Mr Richard Bacon (South Norfolk) (Con)
I beg to move, That the Bill be now read a Second time.
It is my honour and pleasure to move the Second Reading of my Bill today. My interest in this subject was initially prompted by the fact that I represent the very rural constituency of South Norfolk, which has many young people who find it very difficult to get on the housing ladder or to find any place to live when they grow up and leave home. The idea of being able to stay in the area, let alone the village, where they grew up or to be near their parents is sometimes completely outwith the range of possibilities for them in a very rural area with many small villages. Of course, some young people will go off to big cities—in our case, to Norwich or cities in Essex, as well as to London or elsewhere—but the fact is that we do not have enough housing in our rural area. What has become apparent to me, and it would be apparent to anyone who takes notice of the debate across the country, is that the problems of housing are just as acute in many urban areas. In some cases, the problems elsewhere are even broader.
There is a very important but underestimated issue about how we unlock the energy latent in the population and deploy it to get more housing. The fact is that many millions of people in this country would like to get a piece of land and build their own house. The National Custom & Self Build Association estimates that about 1 million people would like to do it in the next 12 months, and that more than 7 million people would like to do it at some point in their lives. The availability of means to turn this latent desire or pent-up demand into something real—in my view, it would do a great deal to fulfil the nation’s housing needs—have been remarkably lacking. We have a housing market, if we can call it that, that is sclerotic.
Slightly more than 12 months ago when I was at the party conference in Manchester—I have recently returned from this year’s conference—house builders were still talking about how the housing market was quite fragile. They said that there was no certainty about the recovery, and that the sector still needed support. Yet only two or three months ago, the newspapers were full of stories about a housing bubble. It is quite remarkable how one can go from near stasis or sclerosis to a housing bubble within 12 months. It seems improbable that that would happen if we had a well-functioning housing market. In fact, it happened because we do not have a well-functioning housing market: the supply of housing does not rise to meet the demand for housing. We have a systemic problem or a sustained disequilibrium, to use the jargon, between the number of people who want houses and the supply of houses. There are a whole range of very understandable reasons for that connected with the structure of our planning system and the number of large-volume house builders who provide a great deal of the housing in this country, as well as the interplay between those two factors and between the large-volume house builders and the capital markets.
Although we do not have equilibrium, it is no good blaming anybody. I attended the debate on housing supply in the summer, which was moved by the hon. Member for Wolverhampton North East (Emma Reynolds). I found it a rather appalling and depressing experience, because the first hour and a half was taken up with hon. Members on both sides of the Chamber essentially shouting numbers at each other about who had not done what. Shouting numbers will not get us far. Indeed, announcing targets will not necessarily get us far. If targets were the answer, we would probably have solved the problem by now.
One of the most interesting facets of public policy in recent years has been the widespread recognition, for example in policing, health and schools, that targets have often made the situation worse and allowed people to game the system. I am not sure that that is quite true of housing, but there is certainly a broad recognition in many areas of public policy that instead of worrying about numbers and setting targets, one should focus on removing the blockages that prevent the system from flowing smoothly. In other words, to use the term of art coined by John Seddon, the occupational psychologist and management thinker, if one spends more time studying “how the work works” and attempting to remove the blockages in the flow of how the work works, one frequently gets improvements in performance much greater than any target one would have dared to set. We have seen that again and again in different parts of local government, where we have had startling successes in performance improvement by taking that approach.
People have asked me whether it would make a difference if we had a statutory right to get a piece of land and build a house. They ask whether I can point to a number and say, “That is how many extra dwellings would be created as a result.” The answer is, “No I can’t, and I’m not even going to try,” because the question misses the main point: that there is enormous pent-up demand among people who wish to get a piece of land and build a dwelling of their own, but it does not have an outlet because the blockages are too severe.
My humble Bill seeks to do two things: to create a register containing information on people who wish to get a piece of land and build a dwelling—individuals and associations of individuals—and to ensure that local councils have regard to that register when bringing forward their housing plans. I believe that such house building could make a significant difference if it were built into the warp and weft of the housing plans of local authorities and became, as it were, part of the new normal. A number of other steps would need to be taken in parallel for it to become part of the normal landscape, rather than an activity for an eccentric or highly wealthy fringe, as it is still too easily characterised. I will say more about the things that need to happen in parallel later, but I just say, to emphasise the point, that we need to take a broader view of the parameters of what is possible in trying to make our housing supply function properly and rise to meet demand.
This agenda touches on a far broader range of issues than I at first realised. It is not just about rural areas and urban areas, but touches on social cohesion, reoffending and disability. Stella Clarke, who runs the Community Self Build Agency in Bristol, has young people, who 10 or 15 years ago would have been rioting, literally building their own stake in the community. She has found a way to help young unemployed people who are in housing need to take action to shape their own future. Ex-service personnel, who had always had the accommodation that they needed provided for them in the forces, but who sometimes lose their way when they leave the discipline of the military environment, have been helped in the same way.
The front page of the Community Self Build Agency website quotes a local resident who was helped by the agency:
“I was encouraged by the local council to apply for the CSBA Scheme, I rang them and said; ‘I am disabled, unemployed, on benefits and I know nothing of building.’ They said; ‘You fit all the criteria!’ I have never looked back.”
We need to open our eyes to the parameters of what is possible if we are to unlock the energy of our people.
There are many people I need to thank for their help and advice on the Bill. First, the Minister’s terrific team at the Department for Communities and Local Government has helped me enormously in making the Bill technically sound. I thank Ted Stevens, who until recently was the chair of the National Self Build Association, which is now called the National Custom & Self Build Association, as well as his successor as chair, Michael Holmes, and the association’s members and supporters.
Ted Stevens was instrumental in a visit that was made by the all-party parliamentary group on self-build, custom-build and independent housebuilding—we were looking for a snappy title, Mr Speaker. We will shortly be changing the title to self-build, custom housebuilding and place-making, which I wish we had called it in the first place, to connote the important difference between building boxes on the one hand and using a bit of thought to shape places and communities that work as places to live on the other.
Ted Stevens was instrumental in helping the all-party group with our trip in the summer to Berlin to look at the Baugruppen, or building groups. More than 300 such groups have sprung up in Berlin, delivering more than 5,000 dwellings. I am delighted to see the hon. Member for Nottingham North (Mr Allen) in his place, who came on the trip. We were accompanied by senior officials, right up to director general level, from the Department for Communities and Local Government, as well as a range of housing experts from around the country, including from the Scottish Government. It was an extremely enlightening visit.
One thing that became apparent was that if the local authority—in this case the Berlin senate—co-operates with and encourages activity by people from the bottom up, there can be a surprising range of results and a surprising speed of delivery, and more can be done than is currently done in this country to meet housing need. I think we could import some of the ideas that we saw in Berlin to this country. I am conscious that one cannot just take a model and lift it across, because one has to take account of local circumstances, but the fact is that the Baugruppen have contributed nearly 200,000 dwellings in Germany. It is not a small sector, but a significant one.
I received an e-mail from a lady in Yorkshire a few months ago who had heard about my Bill, saying that she and her husband had been looking for a piece of land for five years, and that they were no further forward now than on the day they started. She said, “It seems as if in this country it will never be, as it is in Germany, a middle-age right of passage that you can go and get a piece of land and build a house.” In Germany, if somebody wants a piece of land, they go to their local authority and say, “I’d like a piece of land please.” The way the system works in Germany is that the land is, in the first instance, sold by landowners to the local authority. I am not saying that we necessarily need to repeat that system here; I do not think that we do. I am just telling the story because I think that it is illustrative.
When someone asks for a piece of land, the local authority says, “Would you like a big one or a small one?” The big ones are slightly disproportionately expensive to subsidise the smaller ones, which are slightly disproportionately cheaper. That is relatively easy to do and there is no chronic shortage; and that in a country where, as anyone who has been listening to Neil MacGregor’s wonderful programme about Germany on Radio 4 will know, a third of the land area is forest. I will not segue into a great soliloquy on the importance of hugging trees and the German soul, because it would be outwith the bounds of this debate, but the fact is that there is plenty of land and it can be done.
One thing that people do not understand in this country, which they really should—I have dwelt on this and have tried my best to get the point across—is how much land we have. Only 1.2% of the land area in this country is taken up by houses. We could double the number of houses in this country, if they took up the same amount of land, and still have 97.6% of the land not being taken up by housing. Surrey has more land devoted to golf courses than to houses, and that is in the rich south-east. These are important facts—I am not making them up.
I have taken the official statistics from the Department and asked The Daily Telegraph to publish them. The senior political correspondent of The Daily Telegraph, Christopher Hope, has been running a very successful campaign for years to point out that the wicked Conservatives wish to concrete over England. Sometimes he gets one of his reporters to phone me up, and she says, “You’re a rural MP. You’ll be worried about all this extra housing.” I then give the reporter 10 or 15 minutes on why we need more houses, and because she phoned me and it would be really rather rude to put the phone down, she has to sit and listen. I know full well that they will not actually quote me, and they never do, and then instead I see a quote from somebody else saying, “It’s disgraceful—there are actually people who think we should have enough houses for everyone in this country. It’s wicked.”
