Mr. Alan Lee Williamsasked the Secretary of State for the Environment if the Government propose to amend section 118 of the Housing Act 1974 and to improve the workings of the Leasehold Reform Act 1967 in general.
§ Mr. FreesonYes. We are proposing to include suitable provisions in the Housing Bill which is in preparation. As my hon. Friend knows, section 118(4) of the Housing Act 1974, which was carried against the Government's advice, introduced a new and separate valuation basis into the Leasehold Reform Act 1967 for establishing the purchase price of the freehold of houses brought within the scope 687W of leasehold enfranchisement in 1974. We have always considered this anomalous and unsatisfactory, a view which was con-firmed as a result of the determination by the Lands Tribunal in the case of Norfolk v. Trinity College, Cambridge. We therefore propose to repeal section 118(4) with the result that all houses to which the Leasehold Reform Act applies will have their freeholds valued on the same basis for the purpose of the Act. The provision would apply to a case where notice of enfranchisement had already been given provided the price had not been determined before it came into force.
We also propose to help enfranchising leaseholders who may face difficulty and delay in dealing with the holders of minor intermediate leases who stand between them and the freeholder. Such intermediate leases are particularly prevalent in certain districts in the Birmingham area where leasehold tenure is common. The proposal is that where an intermediate lease has a reversion of not more than a month and the net ground rent received for it is not more than £5 a year the price payable for that interest will be calculated by a formula similar to that in section 10 of the Rentcharges Act 1977.