Co-ownership of Flats (Hansard, 10 May 1983)

§ Sir Brandon Rhys Williams (Kensington)

I beg to move, That leave be given to bring in a Bill to give powers to residents of purpose-built blocks of flats in private ownership jointly to purchase the premises of which their flats are part; to specify the procedures to be adopted; to make consequential provisions as to the management and upkeep of premises so purchased; and for connected purposes. The Bill is of importance for Londoners and of special significance for people living in the part of inner London that I have the honour to represent. There are two reasons why I believe that the House should approve the Bill. First, it should do so because it is a matter of simple justice. Some years ago the House was disturbed by the problem of people living in houses on long leaseholds and adopted the principle of leasehold enfranchisement. Under the present Government, I am glad to say, we have extended the principle of home ownership and made it possible for people living in council houses and council flats to buy their homes. That has been a successful and popular policy. However, the people who are left behind are those who live in mansion blocks and substantial conversions in private ownership. It is important that the House should consider the problems and the plight of those people, who ought to enjoy the benefits of home ownership, but often have serious problems in connection with their property, of which the House should take note.

Secondly, it is important as a matter of public policy that we should find a way of bringing forward the necessary finance to keep up to date the properties all over London—and in other cities all over Britain—that are privately owned and are slowly falling into decay. The problem is that after years of rent control the owners of such properties are extremely reluctant to spend the necessary capital upon them to bring them up to date, to improve them or even to maintain them as they should. All over London there are blocks of flats, some of them going back to Victorian times, some built before the war—substantial properties — and others built since the war that may have been built in too great haste. In almost all those properties substantial capital expenditure is necessary to ensure that they last and to make them suitable for modern needs. However, it is not possible to look to the landlords to find the capital. The interest of the landlord in all to many cases is to get vacant possession, so that they can use the site for another purpose, or to change the character of the block and increase their profits at the expense of the established residents.

This is not a simple matter of extending to people living in flats the benefits of home ownership. We need to consider the way of obtaining the money needed to maintain and improve these blocks. The Government might decide as a matter of national policy to make grants available for the necessary capital works, or money might be available through local authorities. I do not regard those as particularly hopeful sources of funds, but I do think that the tenants would often be willing to find the money if they knew that they were improving their own property and not simply enriching the landlord with whom they may be on bad terms or whom they may not even know by name. 736 There are cases in Kensington where it has not been possible to ascertain the name of the owner of the block, in spite of the legislation on that point.

There are many ways in which co-ownership of flats could be made statutory: we must make sure that we get it right. First, it is important to stress that there should be no question of confiscation. The valuation is most important and it must be fair to both parties. If the tenants cannot afford the market price of the block, by all means let the Government encourage the Housing Corporation, the building societies or other sources of finance to give them special help. There should be no question of the valuation being tilted in favour of the tenants so that the landlords get a raw deal. Some of the opposition to my Bill arises from the fact that many people consider that the enfranchisement of leasehold houses is not carried out on a basis that is fair to the owners of the property. However, I am sure that we can find a formula that valuers would accept for arriving at the proper market price of these varied properties.

Secondly, my Bill does not apply to single properties or to small lettings by owner occupiers. I shall specify in my Bill that not fewer than four flats should be required to be brought together to make a condominium that could exercise the powers that I recommend. Therefore, there is no threat at all in my Bill to small property owners.

Thirdly, in the Bill I have sought to make provision for continuity of competent management. The device that I have adopted is to require the residents to set up a company under a particular memorandum and articles. The tenants association would be able to exercise the powers that I propose it should have under the Bill only if it forms a company on the specified lines. The schedule to the Bill contains the model memorandum and articles for a tenants association seeking to acquire the property in which the members live, and to run it on common ownership lines.

The schedule is not my own work. If hon. Members study the text, it will be clear to them that it has been prepared by professional experts who are well informed about the management of mansion blocks.

Although it is obvious that my Bill will experience difficulty in completing its stages during the present session, I trust that the House will give me leave to introduce it and that it may be printed, if only because of the value that lies in the memorandum and articles as a model that can be used by tenants associations.