HC Deb 28 March 1973 vol 853 cc1303-4
30. Mr. Lamborn

asked the Secretary of State for the Environment whether he will take steps to ensure that rent scrutiny panels, in fixing rents for accommodation, have regard to the percentage below market valuation which the local authorities concerned are charging tenants who wish to purchase comparable homes.

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

No, Sir. The principles on which fair rents are to be determined are laid down by statute. But in any case local authorities sell their houses at market value.

Mr. Lamborn

Does the hon. Gentleman recognise that, in view of the tremendous escalation which has occurred in property prices, if local authorities are to sell houses they will find it necessary to charge less than the market price—and, indeed, that the Greater London Council has applied to sell at 30 per cent. below market value? Does this mean that we are moving even further along the road towards two nations in housing? Is not the situation discriminatory against those who occupy rented accommodation?

Mr. Eyre

No, Sir. The hon. Gentleman is mistaken in his assumption. The price at which local authorities sell houses is the market value. This may be either an unrestricted open market value, where no resale conditions are imposed, or a restricted market value which reflects the offer-back conditions which are imposed.

Mr. Freeson

I do not wish to pursue the hon. Gentleman harshly on this point, but I think he is confusing the House in the light of the recommendations, advice and circulars put out by his Department to local authorities on the sale of council houses. He said that councils are selling property at market level subject to various conditions. Will he make it clear, on the advice of the Department and on the basis of authorised schemes approved by the Department, that local authorities are fixing given percentage discounts of 20 per cent. or 30 per cent., which will reduce the price at which these houses will sell to below the market level?

Mr. Eyre

The hon. Gentleman will appreciate that a sale is sometimes effected without restriction, in which event the market level applies. But when restrictive conditions are imposed the market value is reduced on account of those restrictions, since the property subject to those restrictions has a market value which is reflected in the price.