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Lord Monkswell: Perhaps I may try to explain the problems that occur. The noble Lord said that the mortgage will require insurance. That is true. However, that insurance is usually for total loss, where earthquake or fire leads to the complete destruction of the property and it needs to be rebuilt. That is the kind of insurance my building society requires on my mortgage.

I can give a concrete example of the kind of problems that arise. It concerns some constituents of mine when I was a councillor in the City of Manchester. A couple had exercised the right to buy on their council house on the basis that they thought that as they became older they would have the ability to sell their house and move into a bungalow. That was sensible planning for the long-term future. The husband became disabled and had to retire early. They put the house on the market with a view to moving to the bungalow which, because of the

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husband's disability, became a necessity. When it came to selling their house they found that there was a structural fault and they could not get a buyer. No prospective buyer could raise a mortgage on the house, even if he wanted to.

I agree that that kind of problem is not faced by every tenant who exercises the right-to-buy. However, we have heard of whole estates where there are problems. The noble Baroness, Lady Gardner of Parkes, mentioned the problem of houses that had been built with substandard concrete and had steel rusting from the inside. Those are the kind of problems that can and do occur which are not necessarily covered by insurance and with which the ordinary owner occupier has to deal. It is a problem quite often for people in the vulnerable sectors of society who, almost by definition, do not have the funds to which owner-occupiers historically have had access. It is beholden on the Government to recognise a problem which people will possibly face when they exercise the right-to-buy in the future.

Baroness Gardner of Parkes: My noble friend raised one or two points in his reply to which I feel I must respond. Yes, the housing trust would get full market value but it would be wrong to imagine that one always gets back the money one puts into building. One has only to read the property page in any magazine to be told that if one puts in an indoor swimming pool one should not expect to recover the cost. At present, if one adds on a lean-to conservatory, which is a great current attraction, one will probably get the money back. If one puts in central heating, one will get the money back. However, with many additions--the noble Lord, Lord Berkeley, mentioned the special PVC windows--there is no way one can be guaranteed to get one's money back. So there may well be a gap between the market value of the property and its cost. That can be half dealt with by the housing trusts themselves looking at the way in which they are spending their money in terms of what is good investment and what is not.

I also understood from my noble friend's earlier reply that he was saying that the housing trusts would not lose. I believe that in Hansard tomorrow we shall see such a phrase as, "I do not believe that they will be too much out of pocket". I took that to be good news for the housing trusts, but from his later answer the situation did not appear to be quite so good as what was indicated by the earlier answer.

As regards the case which the noble Lord, Lord Monkswell, spoke about, I would go back to the surveyor and have a word with him about it. If a major structural fault is found in a house which one has bought and which one is moving from quickly, there should be someone to whom recourse can be made. I believe that the real problems are not with the houses, because the surveyor can look at them and come to a pretty good opinion on them. It is the tower blocks which are the trouble. A surveyor is not paid to survey the structure of the whole block. He is asked by the building society to give an estimate of the value. It is in the tower blocks that people are having so much trouble in trying to sell their properties. These are very real problems.

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Lord Mackay of Ardbrecknish: Perhaps I may try to clarify one or two points. I am sure that I did not read out my notes wrongly. I shall read them again. Under the purchase grants scheme, landlords will always receive the full market value of any property they sell. Whatever the discount, that is sent to them by the Housing Corporation. I have now said that for the third time and I hope that it is quite clear. I hope that I have not confused anybody. I too shall read what I said in Hansard tomorrow.

Perhaps I may make it clear about charges for repairs. My noble friend Lady Gardner of Parkes, has given me the opportunity to do that. The point of the repairs I am speaking about is that they make for huge bills for major renovations which people who have bought high-rise flats have to pay. I hope the fact that a social landlord has to notify any that may occur in the next five years will be of some help to my noble friend. I was trying to make the point by saying that people have to be aware of such matters wherever they buy a house. I have little doubt that the tenants will be advised--if they do not think of it themselves--to get a surveyor's report and then there can be some comeback on someone if something quite disastrous occurs. As I said earlier to the noble Lord, Lord Monkswell, his criticism of home ownership in this regard is a totally general one because this kind of problem could happen tomorrow to a person buying a house in the private sector.

