Mr Deputy Speaker

I welcome the Hon. Members's efforts to promote growth within the sector of home ownership. I should point out in the current iteration, the sector caps 30%, so in effect, what the Hon. Member wishes to do is to reduce the cap on ownership, which in turn will reduce investment into vital infrastructure that serves authorities, transport, and motorways.

What I find particularly onerous about these franchises, as they are parsed in this legislation, is that they ultimately are and will continue to be run by regional franchise agents who are, in effect, not-for-profit estate agents. They are in charge of assessing your needs and eligibility and will then show you which of their properties you can get, which assesses their own self interest against the pool of applicants. When you move in, they will talk to you about the potential value of your home, and how much you need to aim to save each month in order to buy before the end of the term agreement expires. I concede that is traditional practice, at least, as I'm speaking in part on IRL legislation. Once you are in a property, the agent will check in with you periodically to see if your saving is on track.

I recognise to a certain degree that they can also give access to properties that would otherwise be unattainable for a first-time buyer, and since people will be renting from the franchisees, you are dealing with a 'social' landlord, which may offer some an extra feeling of security, since the state backs the guarantees.

All of this sounds straight forward and simple in principal, but one drawback is that in practice, these agents vary between geographical regions as they are administered by different Registered Social Landlords (RSLs). Some schemes will offer the basic package of a 20 per cent reduction, on a top-down basis from lower tier earners, in rental rate for 5 years, but others will offer a greater reduction or let you put all the rent you pay for the first year alone, which in turn goes towards your deposit when you come to buy the property.

I hasten to add there is quite a great deal of red tape around the money and for this reason lenders choose instead to subtract the lump sum off the value of the house and then lend against this figure, meaning you'll still need extra deposit cash. This is the downside to rent-backed franchising insofar as that many mortgage providers will not assume the rent-back payments as secured deposits.

On a final note, Mr Deputy Speaker, the schemes are designed for those who will buy into a shared ownership scheme at the end of the term period, typically 5 years, and will not allow buying outright. This is the biggest frustration when we deal with issues of shared ownership. If you take 60% to 70% share of the property with a view to incrementally buying a further share, if prices keep rising they can rise out of your price range. A rental period of five years puts people at greater risk of this. I realise I'm more arguing a point against the concept of Rent-to-Own as a whole and less to do with franchises setting their own caps against manufacturing rates, but to support a reduction in the basic rate is not, as I see Mr Deputy Speaker, an appropriate means to an end.