The fact that Mr Hope is my brother-in-law is simply annoying, but I hope that at some point I can persuade him to publish the facts about what is going on. A ludicrous dichotomy is emerging—the idea is that people either want to concrete over England and do not care about beautiful scenery, or they only care about beautiful scenery and do not want there to be enough dwellings for all of us to have somewhere to live. I do not know anybody who falls into those categories. Most of the people I talk to both love beautiful scenery and want somewhere to live. My firm belief is that both are possible, and I hope that my Bill will make a contribution to making that happen.
Emma Reynolds (Wolverhampton North East) (Lab)
I welcome the hon. Gentleman’s bravery in taking on the Telegraph in the form of his brother-in-law. According to the national land use database, 5.4% of land is homes and gardens, and only 1.1% is the homes themselves. Not only are we not concreting over the countryside, we are dedicating a large percentage of the land that is developed to gardens.
Mr Bacon
Indeed. When I talked about 1.2% of the land—the hon. Lady said 1.1%—I was referring to houses. She is right that gardens take up at least another 2% or 3%. I believe that railways take up 2.2%, and that the built environment as a whole, including absolutely everything—factories, offices, roads, railways, churches—takes up about 9% or 10%, so 89% to 91% of our land area is not built on.
I am sure that there will be discussion of the green belt, but I will not dwell on it, partly because we do not have any green belt in Norfolk. Searching Google images for “green belt” gives maps of where the green belt is, showing that none of it is in Norfolk. We have a huge amount of land, and the green belt is an unfortunate distraction. It has been created in such a way that there are places that are not in the green belt, including in my constituency, that I would be horrified to see built on. I would sit in front of the bulldozer to prevent it. There are also places that are in the green belt but probably should not be. We need to be more intelligent about that. Personally, I think people’s instinct to preserve beautiful countryside is good, and I completely support it. The Campaign to Protect Rural England wrote to me saying, “We’re interested to hear that you’ve got a Bill, and we are quite supportive of this sort of approach, even though you might think that all we’re interested in is hugging trees and protecting wild animals.”
Mr Andrew Turner (Isle of Wight) (Con)
I, too, am concerned about the issue of the green belt. We do not have any green belt on my island, but a lot of people talk of it as though it were green belt and are surprised when building on it is not stopped.
Mr Bacon
My hon. Friend has a good point. The Isle of Wight is one of the most beautiful parts of the country. If we had the north American approach of zoning, which is much harder-edged and makes it absolutely clear whether somewhere can ever be built on, we might make more progress. That is probably outwith the terms of the debate, as would be a long discussion of the green belt, but it is an important point because it relates to people’s deep instincts about land use. Those instincts are sound in many ways, because we want to protect beautiful countryside. As a representative of a rural area with a lot of farmers, I should say that we also want to keep land to grow food on.
Mr Mark Spencer (Sherwood) (Con)
I trust that my hon. Friend recognises that to a developer, the choice between developing a brownfield site, which may have problems of industrial waste or contamination, and developing a greenfield site, which carries none of that extra development cost, makes them much more likely to want to pursue a greenfield or green belt option rather than a more challenging industrial brownfield option.
Mr Bacon
I completely take my hon. Friend’s point. I suppose I would reply, with the Irishman, “I wouldn’t have started from here”, but the developer is presented with the narrow choice that my hon. Friend describes. I should say in passing that one event that I attended at our party conference featured someone from the London assembly who was trying to get some brownfield sites in London made available for housing. They kept on encountering planners who said, “Hands off our strategic industrial land. We need to keep some brownfield land.”
The argument is complex and nuanced, and my hon. Friend is right about the costs of dealing with contaminated land, but in a more fluid and well-functioning world, the responsibilities that sit within the public realm for making land available for use and providing services for it would work differently. In Victorian times, the local councils or corporations—those great Victorian institutions—took it upon themselves to build the infrastructure they needed, such as roads and sewers. The fact that they did that so well is the reason why it has lasted so long and why we now have 100-year-old sewers that need to be replaced through private finance initiative schemes. The only reason they have lasted so long is that the Victorians did such a good job. They went into the market and issued bonds, and they borrowed money. The Bolton Corporation, the Corporation of Birmingham and other great Victorian civic institutions, from when local authorities had a bit of self-respect, did great work and provided the environment in which private individuals could build. Many splendid developments were built, quite dense and quite high, and we can see many still standing in London and our other great cities.
The problem that we have now is that strategic land promotion is, in a way, done by the wrong people. I will come on to the issue of volume house builders, but I will mention them now since my hon. Friend has triggered the point. I do not blame volume house builders for acting in a rational manner, and people who are surprised that they construct dwellings only when it is profitable to do so need to wake up and smell the coffee. Of course that is how they will behave, and we cannot be in the slightest bit surprised. The point is not so much that we encourage them to do a quick job and get out, leading to buildings of substandard quality and durability and poor longevity, but that we require them to do that. They are forced to act in a deeply sub-optimal way in a flawed system. We need a much more patient approach to the employment of the capital that is needed.
We can look at some of the ancient estates that undertook construction years ago, including in London, and still own the properties that were built, or at least the freehold to them, many decades or hundreds of years later. One is the Duchy of Cornwall—there are not that many 600-year-old private ducal estates with the explicit purpose of providing an income for the heir to the throne, but it has been doing its job quite well for 600 years.
Mr Spencer
Surely the planning authority is the ultimate authority, and local authorities should be much more robust in forcing developers to consider brownfield sites before they allow greenfield sites even to be considered. I do not know whether my hon. Friend’s Bill would assist in any way in freeing up brownfield sites first.
Mr Graham Allen (Nottingham North) (Lab)
I congratulate the hon. Gentleman on introducing his Bill, which I am here to support. I had not anticipated making an intervention about the much bigger issue of devolution in England, but he is making a strong case for enabling local authorities to have the independence, the powers and the finance to make decisions and judgments as they see fit. That would enable the sort of building that we saw in Berlin, which the Berlin local council initiated just after the second world war. The marvellous dwellings that we saw would not exist were it not for that freedom and finance. Perhaps I can draw him, provided that he does not go out of order, into the argument about freeing up local authorities to get on with that.
Mr Bacon
The hon. Gentleman makes an important point, and the issue is broad and deep. The fact is, many people who go into the planning profession do so because they are driven by a desire to help shape the community and provide better places for us to live. Then they get into a local authority, with the extraordinarily complex planning environment in which it operates—I commend the Government for scything away hundreds of pages of planning law so that an ordinary lay person can read it and have some hope of understanding it—and suddenly find that instead of being able to help shape the community and think logically, they are the person who says no the whole time. They do not like being that person, so the good ones often leave. That is a dreadful caricature and it is not true that the only people left are the malign and mediocre, but hon. Members will get the point.
Some people who go into planning with the best of motives end up leaving. I have met such people, and when I present that caricature they say, “Yes, I used to be one of those people; I found I couldn’t do anything.” Think about where planning authority power sits. My local district council is the council tax raising authority and the planning authority, and 1p on council tax raises only about £60,000 for it. Will it be able to stand up to a large developer? There is an enormous asymmetry of power; it cannot take rounded decisions in a responsible and representative way on behalf of the people it governs locally, as I and the hon. Member for Nottingham North (Mr Allen) would like. Once again, however, I fear that reforming the whole of local government and making it flow and function as it should is probably outwith the terms of my Bill.
On patient capital and the Duchy of Cornwall, let me talk about Poundbury, which is an urban extension of Dorchester. I went there last year with the Public Accounts Committee when we were looking at the Duchy of Cornwall, and again this summer with a number of colleagues. As for the Georgian pastiche—like sugar in tea, some people like it and some people do not—I happen to think that if it is well done, and some of the pastiche in Poundbury is extraordinarily well done, it is rather good, and it is built to a very high standard. If one stands near the farmhouse and some of the oldest developments that have been there for nearly 20 years by the mature trees, one would swear one was in Islington or Camden 150 years ago. People like that and want to live there.
What is really interesting, however, is that Poundbury is now 21 years into a 33-year project. Last year, they had done more than 1,000 dwellings and 1,600 jobs. Now they have done 1,200 dwellings and more than 2,000 jobs. The target for 33 years was only 2,200 jobs, so they have nearly reached the target in two-thirds of the time. The dwellings are becoming more and more attractive, and the most fascinating thing is that when firms such as Barratt are allowed to build there, they have to build to a very tight design code, and they pay a premium for the land compared with what they pay elsewhere. On the surrounding land belonging to different land owners there is a halo effect, because people look at it and say, “Phwoar—I’d like some of that!” Instead of boxes on the greenfield at the edge of the town, which is easier and cheaper to build on than the brownfield mentioned by my hon. Friend the Member for Sherwood (Mr Spencer), the value of the last house built is higher than that of the first house built, which is rarely the case in most big house building developments.
I will make a bit of progress and try to whizz through the rest of my thank you list because I would like to get on to the substance of my Bill. As it is such a humble little Bill, I hope that will not take too long.
