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Mobile Homes (Pitch Fees) Bill

Volume 827: debated on Friday 3 February 2023

Second Reading

Moved by

My Lords, I beg to move that this Bill now be read a second time. In doing so, I pay tribute to my honourable friend Sir Christopher Chope, MP for Christchurch, who had the wisdom and foresight to choose a Bill that the Government would support and skilfully steered it through the other place in record time. I also record my thanks to the officials who have facilitated its drafting.

This is a very short but effective Bill and I am very pleased that I have been asked to help secure its passage through the House. Its primary objective is to bring fairness to park home residents, most of whom live on low, fixed incomes. The Bill will also make a positive contribution towards addressing the cost of living crisis that many people in this country face, including, of course, park home residents.

Clause 1 amends Part 1 of Schedule 1 of the Mobile Homes Act 1983 to change the inflationary index used by site owners to increase pitch fees from the retail prices index, the RPI, to the lower consumer prices index, CPI. Mobile home residents pay their site owner a pitch fee for the right to occupy a pitch on the site. Pitch fees can be reviewed annually to allow site owners to recover increases in their costs for maintaining and repairing the site, due to inflation. There is a presumption in the Mobile Homes Act 1983 that any increase in pitch fees will be no more than the inflation index defined in the Act. The inflation index is currently defined as the RPI.

RPI is generally higher than other inflationary indices and is no longer used as a measure of inflation. It is not surprising, therefore, that mobile home residents, the majority of whom are elderly, have been concerned that their incomes, which generally increase by CPI, would not keep up with the rise in pitch fees. It therefore seems grossly unfair that this group, who are, as I have already said, mainly elderly and who need the most help, must face pitch fee increases that are higher than the increases in their incomes, and higher than the increases in costs faced by site owners. The Bill will change this by changing the inflationary index from RPI to the lower CPI. The change from RPI to CPI will also apply to permanent pitches on Gypsy and Traveller sites owned by local authorities. Occupiers of those pitches have agreements under the Mobile Homes Act 1983 and will therefore benefit from these important changes, as well as those on private sites.

Clause 2 sets out how the change to CPI will affect the calculation of new pitch fees. I thank and commend the Government for their determination in ensuring that the changes will apply not only to new agreements but to all existing agreements. Noble Lords will know that, save in very few and rare cases, legislation is not usually applied retrospectively. However, if that had been allowed to happen in this case, tens of thousands of residents would not benefit from this important change, at a time when they need it most.

In terms of how the change will affect the calculation of new pitch fees, site owners are required to serve a pitch fee review notice and a form at least 28 days before the review date, which is when the proposed increases take effect. For pitch fee notices issued between now and when the provisions of the Bill would come into effect, RPI would be used in the calculation of the proposed pitch fee. Pitch fee review notices served on or after the day on which the Act comes into force must use CPI in the calculation. If a site owner fails to or does not use the new pitch fee review form, which will be available before the changes come into force, the pitch fee review process will be invalid.

The Bill includes an important protection for residents: it prevents any differences in income for site owners from the change from RPI to CPI, whether real or anticipated, being passed on to residents through the pitch fee. Some owners, I am afraid, constantly find loopholes and unscrupulous methods financially to exploit vulnerable residents. Clause 2 prevents this. It provides that, where a dispute about pitch fees is being determined by the First-tier Tribunal, and the tribunal is satisfied that the site owner has included an amount to compensate them for the financial loss arising from the RPI to CPI change, it will be required to deem the relevant amount to be unreasonable and remove it from the pitch fee. If the Bill is passed, as I very much hope it will be, I count on the Government to make residents aware of this important protection to ensure that they can enforce their rights against unscrupulous site owners who attempt to pass on any unfair charges to them.

If I may add a request of my own to this worthy Bill, it is that the Government stay the course and build on what has been achieved over the last 10 years following the introduction of the Mobile Homes Act 2013, which the noble Lord, Lord Best, successfully steered through this House. In 2013, that Act gave local authorities substantial enforcement powers to tackle those site owners who fail to maintain their sites properly and put residents’ lives at risk. It also gave residents important new rights and reformed the process for selling homes, making site rules and reviewing pitch fees. Those changes have brought significant improvements to the sector.

