Peter Aldous raises concerns about calls to reduce the 10% commission fee to site owners on the sale of Park Homes

Peter Aldous (Waveney) (Con): I am grateful to my right hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke) for securing this debate. I am very much aware of the significant amount of work that she does for park home owners, for whom she is very much a champion. It is right for the House regularly to consider issues that the park home sector faces, and this debate provides us with such an opportunity.
 
The background to this debate is that my right hon. Friend’s constituent Sonia McColl—she runs the Park Home Owners Justice Campaign and is likewise a stalwart champion for park home owners—has delivered a petition of more than 31,000 signatures that calls for a debate on reviewing the 10% commission. I have considered the motion carefully. Although I welcome this debate and understand the reasons and sentiments behind the motion, I am not able to support it. I shall explain why briefly.
 
As has been said, I had the good fortune to pilot the Mobile Homes Act 2013 through the House. It was a privilege to do so and I pay tribute to the other Members who had campaigned for many years beforehand, including my right hon. Friend the Member for Mid Dorset and North Poole, my hon. Friend the Member for Christchurch (Mr Chope), the hon. Member for North East Derbyshire (Natascha Engel), my hon. Friend the Member for Winchester (Steve Brine), my hon. and learned Friend the Member for South Swindon (Mr Buckland) and the hon. Member for Epping Forest (Mrs Laing), as well as Lord Graham of Edmonton and Lord Best.
 
The 2013 Act addresses the appalling practices that have emerged in the sector in recent years, such as park home owners being bullied, intimidated and driven out of their homes by a minority of owners who are, in effect, gangsters. It also puts in place a framework under which park home sites can be better managed in a more transparent way.
 
In presenting the Bill, I was fortunate that a great deal of research had been done on the way the sector worked, identifying the problems that needed to be addressed and coming up with solutions. In many respects, the cornerstone on which the 2013 Act was built was the report on park homes by the Communities and Local Government Committee that was published in June 2012. The Committee considered the 10% commission on sales and heard evidence on the matter. It concluded that the right of site owners to receive up to 10% commission from the sale of park homes should remain. The same conclusion had been reached by the previous Government as a result of their 2006 consultation on park home commission rates.
 
I am mindful of the findings of the research carried out by Consumer Focus, which was published in its report, “Living the dream? An investigation into life on park home sites in England”, in October 2012. It concluded that the issues that needed to be addressed as a priority were improving local authority licensing, addressing the poor maintenance arrangements that prevail on some parks, introducing greater transparency in the process of paying utility bills and, above all else, tackling the problems of sale blocking and intimidation. Its research did not identify the 10% commission rate as a major problem that needed to be addressed as a matter of priority.
 
Annette Brooke: I congratulate my hon. Friend again on the Mobile Homes Act 2013, which addresses the very worst problems, but there is still a lot to be done. Does he not agree that we should look at the issues that concern park home owners in a balanced and unbiased way?
 
Peter Aldous: I agree with my hon. Friend that there is an awful lot of work to be done in the sector. As I complete my remarks, she will see that I do not think that now is the right time to look at this one issue in isolation. The 2013 Act was one of the biggest changes in the sector in 30 years. I think that it needs to bed down and that we should then carry out a full review.
 
I have learned a great deal about the sector in the past two and a half years. One message that I have very much taken on board is the importance of achieving an equilibrium—a balance whereby park home owners can enjoy a high standard of living, a peaceful environment and quiet enjoyment, while responsible site owners can manage their parks efficiently and properly, and make a reasonable living and a return on their investment. In the feedback that I have received from responsible and good park home owners in my constituency, the concern has been expressed that if the 10% commission were removed, that equilibrium would be lost.
 
Given that there are fewer opportunities for new developments on sites and that the lifespan of homes is increasing, site owners are very reliant on pitch fees and sale commissions for their income. The majority of their income is derived from pitch fees—the figure of 70% has been mentioned to me—with sales commission providing much of the remainder. In many cases, the income from sales is the difference between profit and loss. I have seen figures to confirm that. Changing the 10% commission rate might therefore lead to some businesses becoming financially non-viable. That could result in cuts being made in the management of parks, with less money being spent on investment in infrastructure such as roadways, footpaths and communal areas. The result could be that parks take on a more run-down, down-at-heel appearance, which would have a negative knock-on effect on the value of the homes.
 
