Housing and Planning Bill
Debate between Lord Porter of Spalding and Lord Campbell-Savours
Lord Campbell-Savours
My Lords, there will be abuse, and the incentives are very substantial. I have some figures on what is happening in Westminster which might be of interest to Members of the House. The average cost of a one-bedroom council flat in Westminster is £113.78 a week. When it is sold off and in the private sector, that same flat now fetches £480 a week. That is nearly four times as much. A two-bed flat is £128 a week in the social sector and £450 a week when it is sold off. A four-bed flat is £157 a week in Westminster and £738 a week when it is in the private sector. We are talking about former council flats here. That is £38,500 a year after tax for a former council flat that would be rented out today at £157 a week if it was still in the public sector. These figures are an absolute scandal. The Government are promoting all this in the Bill, and we cannot see why they insist on doing it.
Westminster City Council has its own residential department, CityWest Homes, which at least tries to bring some sanity to this market, but its rents are very high as well. The problem is essentially that private landlords and estate agents in London market these properties at silly prices, and they have a market. Who is the market? People I have discussed this with now tell me that these flats are not being taken by former council tenants in receipt of housing benefit because of the cap. I am told that 70% of all Westminster council flats that have been sold off now go to overseas tenants, because, obviously, they have the money. In other words, we are shifting people out of London into the suburbs and using the properties in which they formerly lived as private accommodation, which is being let to people from overseas who come to London. This is an absolute scandal, and I cannot see the sanity in what the Government are doing. That is all I need to say at this stage of the debate.
Lord Porter of Spalding
I will ask two questions. To go back to the same principle, what difference does it make whether somebody exercises the right to buy and then occupies a property or whether they free up the equity they have in it, buy something else, and then put that property back into the private rented sector? If somebody is living in it, they are living in it, so I am not sure that the noble Lord has the right end of the stick as regards the properties.
Can the noble Lord, Lord Beecham, say whether anybody has asked the mortgage providers whether they would still be happy to provide a mortgage if the use of that property was restricted in the way that is being proposed?