Housing: Park Homes

Baroness Scott of Needham Market Excerpts

Tuesday 23rd October 2012 Grand Committee

Asked By

[Baroness Scott of Needham Market]

To ask Her Majesty’s Government whether they intend to undertake legislative and policy changes to the park homes sector as a result of their recent consultation exercise.

[Baroness Scott of Needham Market]

My Lords, I am very pleased to have secured this slot for a Short Debate on the problems facing the park homes sector. There has been a flurry of activity in the past couple of years. The Government have concluded their consultation on the future regulation of the sector; the Communities and Local Government Select Committee carried out a full inquiry and produced an excellent report; my Suffolk colleague from the House of Commons, Peter Aldous, has sponsored a Private Member’s Bill on it, which had its Second Reading on Friday; and just last week Consumer Focus published its report into the sector, called Living the Dream?—with an all-important question mark. I am really pleased that such a well respected independent body has carried out research into park homes because their work has confirmed what we knew from a lot of anecdotal evidence. I will not say too much about it because I know we will be hearing from the noble Lord, Lord Whitty, who is very familiar with the work. We have a very good opportunity this evening to hear from the Minister where government thinking is on this matter.

I am very pleased that the noble Lord, Lord Graham of Edmonton, is with us this evening. He has been such a clarion voice crying out for this sector over many years and I pay tribute to you, Ted, for what you have done.

[Lord Graham of Edmonton]

Many thanks.

[Baroness Scott of Needham Market]

There are more than 2,000 park home sites in this country, predominantly in rural areas, and they house around 160,000 people in 85,000 homes. The residents are almost all approaching or beyond retirement age and many are of modest means. The Consumer Focus report notes that a quarter of these residents are over 75, so many of them are vulnerable. Determined not to be reliant on the state, they have chosen to live in park homes, often using the surplus equity from the sale of their previous home to supplement their pensions.

These dwellings are often called “mobile homes” but this is highly misleading. While they might be technically mobile, they are permanent residences and this is much more than a matter of words. It means that the legal framework that is set out in three main pieces of legislation, predominantly the Caravan Sites and Control of Development Act 1960, is entirely the wrong legal framework and woefully out of date.

I first became aware of problems in the sector more than 20 years ago when I was a district councillor and things have not improved. In its submission to the government consultation, the Local Government Association gave examples of site owners who overcrowd the sites, ignore licence conditions, make inadequate provision for drainage and sewerage, and dump rubbish. The current maximum fine is £2,500 and it is often cheaper for the site owner to pay the fine than to do the work. In any event, it costs councils to do the enforcement. In effect, local council tax payers are subsidising this abhorrent behaviour.

The solution proposed by the Local Government Association is that the sector is brought in line with the Housing Act 2004, which would allow for the issuing of improvement notices, prosecution for serious non-compliance, the power to carry out work and re-charge for it, and the registration of enforcement notices as local land charges. The current licence system is often manipulated because responsibility for compliance with site conditions does not necessarily transfer to new owners when sites are sold.

Service charges often bear no relation to the actual expenditure of the site owner on the site but it is difficult for the residents to dispute the bills. Some site owners are levying a VAT rate of 20% on the re-charges for gas and electricity. Many charge what home owners regard as excessive fees for site maintenance that is often not done at all.

It is the growing evidence of serious criminality within the sector that gives most cause for concern. I am indebted to Detective Chief Inspector Colquhoun of the West Mercia Police, who has become a nationally recognised expert in the field. He has successfully prosecuted 74 individuals, who received a total of 64 years in prison. He is personally leading efforts to increase awareness throughout the police force of the ways in which fraud can be perpetrated. The growth of criminality in this sector is a combination of the economics of the industry and the inadequate regulatory framework.

Most park homes are owned by their occupants, who must separately buy the pitch that it is standing on and pay ongoing service charges. A pitch can cost anything from £20,000 to £250,000, so this can be big money. Consumer Focus has shown that only around 1% of purchasers take legal advice before they buy, which is a serious problem. The restrictions on park home owners are so onerous that I imagine it simply would not occur to buyers that such a framework could exist, but it does and they often do not know until it is too late. A park home owner cannot sell their home without the approval of the site owner of the prospective purchaser. The site owner then receives 10% for doing very little. The purchase of the new pitch applies only to the original home. When it is replaced, a new fee has to be paid.

The service charges are peanuts compared to the money that site owners can make from their share of the sale of homes, particularly from buying and selling homes themselves. The abuses vary. Some allow the site to decline to a point where everyone who can leaves and the remaining residents are encouraged to sell their homes at knock-down prices to the site owner, who redevelops the site and sells new pitches at a very high price. Prosecutions have taken place of individuals who have decided to speed up this process by adding intimidation to their ways of encouraging people to leave.

