Housing and Regeneration Bill

I look forward to my noble friend answering that difficult question. It is a relief when the questions are put to other Members of the Committee. An important set of issues has been raised in this short debate. My noble friend is exercised by the fact that, for very good reasons, we have mixed economies within some of our larger estates and in blocks of flats where there is a mix of tenure. There are issues about those who have bought their properties and who are now faced with major bills for repairs, some of which are prompted by the fact that decent homes legislation enables local authorities to spend considerable amounts of money doing up their own properties. That implies and brings with it a cost to those who own their own homes, which illustrates my response to the amendment as a whole. It may sound a bit harsh that we do not think it is necessary for the remit of the regulator to be extended to leaseholders. It is not that we are not concerned about them but we consider that, because they are in a different position, they are more appropriately dealt with through other regimes, systems and services than through the wholesale extension of the regulatory framework. If all the occupiers of an estate are owner-occupiers, they will clearly get the benefits of the legislation. However, where some of the properties are owner-occupied and some are let on a social housing basis, the owner-occupiers will have the benefit of leasehold legislation. In addition, the standards that may be set by the regulator under Clause 191 will give tenants on those estates and owner-occupiers protection, because in practice it will be extremely difficult not to do so. That clause will give power to the regulator to set standards for registered providers as to the nature, extent and quality of accommodation, facilities or services provided by them in connection with social housing. The legislation provides that that those standards may cover such areas as maintenance, environmental and social matters, as well as estate management. While the standards will be set for the benefit of the social housing sector, many of them will also be of benefit to owner-occupiers living in estates with a mix of both owner-occupiers and social tenants. We need to go back to the principles of why we need a regulator for social housing, and we shall come on to that in later amendments. However, the problem is that social housing is not subject to the usual competitive pressures and therefore one is looking at a very contained market with few market incentives for good management and little entry to, or mobility within, the sector. Owner-occupiers have greater control over their housing circumstances, as the noble Lord, Lord Dixon-Smith, said. They have more mobility and choice. However, it is important that properties should be properly managed, irrespective of landlord or ownership. We also have to remember that leaseholders have a wide range of rights, protections and responsibilities set out in their leases and in the body of the law; for example, in the Landlord and Tenant Act 1985. The lease sets out enforceable contractual rights, and legislation places a condition of reasonableness on variable service charges which a leaseholder has to pay. They can be challenged through the leasehold valuation tribunals, and further court action is possible. There are statutory requirements for all landlords, including those in the social sector, to consult with leaseholders before carrying out works to buildings and estates. There is a set of principles around that consultation and notices of intention. We have strengthened that. We are proposing changes to the legislation, for example, so that leaseholders will automatically receive a regular statement containing information about their service charges with the same right to see supporting documentation. Amendments have been included in the Housing and Regeneration Bill to allow this to happen. There will be sanctions if this is not complied with, including the right to withhold service charges. So we are strengthening the protection available to leaseholders. Perhaps I may say something about what we are doing on large major-works bills in parts of London that have caused particular problems. I think that it is fair to say that this issue has been exercising my department for some time. We have been very conscious that the problem is very variable. Some boroughs have much higher numbers of leaseholders faced with these very high bills but some are not affected; it depends on the stock and patterns of ownership. Nevertheless when a leaseholder, particularly one on a low income, is suddenly faced with a bill for £10,000 or £20,000 because his block of flats is being upgraded, it is a real issue. We have looked at various ways of addressing the issue. We set out in a Statement to Parliament last March how landlords, who already have a lot of scope in what they can do, can do more. When we reviewed it last year, we set out how we would look at extending the payment options. At the moment—I put this on the record because I think that it is important and I want local authorities to take note of it—local authorities can provide a loan at a low rate of interest, spread payment over a longer period or agree to delay payment until the property is sold. They can also buy back properties from owners who are in arrears with service charges or cannot cope with the costs of looking after their homes. The Government fund part of the cost of their doing so by letting them retain more of the receipts from property sales. We are extending the options on offer to local authorities through the Housing and Regeneration Bill. Clause 308 will give local authority landlords a power to buy shares in properties in order to assist leaseholders to pay their major works bills. Clause 307 will give such landlords a power to offer leaseholders equity loans. These are interest-free loans which pay a percentage of the market value when the property in question is sold. I think that that is an extremely important new power. However, I should also like to ensure that local authorities use the powers that they already have to help leaseholders in difficulty and that they do so systematically and consistently. In addition, we are boosting the support available via LEASE, the body which supports, helps and advises leaseholders. We are doing a range of things in relation to these situations and I think that they will really help. That is a powerful reason why it would be better that, rather than extend regulation in the way in which the noble Lord would like to see, we actually used, developed and promoted the powers that already exist. Digital switchover is another, relatively recent issue which is important to those living in mixed blocks of flats. We are working very closely with Digital UK and have for some time been embarked on a campaign to inform local authorities to ensure that they know where they are in the timetable for switching off the analogue signal. They are bound to give their tenants access to the new technologies. Working with us, Digital UK is encouraging landlords, regardless of whether it is covered by statutory requirements, to consult residents about upgrades. There is an issue about landlords sometimes going for the most expensive option. Digital UK recently published good practice on resident consultation for landlords, entitled Calling All Landlords. So we have in place different partnerships and different ways of dealing with some of the issues that the noble Lord raised. In all fairness, I think that that is a better, more sensitive and more targeted way of achieving the outcome that he wants to see, which is to ensure that leaseholders have a fair deal. I hope he will be able to withdraw his amendment on that basis.