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Housing and Regeneration Bill

moved Amendment No. 114CK: 114CK: Clause 305, page 136, line 38, at end insert ““of the value of the dwelling-house at the relevant time”” The noble Lord said: Clause 305 amends Section 128 of the Housing Act 1985, introduces new Sections 128A and 128B and makes other consequential amendments to that Act. These changes are designed to make the operation of the right-to-buy valuation procedure more responsive to circumstances. The two amendments that we have tabled are intended to clarify that any fresh determination of value arising from the review procedure introduced by Clause 305 must relate to the date on which the tenant in question applied to exercise his or her right to buy. The background to Clause 305 and to these amendments is that, at present, wrong valuations based on errors of fact cannot be corrected without court action, which is time-consuming and costly for landlords and tenants alike. Under Section 125 of the Housing Act 1985, when a tenant exercises the right to buy, the landlord must state the price at which it will sell the property to him or her. It must show how it has arrived at that price, which must be based on its assessment of the market value of the property at the time when the tenant applied to exercise the right to buy. If the tenant is dissatisfied with the landlord's valuation, he may require that the value be determined by a district valuer, an employee of the Valuation Office Agency, a government agency, under Section 128 of the Housing Act 1985. The district valuer's determination is binding on both sides. The Valuation Office Agency is concerned that in a few cases every year—usually no more than 10—it is subsequently found that valuations were flawed because of errors of fact. Such errors usually arise because the valuers used a recently sold property for comparison. They do not usually visit that property, but rely on a database. That is where errors can creep in—for example, such a property may be recorded as having two bedrooms when in fact it has three. Both landlord and tenant see all the details on which the district valuer bases the valuation, and one or the other is often able to spot such an error through local knowledge. Flawed valuations are unfair. If they are too high, the tenant needs an unnecessarily high mortgage or may be unable to afford to buy, while valuations that are too low mean that the landlord and the taxpayer receive a lower receipt than is justified. The new sections added to the 1985 Act by Clause 305 will allow district valuers to withdraw determinations of value and make new ones instead if they decide that their original valuation was flawed, acting either on their own initiative or in response to a request from either the landlord or the tenant. This is not a means for the parties simply to continue arguing about the price—only errors of fact that affect the price by at least 5 per cent will be able to trigger a fresh determination—nor will district valuers be able to withdraw a valuation at any time. Clause 305 provides that the landlord or the tenant may ask for a valuation to be withdrawn only within 28 days from notification of the district valuer's original valuation. The valuer may decide to review his valuation only within 42 days from that original notification. No review can take place if the right-to-buy sale has actually been completed. The amendments we are looking at today are intended to ensure that if a district valuer reviews a determination of value, he or she revalues the property as it was on the date when the tenant applied for the right to buy. That is in line with the existing provisions that ensure that all right-to-buy valuation issues refer to ““the relevant time””—that is, the date of the application. Clause 305 is intended to allow a right-to-buy valuation by a district valuer to be revised but only if the facts on which it is based are shown to be significantly wrong—and within a reasonable timescale. Now, the only way of doing this is, as I said earlier, via some form of judicial review—an unnecessarily lengthy and costly procedure to correct fact-based errors. I beg to move. On Question, amendment agreed to.