PROTECTION FROM SLUM LANDLORDS BILL (Hansard, 26 June 1974)

§ Mr. Kevin McNamara (Kingston upon Hull, Central)

I beg to move, That leave be given to bring in a Bill to prohibit the sale by rental-purchase or otherwise of residential property which has been designated as being within an area where properties are subject to compulsory purchase orders or where the local authority is unable to grant a home improvement grant by reason properties are subject to compulsory purchase of the life expectancy of the property; and to make miscellaneous provisions regarding the renting of similar property. The rental purchase of houses is the system whereby property which is normally subject to rent control and which is not usually eligible for finance for purchase from customary sources, such as building societies and local authorities, is sold by a system of weekly payments, sometimes including the payment of a small deposit—rarely more than £100, and often much less.

The system is widespread in such cities as Liverpool, Manchester and Hull and parts of Scotland. I am indebted to my hon. Friend the Member for Edinburgh, Central (Mr. Cook) and to Shelter, Scotland, for information concerning this racket in Glasgow and Edinburgh.

It is not a new phenomenon in the North, although it is spreading rapidly because of the cut-back in both public and private house building over the past few years. It has helped in part to supply cheap housing and to give people an opportunity to acquire their own homes. That is the only justification or defence of the system.

In fact, we are concerned today with property owners and agents dealing with miserable properties, selling substandard accommodation, often on onerous terms, to the poor and the young, often very young married couples desperate for a home, people who have fallen on bad times, people not used to consulting or even knowing solicitors, and desperately quick to grab an opportunity to secure a roof, albeit a leaky roof, over their heads—people, in short, who are easy prey for the unscrupulous.

The properties sold are in areas likely to be subject to compulsory purchase orders, if not areas already so subject, designated, or presented to the Minister 1574 for confirmation for compulsory purchase orders.

A case in my own constituency will illustrate the problem. A Mr. and Mrs. Leonard, of 20, Holme Street, approached the Welfare Rights stall in Hull Market run by students from the university, who referred the case to me. The tatty document which I am holding is a copy of the form of an agreement given to my constituents. It contains the terms upon which they were to purchase the house by weekly instalments. The price is shown as £550, payable at £2.50 a week. On 21 days' default in payments, the outstanding balance becomes due, and if it is not paid the landlord may repossess. The purchaser is responsible for repairs, rates, drains, sanitary fittings and so on. There is no right to sublet unless the balance of the purchase price is paid. Of course, there is the customary fire insurance. There is a final clause, to which I shall return later, which says: The Vendor agrees that if the property is acquired by the Hull Corporation on a Compulsory Purchase Order the above agreement will be cancelled and will become null and void and the Purchaser agrees that the Vendor will be entitled to claim all compensation". The rent officer was telephoned for his assessment of a fair rent. He said that on a similar property it was about £1.85 and certainly not more than £2. My constituent is paying £2.50. I wrote to the vendor, William Isaac Estates Ltd. at The Boulevard, Hull, asking it to explain the agreement to me. The director replied saying that I had written him an offensive letter. I find that surprising because I thought that in the circumstances my correspondence was rather mild. He said: I am a lifelong Socialist"— with friends like that, what need have we of Wedgie?— and have helped numerous couples to obtain accommodation. With regard to your comments about the way the property was sold, in that we were no longer responsible for repairs, etc., I would once again offer my advice in asking you to check with other property people in this city, when you may learn that this method of sale has helped many thousands of young couples to become property owners on simple no-deposit terms, and if you were a local man you would know of this. I confess that I have lived in Hull only since 1952.

I now turn to the clause concerning compulsory purchase, to which I referred 1575 earlier, to see how the firm helped my constituents to become property owners. Concerned about their situation, my constituents went to Hull Corporation to discover their chances of being rehoused by the corporation. They were told in a letter from the director of housing: I note that you took up possession of the dwelling you now occupy after the confirmation of the above Compulsory Purchase Order. That is, the house was in a compulsory purchase order area. I would advise you that this order was confirmed by the Secretary of State for the Department of the Environment on 20th March 1973 and a Notice to this effect was published in the Hull Daily Mail on 30th March 1973 As you took up occupation after the former date I must advise you that the local authority is under no obligatoin to offer you alternative accommodation. The form of agreement was signed on 23rd June, three months after the confirmation of the compulsory purchase order. So much for Messrs. Isaac helping my constituents to become property owners!

I wrote to the firm, as lifelong Socialists, in April, asking it to explain this apparent anomaly. I still await a reply.

It may well be that the agreement is not binding in law, and that any solicitor could drive a coach and horses through it. But that is not the point. It is the sort of agreement being given to people in desperate conditions, not knowing what they are signing, people who are the prey of unscrupulous landlords. In that situation, the House needs to act.

I sum up the position. The landlord is in the following situation. He has evaded rent control and his common law and statutory obligations for repairs. He is under no obligation to rehouse the 1576 tenants. There is possibly tax evasion, because of the system of repayment of capital. All this is done at the expense of the poor and the homeless.

My Bill would outlaw some of these alleged conveyancing practices and prevent the sale of properties for habitation without (a) a certificate of good repair from the local authority or (b) an undertaking from the local authority that the property is, or is assumed to be, lacking in a basic amenity and will, therefore, qualify for an improvement grant. That would guarantee the property a certain lifetime. Further, restrictions would be placed on the reletting of properties subject to compulsory purchase orders and effected after the confirmation or presentation thereof.

This is an opportunity to strike a blow against racketeers operating just within the law at the expense of the needy and defenceless.