Stephen Barclay (North East Cambridgeshire) (Con): My hon. Friend speaks with authority, given his long-term commitment to this matter. However, I take issue with his point on the deterioration of standards. Is not the issue the bundling of costs? As a fellow Conservative, I would have thought that he would be concerned at the bundling of costs into an overall price, which means that the sale price and the 10% commission do not reflect the services that are being offered. The review will deliver greater transparency on what services are being offered, what the price of those services is and what competition might be introduced in respect of those services, so that there is not just an overall 10% figure that may or may not have a bearing on what the park owner is delivering.
 
Peter Aldous: In the fullness of time we need to consider the whole way the industry operates, but if we rush in haste to take away this income stream, there is a danger that we may affect viability and cause problems on good parks.
 
Research undertaken under the previous Government in 2002 by Berkeley Hanover Consulting was considered by the Communities and Local Government Committee in 2012, and viewed as still being valid. It suggested that if the 10% commission was abolished, pitch fees would rise by 20% to 32%, which could impact on the attractiveness of the sector. In summary, there is a legitimate worry that changing the rate of commission could have unintended consequences. It could lead to higher pitch fees, which would in effect be robbing Peter to pay Paul. At worst, it could lead to a significant decline in the standard of parks, and their maintenance, state of repair and appearance.
 
Bob Stewart (Beckenham) (Con): Would an increase in fees be fairer than a 10% cut when someone is trying to sell? It seems to me a fairer proposition.
 
Peter Aldous: I certainly take that on board.
 
The Mobile Homes Act was the biggest shake-up in the park homes sector for 30 years, and it will take a few years to settle down and be implemented fully, properly and effectively. The feedback I have received is that the legislation is providing local authorities with the means of working with park home owners to bring rogue site owners to account, ensure that parks are properly managed and run, and ultimately to drive those bad apples out of the sector.
 
There remains much work to be done to make the new sale process work better. On good, well-run sites, in the past home owners have relied on responsible site owners—the good apples—to do much of the work for them when it came to selling their homes. Now that site owners have been removed from the sale process there is a vacuum to fill, and I am afraid that the legal, conveyancing and estate agency professions are not coming forward quickly enough to fill that void. That problem needs to be addressed now.
 
Natascha Engel (North East Derbyshire) (Lab): The hon. Gentleman mentions estate agents. A 10% charge is taken by the site owner, but residents also pay estate agent fees, so that is one injustice. This measure is not being done in haste; as he said, this is 30 years in the making. His Bill was important because it dealt with the most serious injustices, but it left out the 10% commission because it was so complicated and contentious. Why is the hon. Gentleman fighting against a review? We are asking to look at all aspects of the 10% commission, specifically in a review. Why is he so hesitant to have such a review and consider those aspects?
 
Peter Aldous: I am not opposed to a review, as I will say when summing up my remarks, but it is about the timing of that review and the way it takes place. I understand —I would be grateful if the Minister confirmed this when he sums up the debate—that the Department intends to carry out a comprehensive review of the sector in 2016, three years after the Mobile Homes Act received Royal Assent. One of the main tasks in that review will be to assess whether the fit and proper persons test should be applied to those seeking to manage parks, and I suggest that at the same time the whole sector 
30 Oct 2014 : Column 486
 
should be reviewed, including the commission rate. I believe that is the right way to consider this matter, not on its own ahead of that comprehensive review.
 
Those are my findings on this situation, and as I said, we must seek to maintain an equilibrium and ensure that responsible site owners get a fair return. When introducing the Bill it was important to maintain understanding and consensus on all sides, but I fear that we are perhaps in danger of losing that consensus. That is the basis on which I hope we can proceed.
 
3.9 pm
 
 

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