Co-operative Housing Tenure Bill

Jonathan Reynolds Excerpts

Tuesday 11th October 2011 Commons Chamber

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

I beg to move,

That leave be given to bring in a Bill to make provision that occupiers of dwellings owned by certain forms of co-operatives shall occupy those dwellings by virtue of their membership of the co-operative and not as tenants or under any other type of property interest; to make provision for co-operative tenure and for the respective rights and obligations of the co-operative and its members; and for connected purposes.

There are few members on either side of the House who would not acknowledge that we face something of a housing crisis here in the UK. For people looking to step on to the first rung of the housing ladder, the average price of a property in the UK is now more than £160,000, and for those living in London it is more than £280,000. As a result, a typical first-time buyer now needs to raise a deposit of £52,000, which is without doubt a substantial amount, and most people now have to rely on the “bank of mum and dad” to help them to finance their first home.

Estimates suggest that those who cannot seek financial support from their family will have to save for a deposit until they are 37, and in the coming years that age is expected to rise to 44, meaning that we could have a generation who are on the brink of becoming grandparents before they become homeowners.

Buying a home is tough, with local authorities and housing associations owning 1 million fewer homes than in 1977, but this generation can no longer rely on social housing either. In the private sector rents are increasing more quickly than wages, living standards are hugely variable, tenants often feel that they live at the whim of their landlords, and there is no immediate sign of an improvement.

The slow-down in the construction industry, the low levels of credit and the increases in demand caused by demographic changes will only tighten the squeeze on housing unless more alternatives can be found. It is now harder than ever for our young people to find a home of their own, whether they seek to buy or to rent.

I do not suggest that there is one single solution to this problem, but if we are to address the issue we will need to think differently and creatively in order to come up with solutions, and I propose today that part of that different and creative thinking should be to look beyond the traditional options of ownership or tenancy.

There is a form of housing tenure, used to great success in other countries, which is not yet available here, and that tenure is co-operative housing. My Co-operative Housing Tenure Bill will open the way for co-operative housing schemes, which are not currently acknowledged in the law of this country, and in doing so it will offer a new form of tenure that would bring additional benefits to residents. For example, the Bill would ensure that residents had a real say in the management of their housing scheme. It is a practical measure that would make a real difference to the lives of co-operative members, and through the use of shared ownership as security for finance it could also increase the availability of affordable housing.

As a member of the Co-operative party as well as the Labour party, I am proud to introduce this Bill before the House today, and I acknowledge the support that I have received from the Co-operative party and from David Rogers, at CDS Co-operatives, in preparing it.

Many Members will be familiar with the principles of co-operatives, but for those who may not be, let me briefly explain. A co-operative is a business that is owned and controlled equally by the people who use its services, or by the people who work there. A co-operative housing project is therefore one in which the property is owned collectively by a co-operative of members, and those members, as residents, then democratically own and control the property in which they live. As members, residents have a greater say over the management and maintenance of the scheme than they would as tenants, and co-operative schemes can be developed to enable members to build up financial equity.

In many countries co-operative housing tenure is already recognised as a distinct way for people to acquire the right to occupy their homes. For example, in Sweden, where co-operative housing has existed in law since 1920, 18% of homes are provided in that way.

But here in the UK there is no legal recognition of the unique status of co-operative housing. The law recognises only ownership and tenancy—tenures that date back to feudal times. The Bill would legally acknowledge housing co-operatives in this country for the first time. Of course, co-operative housing schemes exist to some degree already in the UK, but with no specific legal provision they have to be governed by general landlord and tenant law. That means that the arrangements are legally speaking more contractual than co-operative, which presents frequent practical difficulties and limitations on the management and development of the co-operative housing scheme.

For example, if the law were to recognise co-operative tenure, members would be able to determine repair and maintenance obligations democratically. Currently, the law makes that impossible, dictating that a landlord must be wholly responsible. If the law recognised co-operative tenure, members would be able to make their own rules and regulations democratically. Currently those rules would not be legally enforceable because they would not be in the original tenancy agreement. If housing co-operative tenure were recognised in law, members might be able to access finance secured on their stake in the housing complex. Currently the law defines co-operative members as tenants, and makes that impossible.

The Bill that I am presenting today would provide for a modest but important change in the law that would allow real co-operative housing to exist and flourish. In doing so, it would provide a significant boost to investment in housing co-operatives, increasing the supply and quality of homes in this country.

For me, the values that motivate the Bill are deeply rooted in the co-operative and socialist movement, famously begun by the Rochdale pioneers at the end of the 19th century. However, I recognise that the virtues that co-operation promotes—the combination of rights with responsibilities, fraternity, respect and mutualism—have an appeal across the political spectrum. I welcome support from anyone with a serious interest in these matters.

I believe that the Bill would not have significant resource implications or place undue obligations on anyone who was reluctant; however, it would open the door to a form of housing successfully provided to great effect in other countries, and I believe that there is a need and appetite for it in this country. Since tabling the motion to bring in the Bill, I have received a great many messages of support and interest from all parts of the country. The time for co-operative housing is now, and I commend the Bill to the House.

Question put and agreed to.

Ordered,

That Jonathan Reynolds, Mr Andrew Love, Chris Leslie, Chris Evans, David Miliband, Tom Blenkinsop, Luciana Berger, John Woodcock, Mr Gareth Thomas, Gavin Shuker, Mr Adrian Bailey and Alison McGovern present the Bill.

Jonathan Reynolds accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 20 January 2012, and to be printed (Bill 231).