Lord Hamilton of Dalzell: When the social housing people sell at the full market price, does that mean that they profit from the contribution of the original owner of the land contributed at below the market price or for nothing?

Lord Mackay of Ardbrecknish: Again, I thought that I had made the position clear. Yes indeed, they will get the full market price, which will include that item. In response to people who feel that someone has walked away with their generous charitable donation, the social landlord has that money because he has the gain of the land. He has that money, which is ring-fenced, to supply another house for social letting. If the landowner has given the land for social letting, although it may not be a house on the piece of land that he has given, there will still be a house which can trace back its lineage--if I can call it that--to the value of the land given.

10.30 p.m.

Lord Hamilton of Dalzell: I am sorry to pursue my noble friend on this topic, but does that mean that in due course the planning directive--which insists that local authorities, when giving planning consent, should insist on there being an element of social housing at below the market price--will cease?

Lord Mackay of Ardbrecknish: We shall come to amendments on that very matter later--I am not sure whether that will be tonight or tomorrow. My noble friend Lord Lucas has pointed out to me that the greater

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risk is not of us getting home this evening, but of us not getting home this evening if I go on, so perhaps we can leave this point for now.

Lord Monkswell: I must apologise to the Committee for intervening. It is very late but I ask the Government to think about one point. The Minister advised us that service charges--if I may put it like that--will have to be fixed for five years. The Minister shakes his head. Have I misunderstood what he is saying? It seems to me that a five-year period is a bit short. One of the significant costs facing home owners is external painting, which is generally recommended at seven-year intervals. It could happen, therefore, that the service/repair charges do not include that significant item of expenditure and that they therefore understate the liabilities with which the person exercising the right to buy will be faced.

Lord Mackay of Ardbrecknish: We are moving away from what I would call essential repairs to general maintenance. If the noble Lord does not mind, perhaps I may consider all that has been said in the past hour, especially by his good self, and write to him to try to clarify the point because I suspect that we are talking about different situations. I am referring more to the cataclysmic events mentioned by my noble friend Lady Gardner while the noble Lord is beginning to talk about what most of us consider to be the rather tedious and expensive--and sometimes difficult, if one does it oneself--general maintenance work of painting that has to be done on any house, whether owned by an individual or a local authority. With the promise that I shall look at all that has been said and write to the noble Lord, I hope that we can bring at least this little dual to an end.

Baroness Hamwee: Almost! I shall not attempt to respond to all the points made in the past hour and three minutes, but it is important to say that my approach to this--and, I believe, that of most noble Lords who have taken part in this debate--is not to restrict the right to buy, but relates to ensuring a continuing supply of affordable housing. I should like to put the amendments very firmly in that context.

The Minister rightly talked about the full market price of the property, and I look forward to debating with him at a later stage whether that properly reimburses the landlord. There is a cost to selling as there is a cost to buying. Later amendments have been tabled to ensure that the Bill provides that the landlord is fully reimbursed for all the costs associated with the exercise, but that is a matter for later.

On the question of the 20 per cent.--or whatever other arbitrary figure one applies--the Minister says that there is no need for the provision because of the money to be reinvested. If we can get right the other provisions on reimbursement, I may be persuaded but, at the moment, I am not. My concern arises directly from the comments which are not my comments but which have been made to me by the providers of social housing about the disincentive to creating new lettings or upgrading accommodation which they fear for the future. The other major area is repairs. I do not wish to

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appear to be too paternalistic about this. It is entirely right that prospective purchasers should take decisions for themselves and landlords and noble Lords should not say rather arrogantly that people ought not to buy because they do not know what they are doing. These amendments arise because of the experience of right to buy in the past and the problems in which people have found themselves. It may be that, in a rather different market where tenants have encountered the problems of negative equity, they no longer see home ownership at any price as something to go for, and future possible liabilities will receive rather greater attention than in the 1980s. It is to be hoped that we shall not experience structural problems such as those presented by precast reinforced concrete. As the noble Baroness Lady Gardner has said, in blocks of flats there are future repairs, such as repairs to lifts, which may result in very large bills for the purchaser.

Both my main amendments are born of experience and forecasts which have been made. This is undoubtedly an area to which we need to return, but the Minister has made a good many comments which deserve serious consideration. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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