Where owners wish to sell their home, site owners often veto numbers of prospective purchasers until in desperation the seller accepts a very low price from the site owner himself. Site owners have been known to intercept potential buyers at the entrance of the site or to pass on false information about the state of the home. There are examples of site owners visiting local estate agents to tell them that they are wasting their time marketing the homes because any new purchaser will be vetoed.

Site owners have been known to write to residents telling them that their home is defective and they will be evicted if they do not remedy it. Luckily, the ever-caring site owner is there to offer to buy their home from them, at a price far below its real value. Conversely, people who want to improve or refurbish their homes are often told that they need the site owner’s permission and that it will not be forthcoming.

A culture of intimidation and fear has grown up. Consumer Focus reports that one in 10 residents has experienced abusive and threatening behaviour. Many do not go to the police because they are simply too frightened. Let us remember that these are mostly older, often elderly, people. Some residents have organised themselves and have set up groups. We should recognise how much courage it takes to organise in this way because there are reports of serious intimidation against the organisers and members of such groups. The National Park Home Owners Congress held its meeting in Birmingham in the summer and it was attended by more than 4,000 people. It takes real guts to do what they are doing and we should support them not just with warm words but by providing a legislative framework that is fit for purpose.

Mr Aldous’s Bill, which I am very pleased has the support of the Government, will go a long way to creating that, but it is not of itself enough. The Bill is not retrospective and I understand that is because of legal advice that the Human Rights Act could be invoked if there were a retrospective change of contract. However, this leaves the current 160,000 people vulnerable to the sort of abuse I have described, in fact possibly even more vulnerable—I fear that there will be a sort of crime bonanza later on as the rogue operators see their cash cow disappearing. I would like the Government to think again and see whether there is a middle way of introducing this for existing tenants, perhaps a few years down the road, in such a way that does not impinge on the Human Rights Act. Can the Minister also undertake to look at the question of park homes and the Green Deal? Fuel poverty is a real problem in this sector.

Finally, while the Bill will include a fit and proper person test for site owners, it will not be implemented until it is deemed necessary later. Will the Minister accept that all the work I have referred to earlier has demonstrated that there is ample evidence of the need for such a test now? It is not just about driving the crooks out; we also need to provide comfort to the good operators who are being tarnished by these criminals.

I look forward to hearing the contributions from other noble Lords in this short debate and to hearing the Minister’s reply.

--- Later in debate ---

[Baroness Hanham]

My Lords, at the moment the Government support everything that was in the consultation. There are areas where we are waiting to see what happens as a result of the Bill’s implementation and further consultation; the fit and proper person test is probably one, but it is very much on the radar because it was brought up very significantly in the Select Committee report.

The noble baroness, Lady Scott, asked about the human rights aspect. We cannot take away altogether the site owner’s contractual right to approve, but we have in fact reversed the burden of proof. Refusal can be made only on certain grounds and only with agreement of a residential property tribunal.

[Baroness Scott of Needham Market]

I am grateful to the Minister for allowing me to intervene because I know that she is short of time. My concern about the way the Human Rights Act is being interpreted means that it cannot apply retrospectively. Current owners will remain vulnerable; only the new owners will have protection. I am very nervous for current owners, particularly as I fear a kind of bonanza where people will see this money-making opportunity drying up in the future. The situation could inadvertently become even worse for the existing tenants than it is at the moment.

[Baroness Hanham]

I am sorry if I misunderstood the point, but it is one that is extremely well made. As my noble friend says, the Bill is not retrospective, as indeed most legislation is not. Potentially, however, it will offer protection in a perilous situation. Unfortunately, there will be bad site owners until they are stopped.

The noble Lord, Lord Whitty, asked about fuel poverty. We are talking to DECC about the application of the Green Deal to park homes. However, as this is a Private Member’s Bill, we cannot connect them together. Someone may wish to try to strengthen the law as time goes on.

I think that I have dealt with the issue of the fit and proper person test as best I can, and as I say, there is going to be very much a watching brief on that. That probably covers most of the aspects that have been raised in our debate. I hope that I have made clear that we strongly welcome and support the measures in the Bill. They are indeed long overdue because too many people have been put in jeopardy for too long a time. I hope that the Bill will get as far as this House and that it will be passed unanimously in the other place. We will then have an opportunity to consider it—it is hoped in the not too distant future. A Private Member’s Bill will provide at least some protection for those who have been suffering for a long time.