Lord Richard Best, president of the Local Government Association, has been enormously helpful and supportive to me, as has a group called Housing People, Building Communities in Liverpool. It has an award-winning self-build project on land provided by the Roman Catholic diocese. I recently met the Bishop of Rochester, James Langstaff, who leads for the Church of England on land and property. He is hoping to link the dioceses across England with the vanguard councils that were recently announced by the Department for Communities and Local Government. The National Housing Federation has also been amazingly helpful and supportive. Being at the cutting edge of technology, I am sure that the Minister will be aware that 12 November is #housing day. I am even more impressed by its December Christmas campaign, Ho Ho Homes for Britain. Somebody should probably get an award for that, even if it is only a bar of chocolate.
Mr Speaker
Order. The hon. Gentleman is indulging in what I think I can accurately describe as preliminary dilation. If it is of any encouragement or succour to him, I have the very keen sense that the House is enjoying his preliminary dilation, and I am a little alarmed by the thought that he might, as he put it, “whizz through” the rest of his remarks. I do not think we would want him to do that.
Mr Bacon
I feared that my speech would be more like Oscar Peterson than J. S. Bach, and so it is proving, but I will conclude my thank you list because I want to move on. Lloyds bank has been tremendously supportive to the planning sector. Stephen Noakes is head of mortgages at Lloyds bank, and the current chairman of the Council of Mortgage Lenders. He supported our all-party group on self-build, custom-build and independent housebuilding when we had a meeting last year with the university of York. It launched a report on blockages in the self-build and custom house building sector, and Stephen Noakes was a sponsor of that report. Earlier this year we had a meeting with Kevin McCloud in a Committee room upstairs. The meeting was packed with MPs and peers, Stephen Noakes was also there and I found myself on a panel with him at the party conference. Earlier this week Lloyds bank announced a £50 million fund for small house builders to encourage a sector that has been decimated.
When we consider what happened after the housing crash, and the fact that many big banks, including Lloyds bank, decided at the highest level to shrink their exposure to property on their balance sheet, the fact that such institutions are making long-term commitments is extremely welcome. Lloyds bank has created the Lloyds bank commission on housing to explore and address such issues. That is chaired jointly by two of the Minister’s predecessors—my hon. Friend the Member for Hertford and Stortford (Mr Prisk) and the right hon. Member for Greenwich and Woolwich (Mr Raynsford), and they will bring together in that commission a range of housing experts.
On the front of a recent document Shelter asks the extremely important question:
“Where are our children going to live?”
When one looks at the Lyons review, which was commissioned recently by the official Opposition—I think I have a copy of it somewhere—the front page title is:
“Mobilising across the nation to build the homes our children need”.
I was given the review only yesterday so I have not had a chance to look at it all. I have heard it slagged off in newspapers, probably by people who have not read it all. I am sure it contains things I would agree with and things with which I would disagree, but it is an interesting and important contribution.
Emma Reynolds
Interestingly, the report contains a section on the subject of the hon. Gentleman’s Bill, which I will talk about in my remarks, and it has been widely welcomed by the sector and the industry.
Mr Bacon
I am glad the hon. Lady says that, and I look forward to reading it with interest.
I was talking to Shelter at a meeting and trying to distil my policy. I have not come to this as a housing expert, but I look at the world and think that if we had got things right there would not be a problem, there would be an equilibrium between supply and demand, and I would not have to stand here in the first place. I distilled my policy down to six words: everyone should have somewhere to live. That is it; that’s what I know. More than that I do not know, and the rest in some ways is details. We must ensure that everyone has somewhere to live, and at the moment they do not. I think we need every available shoulder pushing on that wheel. Of course, if a big rock is in front of the wheel we need to move it out of the way, but I am up for any idea that increases the total supply of housing, particularly if it is done to the highest possible standard.
One simply cannot tell which parts of Poundbury are affordable housing. When they are pointed out, people look at them and think, “Phwoar—I’d like to live there.” They have no particular special status; people are taken off the local housing list like everywhere else, and Poundbury has its share of social problems. However, the shape of community that has been created does something to lessen some of those problems.
A YouGov survey two years ago indicated that 75% of people do not want to buy the product of the volume house builders which, as I said earlier, I think are acting rationally inside a systemically flawed system. One of the main constraints on supply is that the standard house models of the volume house builders are attractive to only a small proportion of the total numbers of would-be buyers in the population. That makes it difficult to get above an average of 2.6 sales per month per site. Where there is a custom-build approach—or, as I might venture to call it, a customer-build approach—they can get two, three or four times that level of performance.
There is a wonderful development—it is not an experiment; it has happened—in the Netherlands in Almere on the opposite side of the IJsselmeer from Amsterdam. Many, many dwellings were allowed—it now has 3,000—and most are self-build and custom build. When the volume house builders around the edge were basically in stasis and nobody was buying their dwellings, there was a hive of activity in the middle of that development because the building of houses was being treated as if customers mattered.
A colleague recently retailed to me the story he had been told about a former Conservative MP who had been on the board of a major house building company. The former MP had said, “I have been on the board of this big PLC house builder for eight years. We have talked about land acquisition, finance, buying other businesses, the supply chain, cost control, staffing levels and skills. The only thing we haven’t talked about is houses.”
The truth of the matter is that we do not really have a housing market. If we did, there would be enough houses for everyone. What we have is a land market—which is very tightly controlled—and volume house builders which have access to the open capital market act rationally: they build when it is profitable to do so and take out an insurance policy to cover the down side. A farmer who is getting 3.5 tonnes of winter barley from a field is very happy if someone gives him £4,000 a year for the next 10 years for an option to apply for planning permission to build houses on it one day. That may never happen, but the only entity that can afford to do that is a large, well capitalised house builder. Small house builders cannot possibly do that.
It is even worth a large house builder’s while to employ someone—at considerable expense—to work out how to remove a joist that costs £76 from a roof. It is worth the investment of thousands of pounds and a considerable amount of time to figure that out, because for 1,000 houses on one site it will save £76,000. For someone who builds 9,000 or 10,000 houses a year, it will save £750,000. Over 10 years, that will amount to £7.5 million. What business would not want to save such a sum? But then along comes the purchaser, accompanied by the sales agent who, for some strange reason, often drives a pink Fiat. The sales agent is trying to sell that rather pretty little shoebox, containing furniture that is manufactured to deceive the eye. The width of a double bed in most show homes is about 3 feet 11 inches or 4 feet. Furniture for show homes is not furniture that could be used: it is specifically designed to make the rooms look bigger. The prospective buyers, perhaps a husband and wife with a baby, say, “We are thinking of having another baby. Can we extend into the roof?” But they cannot do that because the design, to save that £76, makes that impossible. The whole thing would fall down.
In a customer-driven environment, from the beginning the customer would say, “This is what I want now, and this is what I may want in the future”, and the market would respond. Some mathematician has worked out that if someone buys a Mini Cooper from the factory in Oxford, there are 126,000 different permutations to choose from.
Mr Spencer
My hon. Friend mentioned the Duchy of Cornwall. The Prince of Wales is on record several times talking about UK architecture and the occasional carbuncles that it produces. If the market allows individual designs, someone’s aspirational design is likely to be someone else’s carbuncle. How will the Bill address that differential in taste and aspiration?
Mr Bacon
The vast majority of our built environment that is worth protecting was built before the Town and Country Planning Act 1947, when there was much less control on what could be done. Also, when people are spending their own money on assets, they are likely to do so in such a way that protects the value of those assets. Aesthetics vary: every beautiful Georgian terrace we see—except those that were built on green fields—was built on land that previously held a beautiful row of black and white cottages from the 14th or 15th century that was knocked down to make way.
Imagine a world in which people could go along to a site and the sales agent with the pink Fiat said, “Here are some choices for you. You might want a big plot or a small one. Your tastes might tend in the direction of very traditional architecture or of something very funky. If the former, you might want to think about these architects and builders. If you want something more contemporary, you might want to consider these architects and builders who have a lot of experience in that sector. We have some examples of work they have done earlier and we can attest to their quality.” That could be the normal approach, but at the moment it is anything but.
Interestingly, the UK is an outlier in this area. In Canada, Germany, France, Sweden and Ireland, self or custom build often accounts for more than 50% of the market. In Italy, it accounts for more than 60% and in tiny Austria it is 86%. In this country, self-build is still seen as an elite club that is open only to a small number of people. As Kevin McCloud has said, we build some of the poorest performing, most expensive and smallest homes in Europe. If someone wants a home with triple-glazed windows so that it costs nothing to heat, we have no suppliers who can supply that. I do not know anyone who would not like a house that cost nothing to heat, but triple-glazed windows are not available here, although they are in Germany. They should be available here, too.
Jacob Rees-Mogg (North East Somerset) (Con)
I am hugely enjoying my hon. Friend’s speech. Is there, however, a greater problem with the planning system than he has outlined so far? Planners instruct builders on the precise colour of the bricks that they must use. With that level of ridiculous detail, people cannot let their imaginations run wild on bespoke houses because they will not meet the conditions laid down by the bureaucracy.
