HC Deb 01 August 1978 vol 955 cc309-10W
Mr. Andrew Bennett

asked the Secretary of State for the Environment if he will make a statement about the working of the Rentcharges Act during its first six months.

Mr. Armstrong

The Rentcharges Act received the Royal Assent on 22nd July 1977 and the new apportionment and redemption procedures came into force on 1st February 1978.

Since then, 505 applications for apportionment have been received by the Department, including 304 applications for apportionment of rentcharges (under section 4 of the Rentcharges Act) and 201 for apportionment of groundrents (under section 20 of the Landlord and Tenant Act 1927). The total number of applications for apportionment during the equivalent period in 1977 was 201.

1,408 applications for certificates of redemption (under section 8 of the Rent-charges Act) have been received since 1st February. A small number of these (27) resulted from apportionment orders which have been made conditional upon the applicant redeeming his rentcharge or groundrent. The total number of applications for redemption during the equivalent period in 1977 was 353.

The very large increase in the number of applications is due in part to rent-payers delaying their applications until the new procedures came into force, but the upsurge of applications for redemptions certificates particularly suggests that many people have decided to seek redemption because the new procedures, which were well publicised, were both simpler and cheaper. The present high rate of applications as yet shows no signs of slackening.

Since 1st February, 232 orders of apportionment have been made. These include 55 made under section 4 of the Rentcharges Act and 177, under section 20 of the LTA 1927 (of which 35 were in respect of applications made since 1st February). 520 certificates of redemption have been issued, 138 of which resulted from applications made before 1st February and where therefore issued under the old legislation. Overall, there has been 10–15 per cent. increase in the number of orders and certificates issued, compared with the same period last year, but as the new procedures get further underway, the rate at which orders and certificates are issued is increasing.

The new procedures have been relatively trouble free to operate. It has not so far been necessary to require applicants formally to provide deeds, or copies, although these have sometimes been sent, most helpfully, in cases where we have needed to seek further information. And, in dealing with applications for redemption, it has normally been possible to establish the ownership of the rentcharge, although instructions to pay the redemption price in court has had to be given in about 20 cases.

The redemption price itself, calculated in accordance with the formula in section 10 of the Rentcharge Act, has ranged between 8.018 and 9.033 times the annual amount of the rentcharge. At 31st July, the multiplier was 8.290. The smaller outlay now required by an applicant (he no longer has to pay the rentowners legal costs) has clearly encouraged more applications. And in those cases where it was appropriate for an apportionment order to be made conditional upon redemption, in only one case has my right hon. Friend been asked not to impose the condition on the grounds that it would cause the applicant to suffer financial hardship.

We are still receiving numerous inquiries—over 100 a week in addition to firm applications. Approaches are also made to rent officers, and appropriate citizens advice bureaux, which are also receiving a continuous flow of enquiries. We very much appreciate the local help which is being given.