I congratulate my right hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke) on securing this debate on an important issue. As others have said, she has worked hard for many years for residents in park homes across the country. I represent Great Yarmouth, where there are a large number of park home owners, so I appreciate the importance of the issue. I was delighted that one of my first appearances at the Dispatch Box as a Minister back in October 2012 was to respond to my constituency neighbour, my hon. Friend the Member for Waveney (Peter Aldous), during the debate on his Mobile Homes Bill. Both Members have campaigned tirelessly for better protection for park home owners. My right hon. Friend was instrumental in securing the passage of my hon. Friend’s Bill, which is now the Mobile Homes Act 2013.
Members feel strongly about this issue. The hon. Member for Hartlepool (Mr Wright) has whizzed his way here from his Bill Committee, where other Committee members will be missing him as we speak. I do not intend to keep him for too long. He joins a number of Members who have campaigned hard for years—not just me and the others here today, but my hon. Friend
the Member for Burton (Andrew Griffiths), who has also been in a Bill Committee; I have spoken to him about the issue a number of times. My hon. Friend the Member for York Outer (Julian Sturdy) has lobbied me regularly, although he is unable to speak today from his position just behind me in the Chamber. You, Madam Deputy Speaker, have campaigned on behalf of residents in Epping Forest. This has also been a strong issue for other Members across the House who want to make sure that residents are protected and can feel confident about their rights and ability to look after their homes, for themselves and their families.
The hon. Member for Hyndburn (Graham Jones) also contributed to the debate, as did my hon. Friends the Members for Waveney, for Stafford (Jeremy Lefroy) and for Eastbourne (Stephen Lloyd) and the hon. Members for North East Derbyshire (Natascha Engel) and for Hartlepool. They have shown the strength of feeling in favour of making sure that our residents are well protected and can have confidence about their rights in respect of their homes.
The hon. Member for North East Derbyshire raised a particular resident’s issue about a site owner’s claim that having a property empty is breaking the rules and that the property could be put in the hands of the site owner’s solicitor and sold. If that is what the resident is being told, it is simply not correct—the law does allow for a property to be empty. If the hon. Lady wants to write to me or contact me outside, I will happily take the matter forward and give her a formal response.
The 2013 Act was the biggest shake-up in park home legislation in 30 years. The Government were pleased to support it during its passage through both Houses. It marks our commitment to ensuring that park home owners are protected and that their rights are fully respected. One of those is the right to sell a park home without undue interference from the site operator. As the right hon. Member for Leeds Central (Hilary Benn) said, there was significant evidence that the role of the site operator in approving the purchaser was being abused by the unscrupulous to block the sale. This is as much about protecting the integrity and reputation of good site owners as about weeding out the scourge of the bad, rogue landlords whom none of us want to be viable. Park owners in my constituency, such as Blue Sky, work hard to provide a good environment for people to live in. The Act has removed the opportunity for abuse by abolishing the right of a site operator to approve the person to whom a home could be sold.
The new system for buying and selling has been in place since last May. As Members have outlined, it is much fairer than the old system in which the site operator could demand to interview, or otherwise vet, a prospective purchaser—often with a view to putting off a purchase so that the site operator could acquire the home from the seller at a fraction of its true market value. That was simply not acceptable. While the practice of sale blocking was not endemic, it was acknowledged to be widespread. The new procedure reduces the opportunity for abuse. As we have heard, there are still, sadly, some unscrupulous operators who continue to do what they can to interfere with people’s homes and their rights over them.
It is fair to say that, as has been reported to me, some site operators have experienced sellers not complying with the new system and not following the correct
procedures when selling their homes. This may not be in any way deliberate—I would imagine that in most cases it is not—but if a sale goes through that does not comply with the law, there could be grave consequences for the seller and the purchaser. This is why we have constantly urged, and continue to urge, that parties to the sale of a park home obtain professional advice, as almost everyone buying or selling any home would do, and as we would encourage them to do.
On the payment of commission, although the 2013 Act did not, for reasons I shall explain, change the maximum amount payable, it did make significant changes to how it is paid to the site operator. Members will be aware of that from the debates that took place at the time. The maximum amount of commission did not change, and it remains at 10%. I can understand why owners object to commission on the sale of a home. They feel aggrieved that they have to give up 10% of the sale price, which is paid to the site owner, who they feel does nothing in exchange. Sometimes they see this charge as a kind of estate agency fee at a point when the site owner is no longer involved in the sales process. However unfair home owners feel the payment of commission is, the fact that it is payable should not come as a surprise. It is an implied term of the pitch agreement, and they should have been aware that it was payable on a sale when they purchased the home.
The maximum rate of commission is 10%, as it has been since the Conservative Government reduced it from 15% in 1983. As we have heard, site operators do not have to charge the maximum rate. The right hon. Member for Mid Dorset and North Poole made the fair point that it would be interesting to find out more about whether anybody is charging less than the maximum amount. If Members will bear with me, I will return to that in relation to their comments about a review.
Commission is a legitimate income stream for park home businesses, and there is no evidence that its payment leads to profiteering. As the right hon. Member for Leeds Central and others said, that was the finding of the independent report on the economics of the industry commissioned by the previous Government in 2002. The other income strands come from selling homes and pitch fees. Income from selling homes is obviously limited because it requires the availability of pitches—land in anyone’s ownership will always be restricted to a certain amount—or site redevelopment.
Changes in pitch fees are regulated and linked to inflation, as are certain other costs that the operator incurs in running the site. Therefore, if the maximum rate of commission were to be reduced from 10%, or abolished altogether, there would need to be compensatory relief through pitch fees. The independent report noted that if the commission were decreased or abolished outright, operators would look to increase prices elsewhere. In particular, it found that abolition would result in pitch fee rises of between 20% and 32%.
As the shadow Secretary of State, the right hon. Member for Leeds Central, has said, property owners have mixed feelings about what the impact would be. It has been argued today that the report is flawed and that the views of home owners were not fully considered. It has even been suggested elsewhere—I think my right hon. Friend the Member for Mid Dorset and North Poole referred to this—that the report was not independent.