Part of the debate – in Westminster Hall am 4:19 pm ar 3 Mawrth 2010.
I congratulate my hon. Friend Jeremy Corbynon securing the debate. He is right: it seems as though it is the second half of the debate that was curtailed yesterday and that we are here to conclude that discussion.
I congratulate my hon. Friend on his commitment to improving the quality and quantity of housing, particularly affordable housing, for his constituents. He has campaigned for that ever since becoming a Member of Parliament. He has raised a series of issues, and I shall try to deal with each in turn, starting by picking up on some of his points about local authority leaseholders.
Like all home owners, local authority leaseholders have a responsibility to maintain their homes, and that includes contributing towards the cost of major repairs and refurbishments by their landlords to the buildings containing their flats and communal areas. We know that more than 10,000 council leaseholders, particularly in London, have received bills of £10,000 or more for major works and that some bills are much higher that. My hon. Friend is absolutely right about the problems and distress that that may cause for leaseholders.
We have put in place measures to protect leaseholders and to give landlords discretion to help, including directions dating from 1997 that require local authorities to cap charges for major works charges at £10,000 when works are funded from some specified Government grant programmes, or when specified criteria are met-for example, when the leaseholder would suffer exceptional hardship in paying the bill. Local authorities must consider each and every application against the criteria set out in the discretionary directions.
Local authorities must provide loans on specified terms to help leaseholders to pay service charges when requested in specified circumstances, and may offer loans on terms of their choosing in other circumstances. Local authorities may also buy properties back from leaseholders, and the Government part-fund that, paying 35 per cent. of the cost when it exceeds £50,000 in any year by allowing them to retain more capital receipts. Local authorities may spread payment of bills for major works over several years, and offer interest-free periods. They may also defer payment until the property is sold, charging interest in the meantime.
We have empowered local authorities to offer equity loans, and to purchase equity shares in homes on terms agreed with the leaseholder. We have ensured that leaseholders have statutory rights, including the right to challenge the need for major works and the cost of such works when they are believed to be unreasonable. They may do that by applying to a leasehold valuation tribunal. Leaseholders also have the right to be consulted and to comment on major works proposed through a statutory consultation process.
We know that some leaseholders are still concerned about large bills and believe that they have only a limited say in the scale and timing of the works. Some find the LVT process intimidating, even though LVTs may find in their favour. Some consider it unfair that the Government cap some bills at £10,000 but not others, and that councils will not use all their powers to reduce the burden. There have been calls for the Government to cap all large bills for major works at no more than £10,000.
Evidence suggests that for many leaseholders, those options work, but clearly a significant number still face problems. I have mentioned my hon. Friend's committed work, but I pay tribute also to my hon. Friends the Members for Islington, South and Finsbury (Emily Thornberry) and for Regent's Park and Kensington, North (Ms Buck), who have campaigned tirelessly to highlight the position in particular of elderly leaseholders on low incomes and of working couples and families who already have mortgage commitments.
In the Government's statement to Parliament in March 2007, we made it clear that we wanted to address the problems, and we followed that up with a number of measures. We encouraged local authorities to inform and advise all leaseholders facing particularly high bills for major works about the full range of payment options available and to share best practice to ensure that that happens everywhere. We arranged with the Greater London Authority for boroughs to be invited to bid for private sector renewal funding from the regional housing pot for 2009-11 to assist leaseholders who cannot pay by any other means.
We increased funding for the Leasehold Advisory Service-LEASE-so that it could develop its advisory, alternative dispute resolution and mediation services, for which demand continues to increase. As a result, LEASE is on target to deal with approximately 38,000 leasehold inquiries by the end of the financial year-an increase of almost one third on the previous year. We have said that work will continue with lenders and independent financial advisers, landlords and leaseholder representatives to develop the use of existing equity release and equity loan schemes. As promised, we legislated in the Housing and Regeneration Act 2008 to enable local authorities to offer equity loans to leaseholders and to buy back shares in properties
We have also commissioned an external review of how social landlords are dealing with leaseholders' problems with bills for major works. That report is being finalised and we intend to build on its findings to develop a way forward that is fair to leaseholders, landlords, tenants and taxpayers. We are committed to finding ways to help those leaseholders who are genuinely unable to find a way to pay.
I listened with great interest to what my hon. Friend the Member for Islington, North said about the problems facing housing association leaseholders. I am aware that service charges, including charges relating to management, may be a cause of concern to those who have purchased their property in some developments through the shared ownership route.