Mr Bacon
My hon. Friend makes an important point. As I said earlier, people go into planning with the most benign intentions, but they end up becoming the person who says no. They find that they do not like that and they leave. That means that those left in planning authorities can be the less imaginative and creative, who like exercising their little bit of power. I know someone in South Norfolk who built a house and he said that after his seventh attempt to get the gutter colour right, he told the planner to choose. But that person is employed by the taxpayer and should have better things to do. The people who work in local planning authorities are as much victims of the system as everyone else. Perhaps a quarter of them should not be there, but most of them would like to do a good job. They would like to have more ability to help their local communities properly in a true place-making way, as the hon. Member for Nottingham North describes.
The Government have done a lot in this area. The Budget provided £150 million for service plots, and the Government have announced a significant range of housing schemes in recent years—the local infrastructure fund, the Growing Places fund, the new homes bonus and Help to Buy, as well as the more recent starter homes money. The Minister can say more about those if he wants, but my point is not that nothing is happening. It is that it is not happening quickly enough. We need to make it happen quickly if we are to solve the housing needs of our people.
One crucial problem is that, because the supply has not been flowing properly, the cost of buying a house has risen considerably compared with the average income. It used to be three to four times income. In South Norfolk, it is now 8.2 times average income to buy the average dwelling, and it is the same in Harlow. In mid Suffolk, it is 8.6 times. These figures are from a “Home Truths” card for the east of England—the National Housing Federation has produced a card for each region of the country. In South Cambridgeshire, it is nine times average income, in St Albans 10.5 times, in Welwyn Hatfield 11.9 times and in Hertsmere it is 13.4 times. In a well functioning, flowing market that would not be the case.
In my view, the word “customer” should apply in the broadest possible sense. As I said, my policy is that everyone should have somewhere to live, but not everyone can afford to buy a house, and we need to recognise that. It follows that people without the money to buy a house should also be treated as customers. I want to see a world in which a person can say to a housing association, “I can’t afford to buy a house, but I am a human being and I don’t want to live in a ditch. I would like to have somewhere to live, and I understand that you provide housing for people like me”; and I want to see a world in which the housing association replies to such people or groups of people, “How can we help create something you want to live in and then rent it to you?” I know that can happen because it is happening now—tens of thousands of houses are being built this way across Germany and other parts of the continent—but not here. If we treat house building as if customers matter, we will go a long way towards solving the problem.
My humble Bill would require each local authority to keep a register of persons—individuals or associations of individuals—who are
“seeking to acquire serviced plots of land in the authority’s area in order to build houses for those individuals to occupy as homes.”
In the Bill, the word “house” includes a dwelling that forms part of a building, and “serviced plot of land” means
“a plot of land which satisfies such requirements about utilities and other matters as may be specified.”
For example, if a group of people got together to take over a derelict commercial building in an urban area, do it up and turn it into a series of dwellings, and if they got the co-operation of the local authority, that would fall within the scope of the Bill as a serviced plot.
Clause 1 identifies the relevant authorities that in each area would be responsible for observing the Bill: district councils, county councils in areas with no district councils, London borough councils, the Common Council of the City of London, the Council of the Isles of Scilly and other authorities, such as the Broads Authority, national parks and so on. The Government’s vanguard councils, with a bit of help and pump-priming money, are experimenting voluntarily with registers to see what is easiest and most cost-effective, and the last thing I want to do is place extra burdens on already overburdened councils.
Mr Spencer
My hon. Friend is making a powerful case and is slowly winning me round. However, if there was a plot on which 10 houses were to be built, a section 106 agreement, as well as infrastructure for sewerage and top water, would be needed. How would the 10 individual purchasers arrive at an understanding to pay the section 106 money, the sewerage connection fees and other ongoing costs?
Mr Bacon
It could be done in lots of ways. I am grateful to my hon. Friend because he draws my attention to something I should have mentioned earlier. The long title of the Bill states that one of the purposes of the Bill is
“to allow volume house builders to include self-build and custom-build projects as contributing towards their affordable housing obligations, when”—
and for the avoidance of doubt, I should have written “and only when”—
“in partnership for this purpose with a Registered Landlord”.
There is no reference to that in the text of the Bill, and there is a reason for that. I had planned to suggest to volume house builders that they could do this too, but on advice, owing to concerns from the affordable housing sector, the Department for Communities and Local Government and others—particularly in the other place, there are many experts who have forgotten more about section 106 agreements than my hon. Friend or I will ever know—it became apparent that I would have been treading into deep waters unnecessarily and that much of what might be needed could be done by guidance and regulations from the Department. For a technical reason, however, the words about volume house builders in the long title have had to remain: this was the Bill that was presented, so I have to keep the long title on Second Reading. If it gets into Committee, however, I will move an amendment deleting those words so that the Bill is silent on the question of section 106 agreements and volume house builders—there is no definition of volume house builders in law anyway. There was much justified concern that this approach might have been open to abuse, and it was certainly not my intention to allow that.
In defence of volume house builders, whom I do not blame for behaving rationally, there are some—in particular, Mark Clare, chief executive of Barratt Developments—who are across this agenda and thinking broadly and deeply about what they can do to help. For example, Barratt is providing plots for local small builders alongside its big developments to encourage diversity and choice. I commend that approach tremendously. Barratt is a high-quality operation, and as it does that, more will follow. In their negotiations with big developers, local authorities could start discussing how volume house builders might incorporate that into their big developments, but I would rather it be done on a case-by-case basis—local authority by local authority—rather than have us tell them from above what has to happen. That is not likely to work.
Clause 1 deals with the establishment, maintenance and promotion of the register, and clause 2 deals with the duty as regards the register. It states that local authorities, having established the register, must have regard to it in bringing forward their housing plans. The meaning of “have regard to” will vary enormously. What is appropriate for the London boroughs of Hammersmith or Newham, depending on conditions and the amount of land available, will be very different from what is appropriate for a national park, which is also a local authority, for a suburban area, a rural area such as South Norfolk or a market town. So I have not tried to define exactly what it would mean. Instead, the Bill provides that the Secretary of State could issue guidance and make regulations about what it means.
Just yesterday, the Government published their “Right to Build: supporting custom and self build” consultation document. It is a thorough document and I commend it to hon. Members. It is an index of how serious they are about talking to local authorities about what will work locally and how to make this the new normal without its becoming a bureaucratic and burdensome exercise.
I do not pretend that the Bill will change everything overnight. We have a serious issue with our housing need that has not been solved for a generation, and we are not going to solve it overnight. However, I contend that if we open up choice and empower the customer—I mean “customer” in the broadest sense, including those in the market for affordable rental properties—we will start to make a significant difference. We need every available arrow in our quiver if we are to start to solve this problem, which has been going on for far too long. If we can unleash the energy of our own people, we can make a tremendous difference. As Rod Hackney, the architect who used to advise the Prince of Wales, said, it is a dangerous thing to underestimate human potential and the energy that can be generated when people are given the opportunity to help themselves. I believe that my Bill would contribute towards helping people to help themselves, and I commend it to the House.
Mr Graham Allen (Nottingham North) (Lab)
Madam Deputy Speaker, you and I represent constituencies with an equivalent demography and similar levels of deprivation and dysfunction. My constituency could be characterised as seven enormous former council estate. It might seem odd, therefore, for me to begin by praising the Bill put forward by my hon. Friend—if I may call him that—the hon. Member for South Norfolk (Mr Bacon) and mentioning Kevin McCloud and his programme “Grand Designs”. I do that because he has popularised the concept of self-build and because it happens to be my favourite television programme. When Kevin McCloud came to the House of Commons to speak to the self-build group, I remember him being deeply unimpressed when I showed him that my phone ring-tone was the “Grand Designs” theme tune. More seriously, however, he has put the concept of individual self-build very much into people’s minds, so we owe him and the show a continuing debt because it opens up a line of thinking.
The line of thinking for me is not building a £1 million house in beautiful green belt, but, to connect back to my opening sentence, that self-build, custom build or community build could be one of the answers for areas such as my constituency and that represented by Madam Deputy Speaker—places that linger at the bottom of the league table on so many statistical indices, whether it be, as in my case, sending the fewest number of young people to university, or having double the number of single households or double the national average of the number of children entitled to free school meals. I am trying to juxtapose these two extremes, and I think we can do this, which is why I would like to pay tribute to my hon. Friend the Member for South Norfolk, the chair of the self-build, custom-build and many other builds in the title of the group. If we are extending the title further, I would like to add, in brackets, community build, because that is where we can bridge into the less affluent areas where the need for housing is just as important. By dint of personal energy and effort, my hon. Friend has raised this issue virtually single-handedly in the House, bringing us to a position whereby I understand that both the Front-Bench teams will support his Bill—quite an achievement, albeit only one of many in his illustrious parliamentary career.
Mr Spencer
As his constituency neighbour, I am well aware of the challenges the hon. Gentleman faces in his constituency. He referred to Mr McCloud and the “Grand Designs” programme, but it strikes me that almost all those type of programmes conclude with the projects going over-budget and over-time—a demonstration of the enormous challenges of building one’s own property. Is there enough support out there from the National Custom & Self Build Association to assist people who are not of great wealth to overcome the challenges they might face in the self-build process?
