Sale of Park Homes

Stephen Lloyd Excerpts

Thursday 30th October 2014 Commons Chamber

[Natascha Engel]

That is a key element, and the Park Home Owners Justice Campaign group has made exactly that point. How can the charge be such a fundamental part of the necessary profits of site owners—it is necessary according to the site owners—if they cannot say when the profits will come? I will go into more detail on that.

Hon. Members are enormously grateful to the hon. Member for Waveney (Peter Aldous) for promoting as a private Member’s Bill what became the Mobile Homes Act 2013. It has and will make a huge difference. The Act is bedding down. He is very lucky to have so many good apples as site owners in his constituency. All the bad ones have come to mine. As a result of the Act and other legislation, the intimidation has stepped up a level. As campaigning MPs, we need to ensure the involvement of the local authorities.

I do not recognise the picture the hon. Gentleman paints. I understand the importance of consensus, and as hon. Members have said, we do not want to deny park home site owners a good living. They have a very good living at the moment. All we are fighting for is justice. The 10% commission is a fundamental injustice in the sector and I will go into detail to explain why.

The 10% commission is a flat fee. It was initially intended as a maximum commission, but it is a flat fee of 10% no matter the value of the home, how long somebody has lived there, and what improvements people have made to their homes. The homes in my constituency are absolutely beautiful. There is a reason why the report mentioned by the hon. Member for Waveney is called “Living the Dream”. It is absolutely idyllic living on a park home site with like-minded people. It is quiet and beautiful and on the edge of beautiful countryside. It should be absolute heaven in retirement, but improvements are paid for and done at great cost to the people who live there, not to the site owners themselves.

The biggest reason the site owners give, as the hon. Member for Waveney said, is profit margin. With the profit margin, 70% comes from pitch fees and 30%, as the right hon. Member for Mid Dorset and North Poole mentioned, is from income that is not secured—residents do not know when it is coming. They are told that it is an essential revenue stream for the maintenance of park home sites. I can hear almost every single one of the 600 residents in North East Derbyshire sighing and saying, “If only”. On the sites we go around, there are loose cables and tree roots growing into water pipes that are not being repaired. Massive costs are incurred where there are leakages. As we all know, utility bills are collected on the whole of the site—there is one bundled-up price. Therefore, if the site owner does nothing about the burst pipes, it is the residents who pay.

[Stephen Lloyd (Eastbourne) (LD)]

Does the hon. Lady agree that there are numerous examples—certainly on pitches in my constituency and probably on those in the constituencies of other hon. Members—of site landlords simply refusing to act? They are challenged; something is pointed out to them but they simply do nothing.

[Natascha Engel]

Yes, and I go back to the point about the type of residents. There are some brilliant campaigners, but all of them are very elderly. What can they do if a site owner is never to be seen, especially when there is work to be done and something has to happen? They are either left to do it themselves—a lot of people are just not able to do it themselves—or they have to live with the fact that there are lots of dangerous things lying around and things are just not sorted out.

We hope that enforcement on the part of the local authority can now happen, but it is very difficult to do in practice if a park home site owner is reluctant to do anything because it costs them money and bites into their profits.

--- Later in debate ---

[Stephen Lloyd (Eastbourne) (LD)]

I apologise for coming late to the debate, Madam Deputy Speaker. I had to deal with an urgent constituency matter, and I want to put on record my apologies to you and to the previous Deputy Speaker.

My right hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke) has been a doughty campaigner on this issue for many years and I congratulate her on securing this debate. I am also grateful to my hon. Friend the Member for Waveney (Peter Aldous) for introducing his private Member’s Bill. It took 30 years to enact legislation on this matter, and I should like to express my tremendous appreciation to him for enabling that to happen during his first term in the House. It is also a pleasure to follow my hon. Friend the Member for Stafford (Jeremy Lefroy) as I agree with all he said about transparency. The hon. Member for North East Derbyshire (Natascha Engel) passionately evoked the issues.

I have mobile home owners in my constituency. I supported them as best I could as a candidate before I was elected, and it was then that I came across their astonishing lack of power over their own homes. It was absolutely incredible. As the hon. Member for North East Derbyshire said, these homes are not caravans; some of them are absolutely amazing. They are meticulously kept, with beautiful carpets, for example. They are beautiful homes.

Significantly, the vast majority of the mobile home owners are elderly. Having discovered the lack of power that they had, I then discovered the astonishing influence and sheer maliciousness of some park home landlords. I simply could not believe it. As a naive young—or perhaps middle-aged—candidate, I went to the council, but I was told, “Stephen, what can we do? We don’t have the power to do much about this.” That is how I first learned about the process. I have been a close colleague of my right hon. Friend the Member for Mid Dorset and North Poole for many years, and under her guidance I have since learned a lot more about the iniquities of the system.

On behalf of my constituents, I am particularly grateful to my hon. Friend the Member for Waveney for his private Member’s Bill. I hear his suggestion that we allow it to bed down for a few years, and that we should perhaps step back and take a little heat out of the process so that we can see how it is working—I have tremendous respect for my hon. Friend, with whom I have worked in a number of cross-party contexts—but I disagree with him on that point. I will tell him why.

