Oral Question: Clause 42 – Site Owner Comission

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John Stevenson (Carlisle) (Con): I want to say a few words about new clause 42. I thank my hon. Friend the Member for St Albans (Mrs Main) for her support, and I entirely agree with what she said earlier.

The Minister will be pleased to know that I do not intend to press the new clause to a vote. However, I seek a reassurance from him that the issue will be properly reviewed in 2017—as has been proposed by Ministers previously—and that, if necessary, the Government will seek to amend the law if that is required.

Given that the Bill concerns housing, there have of course been discussions about home ownership, whether freehold or leasehold, and about tenancies, whether in the private or the social housing sector. There are also different types of housing: detached houses, terraced houses and flats. However, we should not forget the mobile park home. A surprising number of people own such accommodation in constituencies all over the country, and certainly in mine. Under the current law, a site owner can charge a commission of up to 10% on the sale price, which I think many people—including politicians and, especially, mobile park home owners—consider to be grossly unfair and, indeed, outdated. I acknowledge that the commission was reduced from 15% to 10%, so there was an acceptance that it was an issue, but that was back in 1983. I think that we live in a very different world now, and that the 10% commission should be reviewed.

Mrs Main: There are other exorbitant charges. For instance, mobile owners buy their fuel through site owners, who can rack up charges all over the place. This is just another opportunity to milk some rather poorer members of the community.

John Stevenson: That is an interesting point. Although I have concentrated on just one aspect of mobile homes, I think that the 2017 review should consider the issue holistically, across the board, rather than focusing on one or two specific issues.

My new clause would reduce the maximum commission to 5%. I accept that there are counter-arguments. Site owners suggest that the commission forms part of their investment calculations or business models, and can make their businesses viable. They also suggest that a reduction in the commission could result in increased pitch fees or service charges. The Select Committee considered the issue during the last Parliament, and concluded that the commission should remain at 10%. I would ask, however, whether it is right for site owners to benefit from an increase in value when they have not actually done anything. I do not believe that it is.

There are a number of possible solutions. We could gradually reduce the percentage—by, say, 1% a year over five years—to allow site owners to adjust their business models. The commission could be charged only on the difference between the original purchase price and the subsequent sale price. Alternatively, there could be a straight reduction from 10% to 5%, as my new clause suggests. I accept that there could potentially be an increase in pitch fees, but arguably that would reflect the true costs of running a site. Site owners cannot guarantee that they will receive income from any sales because they do not know when those sales will occur.

The new clause is intended to achieve three things. It is intended to highlight the issue in the House, and to remind Ministers that there are different forms of home ownership and this is one of them. Most important of all, however, I seek confirmation from the Minister that the Government will properly and comprehensively review the issue of mobile park homes in 2017, as previously promised.

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