§ Mr. John FraserI beg to move amendment No. 5, in page 5, line 39, leave out 'nine' and insert 'four'.
In section 16 of the 1980 Act there are various periods of three months during which a tenant has the right to claim a mortgage or deferred purchase. There is also a three-month period for local authorities giving notice. The Government propose to extend the three-month period to nine months. That is an extraordinarily long time for giving completion notices and so on, and bears no relationship to arrangements that might exist in private sector conveyancing.
The clause gives the tenant an incentive to go for as long a delay as possible. That, in turn, involves a cost to the public purse. For example, if one could couple two nine-month notices under section 16 of the original Act, it might well delay the time between service of a notice and completion by 18 months, or possibly even two years. During that time the value of the property could rise. There is also a loss to the public purse. It should be borne in mind that in the forthcoming rate support grant settlement the Government are cutting the real expenditure of local authorities by about 3 per cent. and the real expenditure of boroughs such as Lambeth by about 9 per cent. The amount of money available to local authorities means that there is a lot of pressure on them. It seems wrong that in a Bill that involves the right to buy and massive discounts there should be a machinery of delay which can work only to the disadvantage of the local authority and all its ratepayers. There is no case for putting a premium on delay, and that is why I commend the amendment.
§ Sir George YoungAs the hon. Member for Norwood (Mr. Fraser) knows, the present minimum period of notice 512 is three months. That is specified in section 16(3) of the 1980 Act. However, we have found that there are many cases in which that does not give the tenant enough time. We have also found that there are many cases in which the tenant is done out of his right to buy by an unreasonable use of the time limit. Not all landlords have been reasonable in their use of the present provision That is why, under clause 5(3), we have decided to increase the three-month minimum to nine months.
The Opposition appear to agree that the present minimum time of three months is insufficient. They have simply suggested four months. There is a difference of opinion as to how long the tenant should have before completion procedures may be started against him. It seems to me that nine months is an entirely realistic timescale when we contemplate the importance of the decisions that the tenant has before him. Both he and his solicitor will have to consider all the terms of the transaction, including the reasonableness of any service or restrictive covenants. Mortgage finance will almost certainly need to be arranged. Eventually, the tenant must make up his mind whether to proceed—possibly one of the most significant commitments that he will ever enter into.
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Many landlords have taken in excess of two years to complete sales, yet we are being asked to give the landlord power to impose strict time limits on the tenant. The Bill is about the rights of tenants to purchase their homes. That is the principle underlying the provision of clause 5. The extension of the minimum period to nine months and the other provisions of the clause are designed to ensure that the tenant has sufficient time to enter the home ownership market fully aware of all the relevant facts and without being forced to take hasty decisions. Why put pressure on him? There is no loss to the landlord in what we are proposing; indeed, clause 5 as it stands will be of real help to landlords in enabling them to deal with "dead" applications after the expiry of the time limits. That is real advance on the present provisions. We spent some time on that in Committee.
It comes down simply to a question as to by how much the minimum period should be extended. We prefer to give the tenant the benefit of the doubt and extend it to nine months. For those reasons I ask the House to reject the amendment.
§ Amendment negatived.