In their response to the review conducted in 2017, the Government committed to improve the rights of residents and strengthen local authority enforcement powers further. They have made significant progress in implementing these commitments, in spite of the challenges they have faced recently with issues such as Brexit, Covid, et cetera. However, more can and should be done to improve fairness for residents in this small but important sector of the housing market.

I have no doubt that noble Lords present today, and residents in particular, would like to see other provisions included in the Bill. While I share these concerns, the aim of the Bill is to ensure that the many vulnerable park home residents on low incomes are supported at this critical time, when so many people are struggling with current costs. For the reasons I have set out, the Bill addresses only the specific issue of changing the inflationary index used in pitch fee reviews from RPI to the lower CPI. Including any other measures in the Bill at this stage would not only risk its successful passage through both Houses in this Session but leave residents in the unfair position they find themselves in for even longer. It is important that they receive the benefits of the change from RPI to CPI now, to help with the current cost of living pressures and provide them with the necessary additional support that they need. I beg to move.

My Lords, I am grateful to my noble friend Lord Udny-Lister for introducing this small but important Bill, and hope to hear that His Majesty’s Government will support it. It is a shame, however, that during the cost of living crisis England has been behind Wales in making this change for these residents. Most of these mobile or park home sites restrict occupants, within their site rules, to those over the age of 55, many of whom are on a fixed income. The difference between RPI and CPI last November was nearly 3%, so this is not an insubstantial saving for those whose only income may be the state pension or pension credit.

It might seem odd to have primary legislation so intimately involved in what looks like it could or should have been a matter of contract. Although many of these park home sites are well run, sadly, some are owned by criminal fraternities, causing much worry to those who reside on the site and keeping many an MP and council busy trying to sort out the licence holder’s compliance.

When I was Minister for Women and the Government were introducing the domestic abuse offence, including financial coercion, one odd benefit of park homes came to my attention. As these homes are chattels and not an interest in land, you cannot raise a mortgage against them. This is very useful if you have been in a controlling and coercive relationship, where the abuser often gets into debt. Often the means of paying those debts in a coercive relationship, once couples retire and do not have an income, is to empty the asset—the family home—of its equity, with the partner coerced into signatures on such mortgage charges. However, if they have traded down to a park home, the abused partner now has a secure residence and asset, as you cannot borrow against them. It is a happy quirk of this unusual form of home ownership that I thought it would be good to spend a few moments on a Friday putting on the record.

I thank His Majesty’s Government for persevering with this often vexed form of home ownership and hope that they will support the Bill.

My Lords, I am grateful to the House for allowing me to speak in the gap. I associate our group with the objectives of the Bill. Occupants of mobile homes are a very disadvantaged group in many respects. I am familiar with a number of these sites in the Winchester constituency, at Colden Common and Curdridge. I know that they are a very vulnerable group—mainly elderly people who have often missed their opportunity to advance in the housing market. They are now suffering in particular from very high energy costs, because obviously their homes tend to be very poorly insulated. This move to relate the maximum increase to CPI is relevant and should be done quickly in the current circumstances. We are favourable to the objectives of what the Bill seeks to do.

My Lords, I rise briefly to show our support for the Bill, which aims to amend the Mobiles Homes Act. I appreciate the noble Lord, Lord Udny-Lister, for sponsoring the Bill in your Lordships’ House after a smooth passage in the other place. I was quite shocked that it went through all its stages there in one day; it is quite ironic, given that a lot of sensible Bills get blocked. Maybe the Government need to look at that.

As mentioned by other noble Lords, the Bill changes the inflationary measure during annual pitch reviews so that instead of using RPI, the retail prices index, it uses CPI, the consumer prices index, which is a difference of 3%—as mentioned by the noble Baroness, Lady Berridge—that ultimately benefits mobile home owners. This legislation has been in place for several years in Wales—I pay tribute to the Welsh Government—so this is another example of the UK Government lagging behind devolved Governments in improving the law.

