HC Deb 20 June 1967 vol 748 cc1583-6
Mr. S. C. Silkin

I beg to move, Amendment No. 107, in page 24, line 46, to leave out subsection (1)(a).

The provisions of the Clause as they stand relate to the alternative possibility of obtaining an extension of 50 years, and provide for certain limitations upon that right. They provide in particular in subsection (1,a) that although a tenant who has exercised his right to extend may acquire the freehold if he wishes, that power will be subject to his giving notice of his desire to do so not later than the original term date of the tenancy.

The purpose of the Amendment is to remove that qualification upon the lessee's right to obtain the freehold after having exercised his right to extend, so that if the Amendment is accepted he would be in a position to obtain the freehold at any time up to the end of the extension. The problems that arise out of the leasehold system which have given rise to the provisions of the Bill include in particular the deterioration which so often sets in in property once the "fag end" period of a lease is reached, when it is difficult if not impossible to obtain mortgages, and when the premises often pass into the hands of people who are not prepared or able to spend money on their maintenance and improvement. It is for those reasons, among others, that the Bill rightly provides the power to enfranchise as an alternative to the power to extend the lease.

It is believed that, given the situation of owner occupation and the right and ability of the new owner to obtain a mortgage, people will be encouraged to improve and properly maintain their property and, as a result, our housing stock will be preserved much better than at the present time. I personally conceive this to be one of the major benefits which the Bill will produce.

We are saying that if a lessee exercises his right to extend then, although he can still obtain the freehold, he cannot do so once the original term date has passed. If he fails to do so within that limited period we shall be putting off for an additional 50 years the evils we are seeking to cure by virtue of the provisions of the Bill. I can see no reason, either in equity or from a practical point of view, why that limitation should be imposed.

We should be in a much better position to preserve our housing stock for the future if we enabled the lessee, even after he has exercised his right to extend and even after the original term date has passed, nonetheless to obtain the freehold. His right to do so in those circumstances would be subject to the other provisions of this part of the Bill which enable the landlord, once the right to extend has been claimed, to step in and say, "I want to redevelop". If the landlord can satisfy the court that he has that intention he can get his property back. Subject to that right, which I would preserve, I can see no valid reason why the lessee should not, at any time during that 50 years extension, obtain the freehold and give to the property the benefits that owner occupation undoubtedly would produce. This is the kind of proposal which I would have thought would be welcomed by right hon. and hon. Members opposite who set such great store by the advantages of owner occupation. Therefore, I very much hope to have their support and a sympathetic hearing from my right hon. Friend.

Mr. Willey

I must be very careful. There is a good deal in what my hon. and learned Friend has said, but I did not like his appeal to the right hon. and hon. Members opposite to support him, because I might advise him to withdraw his amendment, whereupon they would no doubt force a Division.

I recognise that there is a valid argument for the extension of the right to enfranchise after the termination of the original lease. However, we made it plain in the White Paper that the right to enfranchise should be at any time during the original term of the lease.

12 m.

Secondly, pursuant to the White Paper, we have given two specific rights to the leaseholder which are exercisable during the term of the original contract between the parties. As my hon. and learned Friend has said, one would have to provide for a conflict between the rights of the freeholder and those of the leaseholder. Finally—this is rough and ready —the period of 50 years has been selected to ensure that ordinarily the lease runs for the profitable life of the buildings.

For those reasons I am unable to accept the Amendment, although I recog- nise that my hon. and learned Friend has advanced cogent reasons for such a provision during the period of extension. It is our view that we are providing these two specific rights to the leaseholder and that they should be provided in this final form.

Amendment negatived.