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Housing Authorities

Volume 489: debated on Friday 13 March 2009

The Housing (Service Charge Loans) (Amendment) (England) Regulations 2009 (SI 2009/0602) and The Housing (Purchase of Equitable Interests) (England) Regulations 2009 (SI 2009/0601) have today been laid before Parliament.

The regulations have been made under sections 450B, C and D of the Housing Act 1985 following amendments introduced by sections 308 and 309 of the Housing and Regeneration Act 2008. They empower housing authorities—ie, local authorities and housing associations—to offer interest-free equity loans to the owners (‘leaseholders’) of flats leased from those housing authorities, or to buy equitable interests in such flats. In both cases, this must be for the purpose of assisting leaseholders with the payment of service charges.

Tenants who buy flats from housing authorities and people who subsequently buy such flats on the open market are responsible for contributing towards the cost of repairing, maintaining and improving the properties in which those flats are situated. Some current works of repair, maintenance and improvement to local authority properties are generating high major works bills, particularly in London. The Government have reviewed the issues raised by these bills, and my right hon. Friend the Member for Pontefract and Castleford (Yvette Cooper), the former Minister for Housing and Planning made a written statement to the House on 29 March 2007, Official Report, columns 118-119WS reporting progress and setting out further steps that the Government intended to take to address these issues. In that statement, we said that we intended to legislate to enable housing authorities to offer equity loans to leaseholders and to buy shares in properties to assist leaseholders in difficulties.

The Government are today using the new powers they introduced in the Housing and Regeneration Act 2008 to enable housing authorities to offer equity loans and to purchase equitable interests in properties. It recognises that offering such help will involve administrative costs that housing authorities may wish to recoup by charging fees. We are also aware that high administrative fees might act as a barrier to leaseholders from taking up this offer. We therefore propose to consult in the next few weeks on whether there should be a statutory upper limit on such fees and, if so, what this limit might be.