Mr Allen
I am tempted, in Kevin McCloud fashion, to say, “Will I actually get to the end of this speech, and will it be done by Christmas? Let’s come back after the break and see.” More seriously, my honourable neighbour makes an important point, which I shall try to cover on the basis of what little I know about this field. It is indeed important not to look at individuals of high net worth to do the self-build, which would simply not be possible in my constituency. Rather, we should look to local partnerships, particularly including local councils. I have alluded to the experience of Berlin, to which I shall return, but in my own area, the superb Nottingham City Homes is the arm’s length management organisation for the former council housing stock. It is very well led, with imagination and creativity in abundance. If we can tie such organisations to people in the private sector who are prepared to help, I think it will be possible to bridge from those high-end individual self-builds into something that could have a real impact on my constituents.
I say that for another reason, too—not necessarily for the obvious housing reason. This could be a demonstration and a symbol of the fact that people in areas decimated by the decline of manufacturing who have been pulverised by the loss of employment in their communities—and, in many cases, the loss of self-respect, as well—are capable of getting up, organising and achieving something like this. That could have a really cathartic effect on those estates with which I know the hon. Gentleman is so familiar.
I pay tribute to Ted Stevens, whose name has been mentioned. Ted was not simply the chair of the National Self Build Association. One cannot come into contact with Ted without being electrocuted by the passion and desire he brings to this field. He is an inspirational character, and we were fortunate that he chose to come to Nottingham recently to convene a meeting with a number of colleagues who are interested in this field. One cannot pay for that sort of passion or buy that sort of interest and desire to spread the word. If, with the hon. Member for South Norfolk and Ted Stevens—he is no longer the chair of the association, but he is not the sort of character who is going to leave the field—we can bottle that passion, there is a real chance of doing something very significant in this field.
Let me say a little more about the specifics in relation to my own constituency, which I know the Bill’s promoter is concerned about, too. If we are to make an impact on the market, we are going to have to look at how this will impact on the former council estates, on working-class and low-income housing, which is where much of the expansion could come from. I made a point earlier about having more devolution so that local government can make some decisions rather than be the passive recipient of policies coming down the pipe from Whitehall. In my constituency, we need to enable the local authority to get on and do the job it sees fit. Peculiarly, there is too much housing in my constituency.
The project I am fortunate enough to chair in my constituency is called the rebalancing project. It is called that because we are trying to balance the fact that 95% of the constituency is covered by former council estates, with very little provided in the way of employment, training, leisure—all the things that go to make an effective community. To balance that, we have to confront the reality of being issued with housing targets that are wholly inappropriate for a constituency such as mine, and the drive in local government, when battling austerity, to sell land assets, often to people who could put a semi on a corner or a Barratt estate on a zone designated for business and enterprise, losing that land for ever. Those pressures must be considered .
We need a much more flexible system—one that is looked at locally rather than one in which all we are doing is looking to tick the boxes sent to us by the centre. If we can have that degree of flexibility, there will be room and possibilities for self-build, custom build and community build—breaking, in my case, this unleavened sea of former council housing. I put on record that this is actually very good stock—brick-built houses from the new garden city movement era, with gardens front and back and pitched roofs, with no deck access and no high rise, but which, none the less, in modern circumstances, without the employers who were around at that time, creates a large, single problem, verging on a ghetto, which we need to break down in order to create communities and neighbourhoods on a more human scale, based on a balance of employment, skills and training.
I was inveigled by the hon. Gentleman to go to Berlin to have a look at some of the self-build or community build there. It was one of the best bits of inveigling I have ever experienced. This was not “Grand Designs” as a concept. Some of the buildings we saw were converted. There was a beautiful former school which had been made into a wonderful set of apartments for a broad-based mix of people, with plenty of facilities on site. The other buildings that we saw were flats, sets of housing rather than individual housing. That visit opened my eyes to the fact that it was not necessary to do a one-off in a green field. I realised that this was relevant in an urban context and relevant to more than just an individual, and that it could start to involve a more collective approach that could be the answer in areas such as mine.
Mr Bacon
The hon. Gentleman mentioned our visit to the school in Karlshorst, in east Berlin. That meant a great deal to me, not least because in a different incarnation, probably more than 20 years ago, I worked in Karlshorst as a teacher. I used to pass Russian generals walking their dogs every morning, just after the Berlin wall had come down. The most interesting thing about the Karlshorst school was the existence of a supervised community consisting of eight or 10 families and 10 children, many of whom were orphans or had been removed from their parents. The children had adult role models to whom they could relate—apart from their own step-parents—who created for them a new, normal environment that they could not possibly have experienced anywhere else.
Mr Allen
When I was in Berlin, I had the impression that the concept of group build was déclassé. In the United Kingdom, the aristocrats have the big houses, the middle classes have their hideaways in Islington—or its equivalent in my city, and no doubt in other cities—and everyone else seems to have acquired the “better builder” kit from one of the volume builders. And then there is social housing.
In the United Kingdom, there is a very rigid view, almost a “caste system” view, of what housing should be. That was totally absent in Berlin. There was fluidity. It was not a case of “We have a quota,” or “We are helping some people out,” or “We are getting a bit of a deal, some money, and because we are being allowed to build something else, we will build a bit of social housing.” That is rather what the old council estates used to be like, certainly when I was growing up in my constituency. There was no thought that such housing was strictly limited to a specific group. Now, however, we have almost come to accept that that is the way that it has to be in the United Kingdom. I think that self-build, or collective build, or community build, is one of the ways in which we can return to a more open market in housing, in which everyone can have a stake.
As I have said, Berlin was quite an eye-opener for me. I discovered that 15% of all new homes there were provided by means of the group build method. That is a big chunk of the market, and—the hon. Gentleman will correct me if I am wrong about this—I believe that the percentage is increasing, and has been increasing steadily since just after the war.
A key factor has been local government’s ability to play its part. We were told repeatedly that the precedent could not have been set if the spark had not been lit by the Berlin council and its sub-divisions, which saw group-build as a way of enabling people to run their own affairs and to make housing that they felt was appropriate, rather than housing that some other person felt was appropriate for them. They were allowed to express themselves, by which I mean not wild and wacky architectural design, but enabling people to make whatever interiors they like once the shell had been constructed. As the hon. Gentleman will recall, we went in and out of houses which were identical at first sight, but whose internal design had resulted from a tremendous amount of imagination. The customising of group-build was one of the features that I took away from that visit.
Bob Stewart (Beckenham) (Con)
I am sorry that I was not present for the beginning of the debate. I know from my time in Germany that there is not much of a tradition of owner-occupation there. Many people hire or rent their properties. Is the system that the hon. Gentleman is describing a way of helping young Germans, or Germans without much money, to enter the property market, because the cost of owning property in Germany is so much higher than it is here? That is a question, not a statement: is owning property more expensive there?
Mr Bacon
I did indeed want to intervene. The hon. Gentleman will recall that we visited the houses known as “Elf Freunde”, or “11 Friends”, which is a German footballing pun. Indeed, I think that those are the houses to which he referred earlier; the ones with the tremendous variation inside. Although much of the housing that we saw in Germany had been provided by Genossenschaften, housing co-operatives, that particular project was for private sale. Four of the 11 people involved were architects who, because of rising costs in Germany, were anxious to do what many people in this country have thought about doing for years—to buy somewhere so that they would have somewhere later, rather than seeing their rent dissipate. We saw four-storey houses with huge square footage that had been built for a total cost of just over £200,000, including land and construction.
Mr Allen
I found that intervention very helpful, and I hope that the hon. Member for Beckenham (Bob Stewart) did as well.
What I envisage for my area is not the standard group building that we saw in Berlin, much of which was architect-driven or initiated by professional people. I have been encouraged by my conversations with my hon. Friend the Member for Wolverhampton North East (Emma Reynolds) and with the Minister, whom I met coincidentally earlier in the week in order to discuss another matter. They seemed to be open to the idea that there is not a one-size-fits-all answer in this instance, and that self-build can contribute to the opening up of the housing market. In Nottingham North, however, we would not start off with the professional skills that would be necessary to create something along the lines of what we saw in Berlin, but we could bring those skills to the table. We could ask the private sector to bring them to the table. We could ask individual architects and other professionals to help, we could ask local government to facilitate the project, and we could ask our wonderful Nottingham City Homes whether it might consider sponsoring it.
Nottingham is probably the last place where most people would ever think of trying to start something like this, but let us, as it were, start with the last place. As I hope to show later in my speech, if we can do it in Nottingham North, there is absolutely no reason why it cannot be facilitated by all parties—and this is a cross-party debate. There is no reason why Governments of all colours, and parties of all colours, cannot do something similar to what was done by the Germans after the last war. We could see 15%, 20%, 25% of homes in the United Kingdom being self-built, custom built, or community built. Some people might say that the demand does not exist, but I think that the hon. Member for South Norfolk has well and truly shot that one out of the water.
