EXTENSION TO CERTAIN CASES WHERE LANDLORD DOES NOT OWN FREEHOLD (Hansard, 12 June 1984)

§ The Parliamentary Under-Secretary of State for the Environment (Sir George Young)
I beg to move, That this House doth disagree with the Lords in the said amendment.

§ Mr. Deputy Speaker (Mr. Harold Walker)
With this it will be convenient to take Government amendments (a) and (b) and Nos. 1 to 7.

§ Sir George Young
We have decided to accept the substance of the amendment to clause 1 which was passed against the Government in another place. These further amendments are to correct technical deficiences in the Lords amendment.
Clause 1 will extend the right to buy to property where the landlord's own interest is leasehold. It will give secure tenants the right to purchase a long sub-lease of their homes, assuming they meet the normal qualifying conditions. Under the terms of the Leasehold Reform Act 1967, long leaseholders of houses would normally be able 876 to go on and enfranchise their leases and acquire the freehold. That was the position under clause 1 when the Bill first left this House.
Clause 1 was, however, amended in the other place to provide that, where the freehold interest in the property is held by a charitable body, tenants should be excluded not only from enfranchisement but also from the right-to-buy. The Government found that totally unacceptable, and the Lords amendment was reversed when the Bill returned to this House for further consideration on 12 April. We did, however, accept that there should be a high basis of compensation for freeholders in the case of enfranchisement of a right-to-buy lease; and the House approved that proposal. The Bill then returned to the other place for consideration of what the Government believed to be a reasonable compromise.
Although their Lordships accepted the main thrust of the Government's case, they did not accept it in its entirety; the result is the amendment which is no. 1 on today's Paper. The effect of that amendment would be to allow all eligible tenants to purchase a long sub-lease of their homes under the right-to-buy provisions of clause 1, but to deny rights of enfranchisement to tenants of housing associations in cases where the freeholder is a charitable body.
That certainly represents an improvement on the previous position. It narrows down the scope of the exclusion very considerable. It means that tenants of local authority leasehold property—such as the many tenants of such property in the constituency of my hon. Friend the Member for Dulwich (Mr. Bowden), whose interests he has championed so formidably — will not find their rights restricted in any way.
Nevertheless, I do not think the distinction being made in the present amendment is wholly logical. It is not clear why the leasing of land to non-charitable housing associations should be singled out as a ground for special exemption for the freeholder — especially when the freeholders which appear to have been particularly in the minds of the promoters of this amendment, acedemic institutions such as the Oxford and Cambridge Colleges, aleady enjoy special protection under the Leasehold Reform Act.
I recognise that fears have been expressed that colleges and other charities will in future be less ready to make land available to housing associations if they know that lettings could give rise to rights of enfranchisement as a result of the right to buy being exercised. I do not myself believe, in view of the special protection enjoyed by our ancient universities and their unique right to safeguard their interests, that there is good reason for their attitude to making land available to change. However, I recognise the existence of the concern and the support it has received in another place.
The Government have, therefore, accepted that tenants of leasehold houses who acquire sub-leases under the right to buy from housing associations should be excluded from enfranchisement where the freehold belongs to a charity. The number of tenants likely to be affected is small. The information available to us suggests that, in total, there are only between 300 and 600 housing association dwellings on land leased from charitable freeholders. Very few of these are likely to be houses, where rights of enfranchisement would arise. In the case of houses, the length of lease which tenants will have the right to buy 877 —up to 125 years where the landlord's own lease allows—will often be such as to make the tenant's interest little different in practical terms from a freehold interest.
While I am not happy that tenants' rights should be restricted even to this extent, I must have regard to the views expressed in another place, and I believe this is the most satisfactory conculsion we can come to after long argument.

§ Sir Hugh Rossi (Hornsey and Wood Green)
There is one point that puzzles me. In the amendment there is a reference to two rateable values. It is stated that the rateable value of the dwelling-house does not exceed £1,000 in Greater London or £500 elsewhere". These are historic. They are rateable values that were referred to in earlier leasehold reform legislation. I believe they have been amended in more recent legislation. We now refer to £1,500 in greater London and £750 elsewhere, I believe.
Can my hon. Friend tell me why we are accepting those outdated figures from their Lordships and are not amending this to bring it into line with current legislation?

§ Sir George Young
I think it best if I write to my hon. Friend on that point rather than try to deal with it now.