§ Mrs. GillanTo ask the Secretary of State for the Environment when he plans to implement measures to assist leaseholders of former council flats who are facing difficulties with high service charges and resale. [29857]
§ Mr. CurryRecent research has shown that while nine out of 10 people who bought their flats under the right to buy were satisfied with their purchase, a small proportion was in particular difficulties with service charges, and an even smaller proportion has had difficulty in reselling because prospective buyers could not obtain a mortgage.
Following public consultation, I am introducing three measures to assist local authority leaseholders:
first, a wide-ranging good practice guide, to help councils improve their management of service charges in flats which they have sold. This will help to avoid leaseholders being presented with unexpectedly or unreasonably high bills;second, a more flexible form of mortgage indemnity agreement, which councils can use to guarantee commercial mortgages, including lending on ex-council flats. Mortgage indemnities can enhance councils' housing policies and encourage lending in areas where a resale market is not yet fully established;third, an exchange sale scheme, to help leaseholders who need to move from flats bought under the right to buy but cannot resell on the open market because of mortgageability problems. The scheme will help the authority to buy back the flat at the right-to-buy price, and to sell the leaseholder another property at a discount of up to 40 per cent.These measures, the first two of which are available now, will help local authorities to assist those leaseholders who face particular difficulty. The third measure requires regulations which I have laid before Parliament today. Subject to its views, the exchange sale scheme will come into effect on 10 July.
We are issuing advice to local authorities today on these measures and how to use them to boost the local housing market in general, and help owners of former council flats in particular.