Sale of Park Homes

Jeremy Lefroy Excerpts

Thursday 30th October 2014 Commons Chamber

[Jeremy Lefroy (Stafford) (Con)]

It is a pleasure to follow the hon. Member for North East Derbyshire (Natascha Engel), and, indeed, all who have spoken so far. I congratulate my right hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke) on instigating the debate, and on making such a powerful case. I also congratulate my hon. Friend the Member for Waveney (Peter Aldous) on all the tremendous work that he has done in piloting his Bill through the House.

I will not repeat the arguments that have been advanced so powerfully this afternoon. I will, however, quote briefly from an e-mail that I received from a constituent who lives in Lodgefield park in my constituency. He writes:

“Home owners are having great difficulty in selling partly because of the 10% which in effect makes their homes over-priced on the market. This means that owners are trapped in their homes and unable to move unless they drop the price to a level where they are unable to purchase anywhere else.”

He also makes the interesting point that if home owners are selling to fund care, the state, if they come to rely on it, will lose quite a large sum through the 10% commission. That point may be tangential, but I think that the Government should bear it in mind none the less, given that in such cases there will ultimately be a cost to the Treasury.

The only other point that I want to make concerns transparency, to which many Members have referred. There are three elements of the income that comes to park home site owners. First, there is the income to cover their current costs, the year-by-year costs of maintaining the park. Secondly, there is the income to cover capital improvements to the site. That is very important, not least to those who live in park homes, because they want to see improvements to their properties which will increase their value. Finally, quite rightly, there is a surplus or profit element.

Every Member who has spoken has acknowledged that site owners have a right to see a return on their investment, but I, like others, would like to see more transparency. We are told that the commission is needed because, without it, pitch fees would rise substantially—by 20% to 30%, or even more. I am not sure that I entirely understand that. The corollary is that, in a year in which a number of homes have been sold in a park, the site owner would be expected to say “We can reduce pitch fees this year”, or “We will not apply for an increase, because we have received so much income from the 10% commission.” I have yet to hear of such instances. There may have been some, but they have not been brought to my attention.

I agree with what was said earlier by my hon. Friend the Member for North East Cambridgeshire (Stephen Barclay). We need to see an unbundling—a transparency —in regard to both revenue and capital costs. Those who live in park homes would then be able to see clearly what had been spent on maintenance and on capital improvements, and what remained as a surplus. I am sure they would welcome that information being made clearly visible, because these matters have an impact on their quality of life and on the capital value of their home.

Such transparency would take a lot of the heat out of the debate. For example, people would be able to see that there might be cases in which a fee of 10% was reasonable in a particular year, just as a fee of 0% might be appropriate at other times. There could also be a strong case for transferring most of the cost to annual fees, or for introducing a mixture of a capital fee and a revenue fee. This is the opportune time for the review that my right hon. Friend the Member for Mid Dorset and North Poole has proposed, and I hope that those on the Government and Opposition Front Benches will concur with that view, as the hon. Member for North East Derbyshire (Natascha Engel) requested, because many people living in those homes are coming to the end of their lives and a solution needs to be found. Transparency is what we need.

--- Later in debate ---

[Brandon Lewis]

My right hon. Friend makes a very good point. It is nice when we all agree from time to time.

The right hon. Member for Leeds Central also said that things have moved on in 12 years. The report is 12 years old and I agree that it had a small sample base, but it was based on a range of park home sites—from the very small to the very large. Although it was published in 2002, there is no great evidence at present to suggest that the economic structures of the industry have changed significantly in the intervening years. There was some involvement from homeowners—there had to be, given the nature of the study in preparing the report. However, the report was on the economics of the sector; it was not, to be fair to the previous Government, a consultation.

[Jeremy Lefroy]

Does the Minister not agree that one of the things that has changed is the value of those homes? Given that the commission is a percentage of the value, which has probably outstripped inflation considerably in many parts of the country, that is a substantial change, even since 2002.

[Brandon Lewis]

My hon. Friend makes a very good point, although I would point out that the proportion changes for both parties and the percentage remains the same.

Home owners also complained that the report’s findings were not borne out by the facts and, as hon. Members have said, that the 10% commission is not necessarily invested in the management and maintenance of the site, but is simply treated as profit. I have no doubt that there will be examples where that is the case. We are aware that some sites are poorly managed and poorly maintained and that operators do not invest in them. However, that does not mean that that is universally the case. The majority of site operators need that commission to maintain their sites.