I have a few brief questions related to the sector for the Minister. What mechanisms will the Government have to ensure that site owners do not pass the difference between RPI and CPI to residents once the Bill has come into force? What consultation has taken place with the various sector stakeholders on the Bill coming into force? Several issues have been raised about the mobile home sector, including unfair fees and poor maintenance. These sectoral complaints started in 1988 from the homeless charity Shelter, so it is clearly a long-standing issue. Furthermore, a House of Commons CLG report in 2012 stipulated that malpractice is widespread across the park home sector. What do the Government propose to do to deter the unscrupulous park home site owner from exploiting residents and what further powers can they provide to local authorities to monitor or improve site conditions? As always, I look forward to the Minister’s response.

My Lords, I thank my noble friend Lord Udny-Lister and congratulate him on sponsoring this small but very important Bill in this House. I thank other noble Lords for—in most cases—their total support for the Bill, which the Government will be supporting. I also thank my honourable friend the Member for Christchurch, who is behind the bar, I believe. I am grateful for his work in the other place as chair of the All-Party Parliamentary Group on Park Homes. He has been a consistent champion of mobile home residents, and for that we are very grateful.

Mobile homes, also known as park homes, are a unique and important part of our housing sector. There are about 160,000 people in England living in mobile homes. Many, but not all, mobile home residents are older people on fixed incomes, for whom the rising cost of living is a real concern. The Government recognise this and provided support of up to £1,200 last year to those who needed it most. This Government are also committed to reforming the mobile homes sector to improve the lives of all residents and help responsible site owners.

We began these reforms with the introduction of the Mobile Homes Act 2013, important legislation which has made significant steps towards more effective and modern regulation of the sector. The 2013 Act strengthened the rights of residents and gave local authorities substantial enforcement powers, which I think answers some of the queries from the noble Lord opposite. In 2017, we carried out a review of the legislation and the evidence clearly showed that, overall, the Act had been effective and had made tangible improvements in the lives of many residents. However, there were issues that still needed further attention, including residents’ ongoing concerns about the impact on their finances from the continued use of RPI in annual pitch fee reviews. Having considered arguments and concerns about affordability for both residents and site owners, we concluded that the consumer prices index—the CPI—was the most appropriate index for annual pitch fee reviews. In our response to the review, we made a commitment to bring forward primary legislation, when parliamentary time allowed, to change RPI to the lower CPI. This is the Bill before us today.

The changes we are making will be an important contribution to easing pressures on residents. I am grateful to all noble Lords for their support and desire to get this Bill through as quickly as possible. This Bill, when enacted, will help residents with the cost of living pressures by changing the inflationary index used in pitch fee reviews from RPI to the lower CPI. With the incomes of many residents rising by CPI, the changes will mean that pitch fee increases and residents’ income will be subject to the same measure of inflation.

To conclude, mobile home residents may represent only less than 0.5% of the housing sector but some are among the most vulnerable in our society. There is more that can and must be done to address the problems they face; we fully understand why some residents would like to see additional measures included in the Bill. As was brought up by almost all noble Lords, there is more we can do to help these particular homeowners. I assure noble Lords that we will continue with the reforms to the sector that we have committed to introduce to improve the lives of residents. The priority for today is to ensure that this Private Member’s Bill, which is aimed at addressing the narrow but important issue of changing RPI to the lower CPI, goes through Committee swiftly, passing in time to make the much-needed changes to the lives of residents. The Government are proud to back this Bill and wish it a safe passage through its remaining stages.

My Lords, I thank everybody who has spoken for their support, right across the House, and for getting this Bill to where it is today. I also add my thanks to Christopher Chope MP, who started this in the other place and got it through in record time. I hope that we can get it through in record time here. The quicker we can move from RPI to CPI, the better. There are provisions within the Bill to ensure, as I have already said, that it can be retrospectively applied in the way it is structured and the way in which the notices are processed. I commend the Bill to the House.

Bill read a second time and committed to a Committee of the Whole House.