sector. Although the majority of tenants, particularly those in buy-to-let properties, should expect to be protected from sudden eviction by lender good practice, it is important that a legal minimum exists for those tenants who are not. As the housing market starts to improve, any recovery is likely to be followed by interest rate increases, which may make some mortgages more expensive. There is a possibility that that will lead to investors being unable to afford property and to more tenants having to leave their homes. Thus, as hon. Members have made clear, there may be perverse consequences to improvement in the housing market.

In conclusion, we strongly welcome this Bill-it is the right way to proceed-and it has genuine cross-party support and support in the housing community. I commend the hon. Gentleman and, if I may say so, this will be a fitting tribute to his dedication, hard work and knowledge in this area. In case we do not have the opportunity to cross swords before the general election, I shall now wish him well in his future life.