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Lord Mackay of Ardbrecknish: I am content to do that since the phrase that springs to mind is that it will help to shorten the evening. I have covered all the amendments in the group. Perhaps I may sum up the situation. The new right to buy which Clause 16 introduces concerns what we believe are important new choices for social tenants. I hope that I have explained the way the exemptions will work and how they were brought about in secondary legislation. So far as they go, I hope that those assurances will be helpful to Members of the Committee who have spoken and that if my explanation of why we are not prepared to go further on exemptions does not satisfy some noble Lords, it will at least allow them to see how the Government have come to their conclusions on the matter.
Lord Hamilton of Dalzell: Before my noble friend sits down, I am totally satisfied concerning tenants of the social housing organisation that the repairs will be done. The question that I raised is this. The Government are encouraging people to buy with liabilities which they may not be able to afford. I wondered what would happen to the housing stock after people had bought the properties if they found that they could not cope with the repairs. I foresee that we may be building up slums for the future.
Lord Mackay of Ardbrecknish: The same point could be made about anyone buying a house, whether it is a tenant or anyone else buying a house on the open market. It is something which people have to take into account. That is why I gave my assurance that any repairs and the costs over the following five years would have to be notified to the tenants so that they would be able to take them into account in calculations.
Lord Monkswell: The Minister makes a rather specious distinction between the short term and the long term. It is quite true that on council house estates one can see where people have exercised the right to buy. Quite often the houses look different.
But looking over the longer term at the difference between the private, owner-occupied sector and the council sector, experience over 30, 40 and 50 years has shown standards of maintenance in the public sector to be markedly superior to those in the private sector. That is borne out by statistics; it has been evaluated many times. We need to recognise the important distinction between the short term and the long term.
We all know of horror cases where people have exercised their right to buy and within a very short space of time have either found that they could not afford the mortgage, or have found faults with the building that were not apparent at the time of the sale. The problem has become insurmountable for them.
The Government may say that people who exercise their right to buy should take out insurance to cover the costs of unforeseen problems with their property. But if you have lived in socially rented accommodation for many years, the chances are that you are already on a low income. The extra cost of the insurance is something in which you would not necessarily engage.
I should like the Minister to reflect on one point that he made. It related to the community facilities about which my noble friend Lord Berkeley was so concerned. Concern was also expressed by the noble Baroness, Lady Gardner of Parkes. The Minister suggested that, as people exercise their right to buy, they will still have rights to make use of the community facilities. I am not sure that that is a sensible approach. Surely, if there is a community facility that is funded effectively out of rent income borne by tenants and one of those tenants decides to exercise the right to buy, that tenant will no longer be making any contribution to the running costs of that facility. Why should the tenant then continue to have the right to make use of that facility? That would surely be the logical way in which the situation would be approached by managers of the facility.
Let us take the situation a stage further. As more and more people within that particular community exercise their right to buy, one could end up with a situation whereby the housing association is stuck with a community facility with no income stream to keep it maintained and provide running costs. Almost by definition one has excluded all those who have exercised the right to buy. One ends up with a community facility that has no funding mechanism and to which those for whom it was built, those living in the community, have no access. It becomes very difficult to see how the situation will work. I hope that the Minister will reflect
Lord Swinfen: I hesitate to intervene on this group of amendments since I was not here at the beginning. However, the remarks of the noble Lord, Lord Monkswell, have rather taken me by surprise. A well-known Labour local authority, when costing for people who wished to exercise their right to buy in relation to local authority property, included in the cost to the purchaser the cost of community facilities. Then, after they had bought, the authority insisted on them also paying additional sums on top of their rates to continue using those facilities.
Lord Berkeley: I am grateful to the Minister for his comments on my two amendments. I was aware of the exemptions that he mentioned for certain categories of tenants. I was also aware that this particular clause was confined to new properties that will be built in the future. I understood that it would also include properties which would be subject to major renovation in the future.
I turn to the costs of building--we have been round that subject several times--and whether the costs of affordable houses are more than they should be. I do not know, but from the information that I have been given it looks as though the Housing Corporation encourages building to very high standards with or without the community centres about which we have spoken. But we still end up with the fact that there will be many instances when the associations sell their properties at a price which is lower than the cost, however we define the cost.
I know that the money will be ring-fenced for new properties--I am sure that we shall revisit this matter later tonight or another day--but I was interested in the Minister's reply. If I took it down correctly, he said that public subsidy will push up the market or sale price to the cost of building. Am I correct in assuming, therefore, that the housing association will receive the full cost of building if it is higher than the market price? If that is the case, I am sure that they will all be very happy. I shall be glad to hear the Minister's explanation of that matter.
Lord Mackay of Ardbrecknish: Let me deal with a few of those points and perhaps take first the last point of the noble Lord, Lord Berkeley. I am afraid that he must have misheard me. I quite understand. It was rather a long contribution on a fair number of amendments.
The social landlords will always receive the full market value of any property that they sell. I should have thought that, if the houses are of a higher standard--I do not want to get into an argument about whether they are or not--they will fetch more in the market. Their market price will be higher when that comes to be judged. I do not see a huge gulf between building a new house (if they decide to build) to those high standards and selling a house of equally high standards. I should have thought that the market would reflect that and I do not think there is a problem.
I am in a little difficulty with the concept of community facilities. It is all rather theoretical. Nobody has given any examples. Those of which I can think are the ones which will be excluded anyway because they are usually in sheltered accommodation or specially designed accommodation for special groups. I can certainly think of things such as community grounds--the grounds around an estate, which have to be maintained. Often in the private sector currently, in the terms of the sales, contributions or service charges are attached to what in England I understand are called freeholds. I believe that in selling to a sitting tenant, a social landlord will be able to take steps to make sure that the costs of any community gardens or the like are shared among all the people in the development, whether they are tenants or owners.
I am not sure that I understood the noble Lord, Lord Monkswell. If any tenant buying his house requires a mortgage--I assume that he will--the mortgager will insist on insurance policies on the property. Indeed, the mortgager may arrange them himself and charge the owner the cost of the premium on the insurances every year when the date comes round.
On the noble Lord's more general point, he seems almost to be saying that because of the risks of private ownership no one should be a private owner. Everyone knows that there are risks. There are risks in us all going home this evening. There are risks to private ownership. I think I explained that if work had to be done to the property within five years it would be notified to the tenant. I have to tell the noble Lord that I suspect that when the tenant consults his man or woman of business the tenant will be advised of the responsibilities one takes on if one becomes an owner-occupier. That refers to absolutely everyone, whether they buy as a tenant or as someone who wants to find a house in the open market.
I made the point initially that if we go around council estates we will see that most tenants who have bought improve their properties far beyond the way they were looked after by the local authority. Certainly I have never seen these mythical local authorities which look after their properties better than the private sector.
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