If I were to sell my house tomorrow, I would be charged between 1% and 2%. Estate agents’ rates are very competitive at the moment. The last time I sold a house, it was valued at about £230,000, so a fee of 2% would have been a couple of thousand pounds. If I had been selling a mobile home, however, it would have cost me £25,000—£2,300 in estate agent fees, plus an extra £23,000. I would have been paying that to the landlord or leasholder, and that is mind-blowing. That would not be so bad if I had tarmac that was always swept and looked after, lights that were kept on and repaired whenever they were broken, bushes and shrubbery that were cut and a landlord who treated me and all the other park home owners with respect. I would still resent it, but I would probably manage my resentment. However, if I was treated with the absolute contempt with which, as I have discovered over the years, some, but not all, park home leaseholder owners treat their tenants or mobile home owners, it would go beyond what my hon. Friend the Member for Beckenham (Bob Stewart) described as “daylight robbery”; it is theft. If the wider world knew that this was common practice and estate agents, who are not popular at the best of times for charging 2%, were getting 10% on top of that, it would just be unacceptable. Why has it gone on for 30 years? It is because this is a small sector; it is a niche. Sadly, before the involvement of the doughty Sonia from the constituency of my right hon. Friend the Member for Mid Dorset and North Poole and the other amazing people who brought this practice to our attention and to that of the public, it went on for many years. Not only were people treated very badly, but they were losing a fortune. It is disgraceful.

So where are we at? The Welsh recognise that the review needs to happen sooner rather than later, so they are going through the process right now. What I say to both Front Benchers is that this is a cross-party issue; there is no problem here. I pay tribute to some of my colleagues who have been pushing this issue for years. We all now understand that the current situation is wrong and it is time that we did something about it. The review should be independent, involving actuarial specialists and estate agents and so on. People who really understand this sector should, independently, have an input to the review and come up with a number of recommendations. They may well say, “Actually, we should keep a commission because of the uniqueness of park homes. Let’s make it 5%, but for that you get X,Y and Z. You get the lawns cut and you are looked after. It is a service rate, like the one that people pay in an apartment block. If you don’t meet that service rate, there are penalties.” This is not difficult, it can be done and there is a cross-party consensus. The first step is to have the review, with robust independent lay people on it, plus specialists and representatives from each of the areas. It will then come up with recommendations, and I am as certain as I can ever be that once the recommendations are made, be it under the coalition Government or whoever the Government are after the general election, there will be a consensus in the House and they will be passed quickly. I hope to receive that commitment from both Front Benchers at the end of this debate.

--- Later in debate ---

[Mr Wright]

I understand where the hon. Gentleman is coming from, but my main point is to do with that 10% commission on sales as part of the overall fee regime. With his permission, I will elaborate on that, as it is an incredibly important matter. Forgive me, Madam Deputy Speaker, for not being here at the start of the debate when this issue must have been touched on time and again. I am keen to push the idea that the fee regime should be as transparent as possible.

I want to preserve the unique character of park homes that attracts older owners to want to live there. In many respects, therefore, there is possibly an argument that the site owner should be able to vet potential buyers. However, it cannot be right that the home owner is unable to sell his or her asset, in most cases the biggest asset they have, without first seeking approval from the site owner and then paying 10% for the privilege of doing so. I cannot see how that is fair at all.

[Stephen Lloyd]

Does the hon. Gentleman agree that it is almost feudal to expect park home owners to go through that process?

[Mr Wright]

I came into the debate during the hon. Gentleman’s excellent contribution, and I agree with him. I was going to touch on that. He used the word “feudal”; I have the word “archaic”. It is so old-fashioned in the 21st century, and not appropriate these days. We need to ensure that the balance of risk and reward is pushed more firmly towards home owners than site owners. That is why the Government should look again at the 10% commission on sales, as part of the wider review of all costs and fees relating to park homes. I really liked what the hon. Gentleman was saying as I came into the Chamber, which was about ensuring that any commission was linked to proper clarity on maintenance and improvement of homes. At the moment, we do not have that relationship, so the costs of maintaining and improving sites and how that will be paid for are not clearly stated and understood. The hon. Gentleman was absolutely right, and I would like to see that.

There are long-standing problems within the sector, and, as I have said, far too often the balance of power tilts away from the home owner. When I was in office, I was keen, on behalf of the residents of Elmtree and others throughout the country, to ensure that they received fairness as part of a well-functioning park homes sector. That 10% commission now needs to be driven down as much as possible, if not eliminated. Greater transparency on fees needs to be considered as part of that wider regime. I hope that the Minister will reflect on that and wish to advance those aims on behalf of park home owners everywhere.

--- Later in debate ---

[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.

[Stephen Lloyd]

I concur completely that it is not always the case, but does the Minister agree that, whether or not the operators maintain their sites, they still receive the 10%?

[Brandon Lewis]

Yes. The hon. Gentleman is absolutely right. The fact that some do not bother to maintain their sites should be dealt with. It is for the local authority to tackle the issue through the new licensing enforcement tools introduced by the Mobile Homes Act 2013, which was promoted by my hon. Friend the Member for Waveney and came into force just a few months ago, in April 2014.

The answer to poorly maintained and managed sites that suffer from a lack of investment in their infrastructure is to use that new law and report poor conditions to the local authority, which under the licensing powers can require the site owner to spend money on improving conditions.