HC Deb 24 October 1972 vol 843 cc1147-58

10.59 p.m.

Mr. Peter Hardy (Rother Valley)

Some hon. Members might feel that Rother Valley has comparatively little to complain about. Local authorities in my constituency have been carrying out their responsibilities very successfully for a long time. There are no lengthy housing waiting lists, and the slum clearance problem is largely resolved. Nor is there any acute shortage of land. Indeed, in my constituency a large number of people from neighbouring areas have been accommodated in new housing estates. This presents problems of establishing character and relationships in the expanded villages, but they are not problems which Parliament can act directly to resolve at this stage. But we face serious problems, many of which reflect our national needs. I shall try to cover some in my speech. As there is quite a lot to say, I trust that the Minister will forgive me if I travel quickly.

My area has felt the pain of severe inflation and, most of all, it has hurt the younger couples seeking their own houses, many of whom have had unpleasant experiences. I refer to the case of Mr. John Shaw and his fiancée, Miss Evans. Their case was brought to my notice by Mr. Brian Longworth, an able and experienced reporter of the South Yorkshire Times. Miss Evans opened her local paper one day and saw an advertisement for an older house in the Kiveton Park area at a price of £2,700. She immediately telephoned the estate agents, Messrs. Portfield and Garratt, of Sheffield, to express her interest in purchasing this house. She made an appointment to see the agent. On keeping that appointment both she and her fiancée were told that there had been another bid of £2,800 and were asked if they would like to offer another £100. They did so. They were then informed that this other bidder had offered £3,100, asked if they would like to bid more, and were told the other bidder was prepared to go up to £4,000. They declined, quite properly, to bid any higher price. The agent said that he was very sorry and would let them know should anything else turn up in their area.

Ten days later the same house was advertised in the local Press, due to cancellation, for £2,700. No one contacted my constituents. This seemed odd both to the local reporter and to myself, and I wrote to Mr. Coyle, the estate agent.

Some weeks elapsed and I had not received a reply, so I telephoned him and asked if his firm was a member of the National Association of Estate Agents. He told me that he did not think there was such a body and asked who I was. When I told him, he said he thought that that organisation had collapsed. I then reminded him that I had not received a reply to my letter, and this was promised. When it came it confirmed a good deal of what Miss Evans had told me, but did not refer to the fact that Miss Evans was the first to respond to the advertisement and it appeared critical of her speaking to the Press. I should make it clear that Mr. Longworth, the reporter, acted very properly and in the best traditions of responsible journalism. Indeed, nowadays one looks more and more to the responsible local weeklies for maintaining the best traditions of Press activity. I sent a second letter to Mr. Coyle. This has not yet been acknowledged.

It is not surprising that there is an increased demand for the licensing of estate agents and for the application of a professionally administered code of conduct. Sharks have to be dealt with. I hope the Government will urgently consider encouraging this development. Estate agents can too easily benefit excessively from rapid inflation. Perhaps this explains the increasing use of false actions, of houses being withdrawn at the top bid, that top bid being used as the basis for subsequent advertising.

Just as one can be critical of some estate agents, so some building contractors can be found at fault. F. P. Staveley, Ltd., has built many houses in my constituency. The houses may be very satisfactory, but some of my constituents have been much aggrieved in recent months. Mr. Wasteney of Aston ordered a house in April and was told that the price might shortly be increased by about £100. On 15th May this young social worker was told that there would be a 15 per cent. Increase, £610, and that another increase would be likely three months later. Reference was made to the building workers' wage claim, which was some three months away.

When I took up the case I made a mild and responsible public statement and also wrote to the Minister. Then Mr. Wasteney received a letter from the managing director of this firm, which I regard as extremely bullying in tone, asking for a reply very quickly, or there would be an assumption that he no longer wished to purchase this house. I found this action rather offensive, if it did not quite tread on the dangerous ground of interfering with my constituent's rights to approach his Member of Parliament.

To confirm Mr. Wasteney's experience, a Mr. and Mrs. Bland, my constituents, reserved a plot from Staveleys on 10th February. They were told that there would be an increase of about 5 per cent. In fact, they learned next of a rise of £150, but were promised, or there was a suggestion at least, that there would be a fixed price offered in June. They were then told of an increase of £610 in June and that another increase would apply in October. By then, Mr. and Mrs. Bland had sold their previous house and had moved to live with relatives, so that their very young child should not have to transfer schools. They now watched prices rocket faster than they could save. This must have been a frequent and costly experience during 1972 for many young couples.