Let me now add my two penn’orth and return to the survey conducted by the National Custom & Self Build Association, which the hon. Gentleman mentioned earlier, and which I think was carried out jointly with Ipsos MORI. According to the survey, an estimated 7 million people want to adopt the self-build, communal-build route. Well, we could all say that we might like to have a go at it, but there is a further statistic: it seems that 1 million of those 7 million want to start this year. I cannot believe that they will all do so, but if there is a real desire among them, if they have a time limit in mind, if they are saying “I really want to do this”, I would love to be standing here this time next year with the foundations dug in, and Kevin saying, “Will the money run out?” I am sorry; I should be more serious about this. If 1 million people are saying that they want to get started, that is a fantastic asset for the Government and all parties. I think that if we could achieve it at the cost of just one or two little improvements, flexibilities and discretions, building on the Bill, that would be a great step forward.
I want to finish with a little vignette about the rebalancing project in Nottingham North. We are pulling together a charity which is setting up to do a large number of things coterminous with my constituency, not least around the pre-NEETs group—14-to-17s—and also a number of key public health issues, but one of our workstreams is most definitely around housing, self-build and tenure. We were able to bring Ted Stevens to my constituency just a couple of Fridays ago and he got a fantastic group of people in the same room to brainstorm around the topic of self-build. They included the chief executive of Nottingham City Homes, Nick Murphy, private sector people such as Jon Sawyer from Igloo, which I understand has won the build-it award for custom build this week—we were not aware it was even in for that competition, but congratulations to it—and people from the One Public Estate organisation, which I think resides in the Cabinet Office, or perhaps the Department for Communities and Local Government; forgive me if I am wrong, the Minister will.
What they are trying to do is bring land assets which are not being used fully into proper use. That includes central Government assets—I had better not name any as I am keen to have the possibility of exploiting them—and the aim is to match those with council land and property assets in the ownership of local government. That is a precious and small group of assets. We are not in the position of the hon. Member for South Norfolk of having a fairly large number of sites to look at. They are very precious and we must safeguard them to ensure they are used and maximised as much as possible.
We started to get those holders of land assets to consider self-build as an option, and that is an enormous step forward. Hon. Members in slightly better circumstances may not even understand what I am saying there, but when land is so precious and virtually all of it is built on, those small sites can be very important. Land is the key social control in an area like mine and catalysing that frees up the potential for self-build and community build.
One of the key things Ted Stevens, Jon Sawyer and others put to us the other week was that separating the land acquisition from the build process reduces the risks for house buyers buying upfront. So in a sense what we look at then in terms of self-build is that we have housing manufacturers rather than people who need to do the whole lot of the pathway from an empty piece of land to occupied land full of happy families. Separating the land acquisition is one of the key factors and will be even more important in the British context than it is in the Dutch or the German context.
There are a lot of examples of this happening already. I do not know if it is in your constituency, Madam Deputy Speaker, but there is a development called the Yard in Bristol, and that was pointed up as a lower income area that could benefit. Perhaps the hon. Gentleman knows of it? We would be looking to do something like that—building something in Nottingham similar to what they are doing in the Yard in Bristol.
Added to the people I have mentioned, we had people from urban design, not least from Nottingham Trent university, but also people who had attended the annual urban design conference in Nottingham some five or six weeks ago. I think marrying self-build, community build and group build with the idea of re-engineering—redesigning—the urban landscape in a place such as Nottingham North presents tremendous possibilities.
In order to be inventive, innovative and creative, I wish the hon. Gentleman’s Bill swift passage. What he has managed to do in getting the Bill to this stage of its progress through the Commons is superb. If he wishes, I will allow my name to go forward for the Bill Committee. There is so much to disagree about in housing, and I hope that the dogfight continues, but I also hope that on this issue my hon. Friend the Member for Wolverhampton North East (Emma Reynolds) on the Opposition Front Bench and the Minister, who I have had so many positive dealings with, and all of us can say that if we can give self-build, communal build and group build a fair wind, we will be doing something that will bring immense joy and happiness to many families, not least those in my constituency.
Emma Reynolds (Wolverhampton North East) (Lab)
I warmly congratulate the hon. Member for South Norfolk (Mr Bacon) on both an excellent bit of luck and an excellent choice: excellent luck in coming fourth in the private Member’s Bill ballot—not many of us can say we have come fourth in it—and excellent choice of the specific Bill he has brought forward. I went to his all-party group on self-build, custom-build and independent house building meetings earlier in the year and I know he has become a champion for self-build and custom build in Parliament, and I commend him for his work in this area.
I commend Ted Stevens, who has already been mentioned by a number of hon. Members, the former chair of the National Custom & Self Build Association. I thank him and the association for contributing to the Lyons housing review, which the hon. Gentleman mentioned.
I also want to thank Igloo Regeneration, which has also been mentioned, not least by my hon. Friend the Member for Nottingham North (Mr Allen), for its submission to the Lyons review. I will say something later about the work that has been done in this area.
On a personal note, I want to put on record the fact that I have lived in a self-build house. In fact, the first house I lived in was a self-build house, because my father is an architectural consultant, and he built his first self-build house in the 1970s and then built another one in the 1980s in which he still lives, so I do have some personal experience. However, I would suggest that most of us mere mortals who do not have the experience my father has in architecture or the trades tend to be more attracted to custom build because it is somewhat easier. It gives people the choice and control over the design, but it takes away a lot of the risk, uncertainty and challenge for those who do not have significant experience in the house building sector or market.
First, I want to say something more general about the opening remarks of the hon. Member for South Norfolk. Labour Members support his Bill and agree with his overall and—let us face it—simple objective that everybody should have somewhere to live. I think that would be difficult to argue with, and I agree with him wholeheartedly. I also agree with his analysis that for quite some time the market in this country has not been delivering anywhere near the number of homes we need.
Usually the Minister and I would trade insults and figures and so forth across the Dispatch Box, but I will attempt not to do that today. This is a long-standing problem. The problem of under-supply of new homes goes back some three decades or more, and I agree with both my hon. Friend the Member for Nottingham North and the hon. Member for South Norfolk that there are some pretty deep structural and, as the hon. Gentleman said, systemic problems with the housing market.
One of the big problems, which both Members highlighted, is the problem with the land market. That structural problem affects the potential of self-build and custom build. I will focus on that later in my remarks, but I want to put that right up front as one of the key, fundamental issues we need to deal with.
We support the creation of the register by local authorities and a requirement for them to identify demand for self-build and custom build. I called for that in my first major speech as shadow housing Minister in January. The Government have been talking about it for some time and I welcome the support I believe they will give the Bill. As the hon. Gentleman suggested, evidence presented by the National Custom & Self Build Association and others shows significant unmet demand, so we also agree when the Bill sets out that local authorities should have regard to the register that they will have to put in place when carrying out their planning functions and producing their housing plans.
Let me deal briefly with the specific reasons why the Opposition support the Bill and why I support it. The first is that, as the hon. Gentleman discussed, it will give a voice to those shut out of home ownership. This is not exclusively about them, as there will be owner-occupier families who want a bigger home or even a smaller, more bespoke home. However, some first-time buyers are priced out at the moment. He talked about the ratio between the average salary and the average house price, which is scarily high in some areas of the country, not least London. The generation who are between the ages of 20 and 34 are the most deeply affected by our failure to deliver a market that delivers enough homes. We know that one in four of that age cohort are living at home with their parents.
In the last 12 months that I have been doing this job, I have met so many parents who crave an empty nest. I am sure they do not mean it—[Interruption.] Oh, there are some in the Chamber. Extraordinarily, 3.3 million people in that cohort are still living with their parents. As a country—I say this of successive Governments —we must be doing something wrong, and the system is not working. This register would be one approach to and recognition of that failure and unmet demand. I am also keen on the register because planning applications, which are between the council, as they should be, and groups of people, some of whom are in favour and some of whom are against, often do not include that younger generation, so the register could be one way of seeking to give them a voice in this process that they do not currently have.
Secondly, as the hon. Gentleman set out in his excellent speech, by promoting self-build and custom build we can, in turn, promote more customer choice and a drive for better quality. We often focus on the numbers in our debates, talking about a Government not producing a certain number, describing what our party would do and saying that we would like to double house building from the current level. However, any such increase cannot be at the expense of quality. The interesting thing about this part of the market is that it is so focused on quality. As he set out, if the customer is put at the heart of the process, we inevitably drive up quality. On energy-efficient homes, someone who is in the driving seat and who will be subject to the energy bills has much more motivation to try to commission—if it is a custom build—or build a house that will give them the lowest possible energy bills in the future. The volume house builders perhaps do not have that same motivation, because they will simply sell on and move on. Where the customer is driving that process, they will be the one living in the home for some time, so I am totally with him on this point, and how we drive up quality is important to the wider industry, too.
Thirdly, as the hon. Gentleman mentioned, it is important that we promote self-build and custom build to a much wider range of people. Recent research carried out by the university of York found that a variety of households could benefit from self-build and custom build but the current market is dominated by an older, asset-rich demographic, although not exclusively so. The hon. Member for Sherwood (Mr Spencer), who is no longer in his place, intervened on my hon. Friend the Member for Nottingham North to suggest that although Kevin McCloud’s programme is a fantastic contribution to this debate, its projects often run over budget and over time. We need to de-risk the process, and so although I welcome the initiatives in the Bill we can do more on that. I know that the Government have done some interesting things on trying to make sure that mortgage provision is available in this area, as that remains a major barrier.
