HL Deb 22 March 2001 vol 623 cc272-3GC

(" . In Schedule 9 to the Housing Act 1996 (low rent test: extension of rights), after subsection (3)(c) of paragraph 1 (1AA) insert—

", and (d) the freeholder satisfies a leasehold valuation tribunal that the house is integral to the management of the estate concerned and has been leased on terms relating to that purpose.

(4) An application to a leasehold valuation tribunal in accordance with paragraph (d) above shall be made by the freeholder within two months of his receipt of the relevant notice of the leaseholder's claim to enfranchise under the terms of this Act."").

The noble Baroness said: As I did not speak to Amendment No. 247 earlier, perhaps I may have the leave of the Committee to do so now.

The Housing Act 1996 removed the low rent test in respect of leasehold houses with leases that were originally granted to terms exceeding 35 years. However, it excluded from the reform houses in designated rural areas where the freehold is owned, together with adjoining land which is not occupied for residential purposes.

There are leasehold houses scattered throughout the country where the freehold is owned, together with the adjoining land and not occupied for residential purposes, but where the houses have no connection whatever with the management of an estate or other agricultural activity. Since the Leasehold Reform Act 1967, there have been cases in which landlords have fixed the ground rent just above the low rent limit, thus frustrating enfranchisement.

The amendment would have the effect of limiting the rural exclusion in respect of the low rent test to cases where a freeholder is able to establish that the house in question is genuinely part of the functioning of an estate and has been leased on terms relating to that purpose. The position of the rural exclusion, however, is anomalous and the amendment would provide a compromise solution recognising the difference between the tenures. I beg to move.

Lord Goodhart

Earlier today I moved Amendment No. 233, which proposed the complete removal of excluded tenancies on this ground. I would be happy to support, as an alternative, the amendment moved by the noble Baroness, Lady Hanham.

Lord McIntosh of Haringey

In response to the earlier amendment, I said that there is a case for amending the rural exemption to target it at the kind of properties we wish to exempt. I said that we were willing to look at that in the longer term but I did not think there was anything that we could do within the time scale of the Bill.

It is true that the amendment of the noble Baroness, Lady Hanham, is more targeted than the complete removal of the rural exemption. It restricts the rural exemption to cases where a house is integral to the management of a rural estate and had been leased on terms relating to that purpose. We shall certainly consider that element of targeting, although I do not believe that is what was intended by the rural exemption.

The point of the rural exemption is not whether the house is integral to the management of the estate but whether it has a historical connection to the estate. There is scope for argument about that, but the point that the noble Baroness made in relation to Amendment No. 247 can be taken into account in our considerations.

6.15 p.m.

Baroness Hanham

I thank the Minister for that helpful reply. I am not quite sure of the difference between the historical aspect that he mentioned and the legislative aspect. I do not think that it matters. I am grateful to the Minister for the concern that he has shown about the matter. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Hanham moved Amendment No. 247A: After Clause 142. insert the following new clause—