I was then informed of another case in which Staveleys tried to wriggle out of what I considered to be a fixed price contract. I gave suitable advice to my constituent in this case. If this firm conducts itself in future as it has done recently, I hope that it will not lay another brick in my constituency.

Now, another case has cropped up, involving a constituent of my hon. Friend the Member for Bassetlaw (Mr. Ashton), who is trying to purchase a house in my constituency. The buyer is supposed to be protected by a National House-Building Registration Council contract. In practice, this appears much less effective than may be supposed. Clause 14 of the contract states that the builder can charge a net increase where the cost of materials and labour rise.

The builders, Dernie and Bell, Sons and Co. Ltd., of Worksop, have asked for an increase of over 22 per cent., but will not explain how that increase is composed. This is not in accordance with the spirit at least of the NHBRC's arrangements. The Government should intervene and insist that this scheme should be properly and fully implemented. Some sharp and doubtful practice might then be stopped.

Inflation has affected not only the private house buyer but the local authorities as well. The able and experienced councillors and officials of Rotherham rural district have been horrified by the fantastic increase in the cost of house improvements. We are moving forward with these schemes and we welcome the 75 per cent. improvement grants. Unfortunately, this extra concession is accompanied by a deadline operation, which reduces the local authorities' bargaining power. Therefore, it increases the cost of the improvements. In the Thrybergh-Dalton area of my constituency, many houses are being improved The first batch were arranged at a cost of £1,590 in September, 1971. The next batch, in March this year, were to cost £2,315. By the summer, this price had risen to £3,036, and the latest lowest tender received by the rural district council for similar houses is about £3,900.

That is a shocking rate of increase. The council will fight to reduce these figures, but the effect of the deadline is regrettable, and reduces the council's capacity. I would therefore ask the Minister to take urgent steps to remove that deadline before further public money is thrown away.

Indeed, if we do not remove the deadline, it will be clear that it would have been cheaper to have pulled the houses down and replaced them rather than spend these vast sums on providing unnecessary profits and great anxiety for the council.

The same council and many others, including Maltby in my constituency, has been caused grave embarrassment by the ridiculously unreal attitude where the Government's building cost yardstick is concerned.

In Swallownest the Rotherham Rural District Council plans to build 56 bungalows and a warden's house, but the lowest tender is greater than the Government's yardstick. This is preventing the council from making progress. It will make it impossible for the council to live up to its splendid record in providing for its older people and in the end it will cost a good deal more money. In Maltby, the authority has a splendid record and the problems of slum clearance and general need are just about resolved. The council decided that its current waiting list could be cleared by the building programme now planned. Therefore, the council decided to sell council houses. However, that co-operative response is receiving cavalier treatment from the Ministry, because the building programme, upon which the whole strategy of the council depends, is now threatened as the Government will not allow it to build as the tender is slightly above the Government yardstick. That yardstick needs to be amended very urgently.

One or two other changes need to be made. I am unhappy about the operation of fair rents in my constituency. We know that there is the unjust and inflationary effect upon the public sector, but there are areas of the private sector where the effect is disadvantageous. In one parish a London property company bought some old houses for about £400. It has spent about £1,000 in improving them. It has received a 75 per cent. grant. The total investment in each of those houses is about £1,400 or £1,500, but public funds have provided over half the value of that investment. However, the fair rent ignores the public contribution and the tenant has to pay twice, as a tax payer and as a tenant. It seems that that is unjust.

In the Wickersley and Becks area of my constituency, there are hundreds of houses which were built by a local man in about 1931. Soon after my election I discovered that fair rents were being registered for these houses whilst at the same time the owner was receiving a subsidy under the provisions of the Housing Act, 1924. I also discovered that these houses were not to be included in the fair rent scheme. Registration of those rents was then cancelled. However, the day after the 40 years of subsidy have ended, the fair rents can be re-registered, and once again the public element in the investment which those houses represent is entirely ignored. That seems to be unjust and it rankles among hundreds of tenants in my constituency.

We have our problems in the Rother Valley, and they are not eased by firms which believe that the public should act as the silent goose which must lay ever larger golden eggs. We still have some old houses, bad landlords and bad agents. I wrote courteously enough to a firm of solicitors in Sheffield about the need to repair an old house at Fence. That letter has not been acknowledged. However, fortunately I can rely on the vigilance and consideration of my local council, which will take action to resolve that matter.