Emma Reynolds
I could not agree more with that. It was interesting to meet Kevin McCloud at the all-party group meeting that the hon. Gentleman organised earlier in the year. I am sure that Kevin McCloud’s vision is for a much more inclusive and comprehensive sector catering for people of different backgrounds and incomes, but his programme can sometimes focus on those who are having difficulty. Perhaps that is because it makes for more interesting television, as the hon. Gentleman has implied.
My hon. Friend the Member for Nottingham North made an interesting point about community build and his experience on the visit that the hon. Gentleman organised to Berlin, where a much more collective approach to these projects is taken. Our country has some real trailblazers, but they are few and far between. We have some interesting initiatives, but they are not going on at scale in the way we see in Germany and other countries.
Mr Allen
I think you were otherwise engaged when I mentioned the Yard in Bristol, Madam Deputy Speaker. I do not know whether it is in your constituency or nearby, but it is a classic example of a community starting a development together. I wish the House had facilities to enable the hon. Member for South Norfolk (Mr Bacon) to make a presentation of the sort we have seen, showing example after example of different groups and types of people, some with and some without a connection, some where people have responded to an advertisement, all coming together. Delighted as we are that Kevin McCloud has raised the public profile of self-build, that approach is the antidote to it, as it is about collective provision rather than just individual provision.
Madam Deputy Speaker (Dame Dawn Primarolo)
Order. I did hear the reference that the hon. Gentleman made—he would be surprised to know that I can do more than one thing at a time—but it is not normal for the Deputy Speakers to intervene. While I am on my feet, may I say that the provision has historically been done on a community basis, not only in Bristol, but in lots of places? Minister.
Emma Reynolds
Thank you, Madam Deputy Speaker. You have just promoted me, and I am very grateful for that. The point I was making was not that this is not going on, because we know it is happening in Bristol, Cornwall and other parts of the country. My point is that in Germany and other European countries it is going on at scale, not only in self-build—so on an individual basis—but in collective build. I am referring to the group build discussed by the hon. Member for South Norfolk and my hon. Friend the Member for Nottingham North.
I also wish to say something about social housing, because some impressive Labour councils—I am trying not to be party political—have undertaken interesting initiatives using custom build. That is not happening in all parts of the country and it is not happening at scale, but we can learn and draw inspiration from it. In fact, in a new scheme in Lewisham, the local Labour council is running a custom-build scheme that allows residents—my hon. Friend the Member for Lewisham East (Heidi Alexander) knows about this—to choose the design, select the contractors and specify individual requirements. We should not limit this just to private sales: it is just as important to involve social housing residents in design and place shaping, as the hon. Member for South Norfolk said. That is an innovative way to go about new build.
Finally on the Bill’s specifics, I welcome the hon. Gentleman’s intention to delete the last part of the long title, which states:
“to allow volume house builders to include self-build and custom-build projects as contributing towards their affordable housing obligations, when in partnership for this purpose with a Registered Social Landlord; and for connected purposes.”
I understand that his intentions were good, but I agree with his analysis that, if we are not careful, that provision could be misused. We would very much like to protect section 106 arrangements and ensure that developers play their role in delivering affordable housing. I appreciate that he has not been allowed to delete that provision for some strange, technical drafting reason.
The Lyons housing review rightly identifies the problem of the availability and affordability of land as one of the main barriers to self and custom build. In fact, according to the National Custom & Self Build Association, 48% of would-be self and custom builders have a budget of £200,000 or less, which is simply not enough to cover both the construction costs and the land costs. As my hon. Friend the Member for Nottingham North said, land is one of the key problems. Sir Michael Lyons specifically calls for land to be included in plans for self and custom build in a way that allows the kind of broad outline permissions that we see in the Netherlands and Germany to be granted. That is an interesting way to simplify the planning procedure for self and custom build, and it should be considered.
Sir Michael Lyons talks about the need to make land more affordable—the Government have spoken about this—and public land should be a priority. We should think about how public land could be invested as equity. In fact, the review makes recommendations about how we could use public land more innovatively for self and custom build and for other types of housing, too.
All too often, public sector land becomes a victim of the same process as private sector land, where the state—whether a local authority or a Department—sits on the land and waits to sell it off to the highest bidder, so that land is not built on because the process takes time. Sir Michael Lyons suggests in the review that the state take a more innovative view, perhaps by keeping a stake in that land or allowing deferred payments. That could unlock the potential for self and custom build and for other types of house building, too.
More widely, Sir Michael Lyons emphasises giving local authorities more power to be proactive in going about their planning and housing duties, rather than being reactive. In particular, the innovations of housing growth areas and new homes corporations proposed by the review will provide new opportunities for local authorities to assemble plots of land and, crucially, allocate some of that land for self and custom build.
Crucial to trying to drive this sector is the role of the small builder. The hon. Member for South Norfolk said that Mark Clare is on the expert panel of the Lyons commission. As important as Barratt and other volume house builders are, small builders are essential if we are to deliver a step change in the self and custom build ambitions that we all agree need to be furthered. Often, the smaller builders are doing the work and building these new homes.
Sir Michael Lyons and the Labour party more generally have been keen to seek ways to promote greater competition in the market, particularly by helping small builders to access finance. We have set out a help to build scheme, which would underwrite loans for small builders. Only yesterday, we had a meeting of five of the big banks with a number of small builders, facilitated by the Federation of Master Builders, and we were encouraged by the debate that went on between those two stakeholders. Again, if we could ensure that the banks were lending to small builders in a more significant way, it would help us to increase self and custom build in different parts of the country.
In January, in my first major housing speech, I talked about this subject and the need for small and custom builders to have access to land. I said—I still think that this is the case—that local and national Government ignore small sites too often and place much more emphasis on larger sites. Local authorities should include a higher proportion of small sites in their five-year land supply. Often, small sites are brought to market much more quickly. They are often simpler to develop and the projects are easier to get going.
I also said in my speech in January that more public land should be allocated to smaller firms and custom builders. In addition, we have committed to ensuring that a proportion of the homes built in new towns and garden cities will be built by smaller firms and self and custom builders. So there are lots of things that we can do in the land market.
The other aspect of the land market that we are poorly served by is the lack of transparency. We have committed to increasing transparency in the land market by ensuring that developers register the land that they own or have options on. Again, that will help people to identify plots of land for self and custom build.
Mr Bacon
The hon. Lady is making an interesting speech and has touched in almost the same breath on two exceptionally important subjects: land and finance. Does she agree that there is no shortage of land; there is a shortage of accessible land? There is plenty of “permissioned” land out there. Does she also agree that there is no shortage of finance; there is a shortage of financeable propositions? If the proof of concept in the experiment that Igloo is doing with institutional investment from Aviva works—by the way, a very good Norfolk investment institution, although I prefer the name Norwich Union—it will show that this can be done all over the country at scale.
Emma Reynolds
First, on land, I agree with the hon. Gentleman that, as he said in his opening speech, there is no absolute scarcity of land because we have not built on much of the land in our country. I agree that we have enough land to build more homes to meet housing need and to preserve our wonderful and beautiful countryside. We are dealing with an artificial scarcity of land, for all sorts of complex reasons that are not just to do with planning. We have said that if we win the next election we will keep the national planning policy framework, but this is not just to do with planning; it is also to do with speculation and the extended negotiations between landowners, developers and local authorities. Often, local authorities and local communities are unable to benefit to the degree that we would like from the uplift in value of that land. Capturing that value was one of the great innovations of new towns, and we would like to replicate it.
Developing infrastructure up front makes it much easier to gain public consent. People oppose development because they are concerned that their local schools and GP surgeries might become over-subscribed and their roads might become congested. If we can find a way, along the lines of what happened with the new towns—this is why we are proposing new homes corporations—of capturing that uplift in the value to put back into communities, we think that we can unlock sites more quickly, and for the benefit of those communities, and start to see an easing in the process of getting consent in the first place.
I also think that driving up the quality of new development more generally will help with seeking consent. Shelter, which has done a lot of polling on this, has told us that people often object to development because they are worried not necessarily about their house prices falling but that their community and area might be undermined and not look as nice. They are worried about the aesthetics of the communities and areas they live in. I think that driving up quality through self-build and custom build, and indeed more generally, could really help in the wider debate on how we seek consent for new development and, frankly, give it a better reputation.
The hon. Member for South Norfolk is absolutely right that we need to draw inspiration from our European neighbours, whether Germany, France or Austria. As he pointed out, Austria is top of the league when it comes to the percentage of new build. In the UK, self-build and custom build make up about 1% of new build housing, whereas in Austria the figure is over 80%, and in France and Germany it is in excess of 40%, so they are clearly doing something right. I agree with him that we cannot simply transpose their model, because obviously it is very different from ours. However, it is interesting to hear about the sorts of initiatives that he and my hon. Friend the Member for Nottingham North have visited and think about what we can learn and draw inspiration from.
