Park Homes

Kris Hopkins Excerpts

Tuesday 13th May 2014 Westminster Hall

[The Parliamentary Under-Secretary of State for Communities and Local Government (Kris Hopkins)]

It is a pleasure to serve under your chairmanship, Mr Howarth. I congratulate my hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke) on securing a debate on this important issue, on which I have also received significant correspondence over the years as an MP. She has campaigned tirelessly for better protection for park home owners, and she was instrumental in securing the passage of the Mobile Homes Act 2013, introduced by my hon. Friend the Member for Waveney (Peter Aldous). She asked a couple of specific questions, which I will answer shortly.

As my hon. Friend the Member for Waveney said, the 2013 Act was the biggest shake-up in park home legislation for 30 years, and the Government were pleased to be able to support it during its passage through both Houses. It marks our commitment to ensuring that park home owners are protected and their rights are respected. One such right is the right to sell a park home without undue interference from the site owner. There was significant evidence that the site operator’s role in approving the purchaser had been abused by a number of unscrupulous individuals to block sales. The 2013 Act removed that opportunity by abolishing the site operator’s right to approve the person to whom a home should or could be sold. Provided that a person meets the relevant site rules, the sale can usually go ahead without the site owner being involved in the process until the purchaser notifies them that the sale has been completed and the pitch agreement has been assigned.

The new system for buying and selling has been in place since last May. It is much fairer than the old system and reduces the opportunity for abuse. As my hon. Friend the Member for Waveney said, it now needs to bed in. To answer the specific point about a review, a body such as the Select Committee might, after a sensible period, want to explore the progress of the Act.

We have put in place safeguards to ensure that the site owner receives the commission. Most importantly, however, they cannot demand it before the home is bought and the pitch agreement is assigned. That means the buyer, not the seller, is responsible for paying the commission. However, it is not payable until following completion, when the site owner provides the buyer, who is now the new home owner, with their bank details. If the new owner does not pay the commission, they will be in breach of the pitch agreement and at risk of losing their home. The maximum commission payable is 10% of the price paid for the home. Thus, when purchasing the home, the buyer pays 90% to the seller and retains 10% to pay as commission to the site operator.

I realise that some home owners object to the commission on the sale of a home. Some will feel aggrieved that they have to give up 10% of the purchase price, which is paid to the site owner, when they may believe they get little or nothing in return. Sometimes they see this charge as some kind of estate agent’s charge, despite the fact that the site owner is no longer involved in the sale process. However unfair home owners feel the commission is, the fact that it is payable should not come as a surprise. It is implied in the terms of the pitch agreement, and people should be aware that it is payable on the sale when they purchase the home.

The maximum rate of commission is 10%, having been reduced from 15% by the Conservative Government in 1983. Commission is a legitimate income stream for park home owners, and there is no evidence that the payment leads to profiteering. That was the finding of the independent report commissioned by the previous Government in 2002. The other income strands are from selling homes and from pitch fees. Income from selling homes is necessarily limited because it requires the availability of new pitches or site development. Changes in pitch fees are regulated, and they are linked to inflation and certain other costs that the operator incurs in running the site.

[Anne Marie Morris]

Will the Minister explain how a park home resident will know about the new provisions? If they do not know about them, they cannot take advantage of them, and they can still be bullied.

[Kris Hopkins]

I will come to that shortly.

There is limited time, but let me add that there was a further review in 2006. The then Government suggested that the commission be reduced to 7.5%. Following significant consultation, they decided there was no case for change, and they maintained the status quo. In spring 2012, the Select Committee did significant work on the operation of park homes and came up with a powerful and significant report, which obviously influenced the 2013 Act.

On the specific issues that have come out of the debate, the Government have spent a significant time shaping our answers to parliamentary questions so that we can give really full answers to the absolutely pertinent questions that Members have asked about the progress that has been made. I am quite prepared to put another document in the Library to provide some clarity and so that any Member who has not asked questions can have access to it. However, we have spent a significant period reviewing our answers to make sure we pick up the issues that have been raised.

In answer to the question from my hon. Friend the Member for Newton Abbot (Anne Marie Morris), I should say that we have worked with trade bodies to make sure we disseminate information, and I hope good councils will also proactively contact local park owners to transmit it. However, this issue has been so significant and has had such a media presence—indeed, it has had significant coverage from Members on both sides of the House—that no site owner could legitimately say that they did not know about the change. In fact, if they failed to comply with the rules in the legislation, it would be a criminal act, and the council could pursue them.

To conclude, the Government do not see a need to review the 10% commission at this time. As my hon. Friend the Member for Waveney said, it is appropriate, after a period, to reflect on what has happened. However, home owners are in a completely different position from the one they were in before the 2013 Act, and significant safety barriers have been put in place to stop unscrupulous individuals from pursuing home owners’ moneys. It is important that we have clarity and transparency on fees. The ability of councils to go on to a site to pursue malpractice or inappropriate maintenance is some safeguard and some comfort for individuals. I hope colleagues will continue to push the issue and to seek to make sure that greater protections are in place. At this time, however, we do not seek to review the commission on park homes.