Unfortunately, councils cannot prevent inflation. The young couples who have bought their houses will have to suffer the consequences of inflation for a long time. That suffering might assist their beneficiaries, but they face many years of hard domestic struggle as the mortgage dominates their lives. One of the Government back benchers in the Housing Finance Bill Committee suggested that that struggle was good for the soul and that somehow one's character was ennobled. I do not believe that hair shirts should be fashionable. Self flagellation should have departed from the British scene many years ago.

Those who strained to buy their house were caused a little strain by the recent increase in the building societies' interest rates, and they are anxious about the future, about the possibility that those interest rates can soon become even more vicious. I am anxious about the suggestion that interest rates in Europe are higher than those here. If economic harmonisation occurs, that might exercise an upward influence on interest rates in this country. In a constituency like mine where wages are below the national average, an increase in interest rates could lead to personal calamities. I hope that I shall receive an assurance that that will not be allowed to happen.

I have been critical of the Government and I realise that I have covered a wide range of housing matters. It is proper for me to say that I do not hold the Under-Secretary of State personally responsible for all these problems, many of which occurred or commenced before he took office in the spring. I know that the hon. Gentleman has showed some sympathy for some of the problems which I have presented to the Ministry, although I have not had many satisfactory answers. However, I am sure that he will agree with me that the matters raised are serious and that his is not an unreasonable detention. I hope that the hon. Gentleman will be able to provide hopes and assurances which will be of real and relevant value to Rother Valley.

11.15 p.m.

The Under-Secretary of State for the Environment (Mr. Reginald Eyre)

I am sure that the House will join in acknowledging the deep personal interest which the hon. Member for Rother Valley (Mr. Hardy) shows not only in the housing problems of his own constituency but in the wider aspects of housing. This is indicated clearly tonight by the number and range of the points he has raised. I will do my best in the time available to deal with them, but he knows that if there are any points outstanding I will certainly be prepared to discuss them or to write to him about them.

Let me first take the hon. Member's remarks about estate agents. This is, of course, a matter for my right hon. Friend the Secretary of State for Trade and Industry who has, I know, had representations from various sources about the registration of estate agents. I am sure that he will have taken particular note of what the hon. Member has said on this subject tonight.

Gazumping is a matter which concerns me very closely, and particularly its effect on younger couples. We all sympathise with those who have been asked for a higher price after making a decision to buy, and I certainly hope that the hon. Member's constituents have been or will be able to obtain a suitable house. I have always felt, too, that in spite of the publicity rightly given to the bad cases, most transactions have gone through in an agreeable way. The best practical answer to this kind of situation is to increase the supply of houses for sale, and I believe that this is happening. Certainly the Government have brought about a very substantial increase in the supply of new houses, with 43 per cent. more private houses started in the first half of 1972 as compared with the first half of 1971.

As to the general procedural problem about the position of buyers and sellers of houses between the provisional agree- ment of price and the exchange of binding contracts, the House will know that my noble Friend the Lord Chancellor has referred the conveyancing aspect to the Law Commission to see whether it can suggest some change in law or practice which would improve the situation. The Commission's reported is awaited.

The hon. Member referred to a problem which his hon. Friend the Member for Bassetlaw (Mr. Ashton) wished should be raised. I am sorry to hear of the difficulty of the hon. Member's constituents with regard to this NHBRC contract. From my own experience, I know that the National House-Building Registration Council is most helpful in dealing with problems that arise under these agreements, and that as far as is legally possible it will do all it can to help.

Mr. Joseph Ashton (Bassetlaw)

On past occasions, the Council has said that it will not take part in any dispute on price. Could the Minister not look at one aspect of the contract where the increase in price should be broken down? Builders refuse to break down the reasons for increase in price with regard to materials and labour.

Mr. Eyre

In the main, that involves arrangements between vendor and purchaser, but I will certainly ask the Council to look critically at the aspect to which the hon. Member refers.

I am aware that the rising cost of house improvement work both in the hon. Member's constituency and elsewhere in the country has been causing concern. I share this concern. Indeed, it was because of representations made on this point by both local authorities and builders that my right hon. Friend announced on 21st April that the provisions of the Housing Act, 1971, which give higher rates of improvement grants and Government contributions to local authorities in the assisted areas, were to be extended by one year to 23rd June, 1974. I believe that this has helped to take the immediate heat out of the situation and to assist in stabilising prices.

