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Rateable Values

Volume 164: debated on Friday 12 January 1990

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To ask the Secretary of State for the Environment if he will publish the report by consultants on substitutes for rateable values as they are used in housing legislation; and if he will make a statement.

Copies of the report by Price Waterhouse on market rents as substitutes for rateable values as used in housing legislation have today been placed in the House Libraries. The consultants were commissioned to survey rents in certain sectors of the private rented market, to provide evidence on which to base substitutes for the rateable value limits which define protection under certain rent, landlord and tenant and housing Acts, and to make recommendations. The proposed substitutes, set out in the table, would apply to agreements made on or after 1 April when the community charge comes into effect. They will be provided by means of regulations under section 149 of the Local Government and Housing Act 1989, applying in England and Wales, to come into force on 1 April.

Housing Act 1988: Rent Act 1977 (new tenancies)
Upper Limit for protectionIn Greater LondonTenancies with an annual rent of less than £25,000 (excluding certain service charges)
Outside Greater LondonTenancies with an annual rent of less than £25,000 (excluding certain service charges)
Lower LimitIn Greater LondonTenancies with an annual rent of more than £1,000 (excluding certain service charges)
Outside Greater LondonTenancies with an annual rent of more than £250 (excluding certain service charges)
Landlord and Tenant Act 1954 Part I: Local Government and Housing Act 1989, Schedule 10
Ground rent qualificationIn Greater London£1,000 pa
Outside Greater London£250 pa
The upper limit will broadly be based on the rental equivalent for the premium paid ie an annual equivalent payment taken over the unexpired length of the lease, assuming a maximum lease length of 100 years. The annual equivalent would be derived using the formula shown in the consultants' report, using an interest rate of 6 per cent. Both inside and outside Greater London, it is proposed that protection will generally apply to leases where the rental equivalent of the premium computed on this basis is £25,000 pa and below.

Leasehold Reform Act 1967

Both the ground rent and the upper limit qualifications will be the same as those under the Landlord and Tenant Act 1954, part I, and Local Government and Housing Act 1989, schedule 10, above.