§ 4.10 p.m.
§ Mr. Frank Allaun (Salford, East)
I beg to move,That leave be given to bring in a Bill to give tenants of private property owners the right to purchase their dwellings at a reasonable price before the properties are taken out of their present rent control; to encourage local authorities to offer low-deposit or no-deposit mortgages at low interest rates to sitting tenants wishing to buy their homes from their landlords; and to permit local authorities to buy such dwellings at the same price if the tenant declines the opportunity to purchase.This owner-occupation Bill has two aims, first, to protect private landlords' tenants from the severe rent rises which are about to be imposed on them and secondly to permit them instead to become owner-occupiers by purchasing their homes from their landlords at a reasonable price, I intend to mention first what tenants' prospects are today and secondly how this Bill would work. Unlike most Ten Minute Rule Bills, this Bill has already been drafted and printed, as I have a copy with me. I attempted to introduce such a Bill 12 months ago. Since then the need for it has, regrettably, very greatly increased, thanks to the Government's higher rents Bill.
The private tenants of this country have not yet realised what is in store for them. They are in for the heaviest caning in housing history, even worse than that due to The council tenants. I am talking about 1.3 million families whose rents are still controlled and would remain controlled if it were not for the Housing Finance Bill. This number is the Government's own estimate, and it means approximately 4 million men, women and children who would be affected by the proposals I am now making.
The Government's intention is to remove from their existing rent control all those dwellings at present controlled by the Rent Act, 1968. Their rents will then go through the rent fixing machinery and when this occurs rent increases on average will be 2.6 times the present rent. We know this because that is the figure for tenants who have lost rent control so far. For example, a controlled rent of £3 a week plus rates will go up on 261 average to £7.80 per week plus rates. I could, of course, quote far more serious cases. I had one recently where the increase was five-fold.
As a result of all this, some property companies will have their profits increased by millions of pounds a year. The Freshwater property group, for instance, has made a fortune of more than £9 million out of the Rent Acts, but that is nothing to what we are going to see. The real bonanza is about to begin.
The Labour Government made some serious mistakes in the Housing Act, 1969, but what the Conservative Government are doing is far worse. They propose to end control of all houses, including those without a bathroom, hot water and inside water closet, and those which are so unsound structurally as to be unworthy of having these things introduced. Even tenants of the worst slum housing are going to lose their present rent control, unless they have already been scheduled for slum clearance, and the Government know very well that vast numbers of slums are still awaiting scheduling for clearance. So the Government do not even have the excuse that the higher rents are to induce landlords to install bathrooms.
I want to pay tribute to my hon. Friend the Member for Erith and Cray-ford (Mr. Wellbeloved). He has thought a great deal and for a long time about this problem. Much of the idea and the formula of the Bill came from his brain. I will explain how the Measure would work.
At the point when the house or flat is about to be taken out of rent control, the owner would be required to offer it for sale to the sitting tenant at a reasonable price. If the tenant could not or did not wish to purchase, the local authority would have a similar option at the same price. If, however, the landlord did not wish to take the house out of control and did not intend to raise rent in this way, then he would not he required to offer it for sale.
The question will naturally be asked—what is a reasonable price? The formula is stated in Clause 2 and it should be clear that, as things are today, if rents of houses are sharply increased, as they will be, the price of those houses will also rise steeply. The intention of the Bill, therefore, is to give the land- 262 lord more than he would get if the house were sold today with controlled rent and a sitting tenant, but less than he would be able to charge following decontrol.
A tenant paying a controlled rent of £1.79 plus rates would be living in a house worth £1,400—this has been worked out by professional experts—on this basis of 15 times the net annual controlled rent. On the open market, without a sitting tenant the house would, it has been estimated, be worth £3,600. Thus, under my formula the selling price to the tenant would be £2,133. Some landlords complain that they wish that they could be free of the burden of their properties. Here is a way they can do it and obtain a fair return. They could then invest the sum realised in more lucrative undertakings.
My second main motive for proposing the Bill is that I have long advocated, along with some other hon. Members, the improvement of old houses by the installation of baths, hot water systems and inside water closets. There are generous grants available to property owners to improve their houses. While owner-occupiers have sensibly taken advantage of them, most private landlords have not.
I received yesterday a Written Answer from the Under-Secretary of State for the Environment to a Question on this matter. It showed in simple terms that for each house improved by landlords, four have been improved by owner-occupiers, local authorities and housing associations. The Bill would therefore greatly increase the number of houses being improved.
Not only would improvements be accelerated, but so also would much-needed repairs. Go down any back street and even from the outside one can tell which house is owner-occupied and which is landlord-owned. One can tell from the way the outside is kept, from the repainting, from the state of the window frames or the new doors and windows which have been put in. Owner-occupiers are keener on maintaining their houses in good repair.
Many landlords say that they cannot afford to do the repairs and improvements and that they cannot afford to pay even their half of the cost, the other half coming from the Government. Very 263 well—if that is so, let the tenant or councils buy them out and do the improvements themselves. Hon. Members opposite profess to be the upholders of the little man, the owner-occupier, and that my hon. Friends are his enemy. This is utterly untrue but if hon. Members opposite claim to be the friends of owner-occupation, let them show it by supporting the Bill.
Briefly, the advantages deriving from my proposals are, first, that it would protect tenants from the savage rent increases which will otherwise be inflicted; secondly, that it would encourage the improvement of great numbers of old but structurally sound houses; and, thirdly, it would be widely and immensely popular.
I suggest that hon. Members opposite will not vote against the Bill, which is aimed at helping owner-occupiers, because that would create a bad impression for them. Instead, I think the Government will try to kill the Bill elsewhere by failing to provide time for it to proceed.
§ Question put and agreed to.
§ Bill ordered to be brought in by Mr. Frank Allaun, Mr. James Wellbeloved, Mr. Julius Silverman, Mr. Reginald Freeson, Mr. Arthur Blenkinsop, Mr. Jack Dunnett, Mr. Hugh Jenkins, Mr. George Cunningham, Mr. Joe Ashton, Mr. Stallard, Mr. Norman Atkinson, and Mr. David Stoddart.