DISPOSAL OF LAND BY REGISTERED HOUSING ASSOCIATIONS (Hansard, 19 May 1980)

§ Mr. Stanley
I beg to move, That the clause be read a Second time.

§ Mr. Speaker
With this we may take new clause 6—Consent of Housing Corporation to disposals of land by housing associations and trusts

§ Mr. Stanley
This new clause gives all housing associations registered with the Housing Corporation the power to sell. It applies to co-ownerships as well as to associations providing rented accommodation, and it applies whether or not the association is a charity.
It will be useful to non-charitable associations whose tenants will also have the right to buy because it will enable those associations to sell by agreement as an alternative to the statutory right-to-buy procedure if it suits both parties. It will also enable them to sell to any of their tenants who are excluded from the right to buy, if they so choose.
The main purpose of the new clause is to fulfil an undertaking that I gave on 30 January when I said that, in addition to giving the right to buy to the tenants of non-charitable housing associations, we should also give charitable housing associations, co-ownerships and co-operatives the power to sell if they wished.
I shall say something about each of these categories in turn. First, I deal with charities. We have decided, and clause 2 of the Bill reflects this, that it would not be possible to extend the right to buy to the tenants of charitable housing associations. These associations have a special legal position and have often 89 provided their housing with the benefit of private donations instead of with public funds. However, we think that it is right that charities should be able to sell to their tenants if they wish, and to do so at a discount. I emphasise that it will be for charities themselves to decide whether to sell any particular house or flat. If they decide to sell, it will also be for them to decide what discount, if any, they wish to offer, provided that it does not exceed the discount that would have been available had the sale been under the right-to-buy procedure. I hope, however, that charitable associations will give careful consideration to their use of their new ability to sell when tenants want to buy.
Secondly, I turn to co-ownerships, which are independent self-governing bodies. Although many were set up under the auspices of the Housing Corporation, and have received corporation loans, they have received no Government subsidy, apart from option mortgage subsidy. The corporation's loans to co-ownerships have always been at commercial rates. The self-governing nature of co-ownerships is incompatible with giving individual members the right to buy regardless of the wishes of the co-ownership as a whole. I have, however, received many letters from co-ownership societies and from individual members, the great majority arguing that co-ownerships as a whole should be able to sell and their members to become owner-occupiers. This clause makes this possible.
I am, however, very conscious that in some societies the great majority of members may be willing and able to buy their homes, while a few, perhaps elderly residents, who cannot easily raise a mortgage, will not be in the same position. Because of this, it is necessary to make the sale of properties in co-ownership societies subject to certain safeguards.
The first safeguard is that a decision by any society to sell property must be taken with proper participation by its members. This means that 100 per cent. of the members should have the opportunity to decide and that as far as posible they should all participate in the decision. Secondly, the majority, as defined in the society's rules, which will normally mean three-quarters of those 90 voting, will have to be in support of any decision to sell. Thirdly, consent for a co-ownership to sell will normally be conditional on the whole of a society's outstanding mortgage debt being repaid. This would normally lead to 100 per cent. individual ownership. The exception might be where co-owners who were unable or unwilling to buy could continue as a viable society.
Co-ownerships are self-governing bodies, and it will be for each co-ownership society to decide for itself how to distribute the liability for redeeming the outstanding mortgage debt amongst its members. As these dwellings have not been subsidised with public money, we do not propose to lay down any other conditions about sale price, apart from the obligation on the society to extinguish all outstanding liabilities.
Under new clause 6, the consent of the Housing Corporation is required for sales by a co-ownership society. The corporation will thus be responsible for seeing that the conditions to which I have referred are complied with and will also be in a position to see and approve of the arrangements made by each co-ownership—for instance, if there are members who are unwilling or unable to buy.
Finally, this new clause will enable cooperative societies to sell properties to their tenants. Under the Bill, the right to buy extends already to tenant management co-operatives and to co-operatives which do not have fully mutual rules. The reason it does not apply to fully mutual co-operative societies, all of whose members are tenants and all of whose tenants are members, is that, like co-ownerships, they are also self-governing bodies. However, there is no reason why they should not be enabled to sell to their members if they wish. If they do, the financial arrangements will be the same as those for charitable housing associations. Co-operatives will be able to sell at such discounts off market value as they choose, subject again to the restriction that discounts should be no greater than those on right-to-buy sales.
This is an important new clause, covering more than 200,000 tenants in all. It will help to extend home ownership and it will do so in a way that recognises the special status and organisation of the 91 different types of housing association, co-ownership society and co-operative. I hope that the House will be willing to agree to it.