When my right hon. Friend made the announcement on 21st April of the year's extension, he stressed that this was a once-for-all extension and he emphasised the necessity for all concerned to press ahead as fast as possible if the maximum advantage were to be derived from the increased grants.

The hon. Member may have it in mind that the grant limits are no longer high enough and that, given the recent increases in building costs, local authorities in particular ought to qualify for a higher maximum Government contribution towards the cost of improving council houses. I know that there are particular difficulties in the case of the Whinney Hill improvements, on which my officials and the local authority have had several useful discussions. My officials will continue to be available to the local authority if it thinks it would be helpful.

The hon. Gentleman referred to fair rents for property which has been improved and after improvement grant has been paid. I believe that he is in danger of confusing two separate matters. First, the payment of grant will ensure that the accommodation is brought up to good standard. I am sure he is not suggesting that tenants should continue to live in unsatisfactory accommodation. As to the rent which a tenant should pay, the principle is the fair rent, whether the accommodation has been improved or not, and, of course, any tenants who cannot afford it can get a rent rebate or allowance.

The hon. Gentleman made a further point about fair rents in respect of houses which have had subsidy under the Housing Act, 1924. He has questioned this before and his point has been fully considered. The position is that, once subsidy has ceased, any condition as to the rent ceases to have effect and an application for the registration of a fair rent will be entertained in the usual way. I am sure that this is right.

The purpose of the fair rent is to see that resources are available for the continued maintenance of the house in good order and it is in the interests of the tenant that this should be so. In these circumstances, I feel that the present situation in the fair interests of tenant and landlord is correct and right.

In dealing with interest rates the hon. Gentleman raised a point of wider economic implications. He expressed concern about interest rates for house purchase in relation to the EEC. As he understands, interest rates for house purchase will continue to depend in our own domestic market on the general level of interest rates. The vast majority of house purchasers have always relied on the building societies for advances, and I am sure that this will continue. Building societies raise the funds they make available to borrowers largely from individual investors and, of course, have to pay an appropriate rate of interest. The rate they charge borrowers on mortgage advances is set accordingly.

I am grateful to the hon. Gentleman for having raised this matter and, as I have said, if there is continuing difficulty in a practical respect in which I can help I shall be only too glad to do so. I should like him to see the perspective of matters in his region. As he fairly acknowledged, great progress is being made in dealing with many of these problems.

Mr. Hardy

The hon. Gentleman has not touched on the question which so largely concerns our progress—the question of the building costs yardstick.

Mr. Eyre

I apologise for omitting that point. The hon. Gentleman asked, by implication, why the yardstick has not been increased to take account of recent wage settlements. The fact is that builders have known for some considerable time now that there was likely to be an increase in wages in the industry. And, since all tenders are forward looking they have, during the same period, had to make some allowance for this—on the basis of their best commercial judgment—in their tender prices. Similarly, the cost yardstick—which is continuously monitored against tenders coming in, and which was last increased in May of this year—has taken some account of the effect of the likely increase in wages.

It remains to be seen, however, exactly what effect the wage settlement will have on tender prices. My right hon. Friend the Secretary of State is watching the situation closely the yardstick is kept under continuous review.

I appreciate the importance of this on a practical basis and I assure the hon. Gentleman that great care and consideration are being given to this matter. As I think he will acknowledge, there has been a great improvement in housing conditions in his region. I acknowledge, of course, that there is much to be done. We would like to see more private development taking place to match the needs particularly of the young couples to whom the hon. Member referred.

There is still much work to be done in the continuing improvement of older houses and slum clearance and building for those who are in need of housing for rent. All these present continuing major problems and the Government are glad that by their policies—and I stress the benefit that will come under the Housing Finance Act in due course—resources will be channelled to help the authorities in need in dealing with the problems of slum clearance and building houses to rent where there is true need.

The sum total of the Government's policies by way of improvement grants, by way of the extra resources which will be available to local authorities in need and by way of stimulating continuing development of private housing particularly to match the requirements of young couples, will bring about a considerable social improvement in the region. Nevertheless, I concede that the hon. Member has the right to bring forward strongly any difficulties and I promise him that the Department will do everything in its power to assist in coping with those problems.

Question put and agreed to.

Adjourned accordingly at twenty-six minutes past Eleven o'clock.