In this great spirit of cross-party agreement, I will conclude by saying that we welcome some of the initiatives that the Government have introduced to assist self-build and the provisions of this Bill. We think that the artificial scarcity of land and the way it is brought to market, and indeed the land market more generally, are part of a much more fundamental problem that we will need to grapple with if we are to boost this part of the house building sector, and the other parts too. I will not get into that wider debate today, but it might be the area we do not always agree on. However, on the self-build and custom build sector, I welcome the Bill and the provision that local authorities should have a register. I also welcome the hon. Gentleman’s commitment to ensure that the sector drives up quality and that we have more innovation and creativity in the house building industry.
The Minister of State, Department for Communities and Local Government (Brandon Lewis)
It is a great pleasure to say that the Government strongly support the Bill, as I think the House is well aware from the comments that have been made. I welcome the commitment of my hon. Friend the Member for South Norfolk (Mr Bacon), a fellow Norfolk MP, who has championed the cause of self-builders and custom builders as chair of the all-party group on self-build, custom-build and independent housebuilding—I understand that its name is shortly to change again. I am happy to endorse this innovative piece of legislation.
This debate is a really good example of what this House does fantastically well and of the importance of private Members’ Bills. My hon. Friend has taken up this matter of his own accord, worked it through and come up with a Bill that enjoys cross-party support and will be an important step for our country. Thousands of people across the country are taking on this type of building project, and we want to see that grow much more. In years to come we may well be able to look back and see that that growth in the market started here in the work we are doing this morning on this private Member’s Bill.
I will take this opportunity to explain to the House why the Government are so strongly supportive of custom builders and how the Bill will help to take forward our proposals for a new right to build, which we are currently consulting on. The Government are committed to increasing housing supply and helping more people achieve their aspiration of a home of their own. When we came into office, house building in England had fallen to levels not seen since the 1920s and many sites across the country were stalled. We have spent the past four and half years fixing that, and we can see our policies working.
However, we must also accept that for many years this country has not built enough houses and that our population is growing. We can see that when we think about our own families. My parents had three children and we lived in one home. All of my siblings now have a home of their own and we all have, or are about to have, two children. That means that within two generations one family will have gone from needing one house to needing 10 or more, depending on how many children my siblings end up having—my wife has made it very clear that two children, wonderful though they are, is quite enough. We are seeing our population and the need for housing grow.
We are rebuilding demand through Help to Buy so that hard-working people with sufficient earnings can get on and fulfil their aspiration to own their own home. We are boosting supply through planning reforms, as the hon. Member for Wolverhampton North East (Emma Reynolds) outlined, with the national planning policy framework widely recognised as a fantastic step forward. We are investing through our get Britain building campaign, large sites and builders finance funds, which make sites viable for builders so that they can build out their sites and do what they do best—build the homes we need. That action is delivering more new homes. Nearly 480,000 homes have been built since 2010, including over 200,000 affordable homes. New housing construction orders and the registration of new homes across country are at their highest level since 2007.
However, we know that we cannot just rely on a delivery model that is dominated by volume house builders. Much of the housing built during the last boom was in the wrong place and was of the wrong size, which did not meet homebuyers’ aspirations. That is why, looking forward, we want to see greater diversity in the housing market, with more competition, more small and medium-sized home builders, more new entrants and more new development, to increase the speed and quality of the housing we build in this country.
We want to see small builders grow further. The hon. Lady outlined the importance of small builders building on small plots. The Bill can directly provide a huge boost to the small building industry, because it will appeal to those kinds of builders to pick up the contracts from home owners, and potential home owners, who want to be part of the custom and self-build market. We have also introduced the builders finance fund for small builders. I was pleased to see Lloyds announce this week its plans, following our meeting last week, for a £50 million fund aimed directly at small builders.
The Government strongly believe that custom and self-build housing can play a crucial role as part of a wider package of measures in securing greater diversity and helping to deliver the homes people actually want. The hon. Lady and the hon. Member for Nottingham North (Mr Allen) mentioned television programmes such as Kevin McCloud’s “Grand Designs”, which bring a new profile to custom build. The intention of this Bill, and the fantastic work my hon. Friend the Member for South Norfolk is doing, is to make people more aware of that opportunity and make it more available to them, turning it into a wider market. More people will start to appreciate that they can build their own home at an affordable price, and often more affordably than buying directly from a developer.
It is right to put on record the important distinction between custom build and self-build within the sector. The definition of “self-build” covers someone who directly organises the design and construction of their new home, while “custom build” covers someone who commissions a specialist developer to help to deliver their own home. What matters for the purposes of this Bill and our proposals on a new right to build is that we develop a framework that promotes both.
Mr Allen
That is a really important distinction if we are to retain credibility and trust as this Bill moves forward. It is not good enough for the big-volume builders just to offer to put a few extra knobs on and call that custom building. The custom building that I am referring to—as is, I suspect, the hon. Member for South Norfolk (Mr Bacon)—occurs where there is a sense of creating something. It might not be entirely original; there may be elements that can be drawn down and fitted in. I think that is the concept—I am sure he will correct me if I am wrong—that we are all proposing in trying to move self-build and custom build forward.
Brandon Lewis
The hon. Gentleman makes a good point. Having explained the differences between the two, for the purposes of this debate I will use the terms “custom build” and “self-build” interchangeably—but I want to make it clear that there is a difference between them. He is absolutely right. With regard to volume house building, including on large sites, we would like eventually to see opportunities within that put aside for these projects. I will touch on that later, particularly as regards garden cities and the garden city principles we are using in areas such as Ebbsfleet.
It is realistically possible that, with the use of modern technology and the way in which modern building techniques are now moving, we will not be that far away from house builders, even in large-volume house building, adapting parts of their site, at least, to a point where a member of the public who wants to buy their own home can walk on to it and instead of doing what they tend to do now and saying, “What plots are available and which house are you building on that plot,” and, “Thank you, that’s the one I would like to buy,” being able to say, “I want that plot with this style of house, and I want to do this or that with it,” so that they can then have that house built for them by the builder more quickly, we hope, than the 20-plus weeks that it takes at the moment.
Bob Stewart
Does self-build also apply to someone who takes a wrecked old barn, say, and decides to make it into a home? If it was not anything much before—a sheep pen or something—but then becomes a home, is that defined as “self-build”?
Brandon Lewis
My hon. Friend gives me a chance to clarify the situation. Earlier this year, we changed the permitted development rights on farm buildings, in particular, to allow them to be converted into homes. They would probably come more into the conversion category, unless it involves somebody being able to get planning permission to demolish what was there and then move on to self-build or custom build, as appropriate. I guess that it somewhat depends on the size and quality of the sheep pen.
Many people across the country would love to build their own home, whether by building it themselves or by commissioning a specialist developer. As has been noted, research by Ipsos MORI has shown that over 1 million of them are looking to do so in the immediate future. We know from the latest Building Societies Association consumer survey in September that more than a third of Britons are open to building their own home. That is a phenomenal number to whom this Bill could open up a new market.
That strong level of interest is not surprising. Custom and self-build housing offers people more choice and the ability to design a home to suit their own needs, leading to greener and better-designed homes. If people design their own home, as I am sure the hon. Member for Wolverhampton North East remembers from the home with her parents that she described, they tend to live there longer, and that is good for building stronger communities. In many cases, it is also more affordable than buying a home in the conventional way. A report published by Lloyds Banking Group in 2013 concluded that self-builders can save between 20% and 25% on the cost of an equivalent home on the open market—a crucial saving for many looking to get on the housing ladder. That brings things up to the levels we are talking about with the new starter homes programme under the next Conservative Government.
There are wider benefits too. A strong custom-build sector brings new opportunities for medium-sized and smaller house builders, as well as for housing associations that are looking to diversify their offer. We know this because the Federation of Master Builders and the National House Building Council have found that most smaller builders want to do more custom-build projects. More housing associations are now looking at the option of custom build. It presents a huge opportunity.
Heidi Alexander (Lewisham East) (Lab)
As my hon. Friend the shadow Minister said, there is a very exciting project in my constituency, where L&Q has worked with a group of young people to develop 10 new self-build properties. Does the Minister recognise that such projects give important skills to young people who want to develop their careers, as well as providing them with a house at the end of the process?
Brandon Lewis
Absolutely; the hon. Lady makes a good point. That is a super scheme. L&Q is also doing some fantastic work in regeneration across London. She gives a good example of how house building is not just about providing homes but plays a hugely important part in our communities, as we all know, with people building their own homes and learning new skills in everything from the building itself right through to project management and financing. That is a hugely important option. This also mixes well with modern technology. I saw the building opportunities created by Accord up in Walsall, where there is a factory with 19 staff, 17 of whom were unemployed before it opened. Within weeks, they were building houses, which helps them with their skills challenges.
This sector can speed up the supply of new homes where there is a strong demand for plots, because custom builders do not build for profit—they want to get their project up and running, built and finished as quickly as possible so that they can move in. The up-scaling allowed by modern technology can help even more, so that we start to move from the 20-plus weeks that traditional building can take to just a few weeks. It sustains and creates new jobs and, as the hon. Member for Lewisham East (Heidi Alexander) just outlined from the experience of her own community, supports local economies. The sector already makes an important contribution to our overall housing supply, with about one in every 10 homes being built or commissioned by individuals. Many people are not fully aware of how widespread this already is. It is important to the national economy, turning over about £4 billion per year.
However, the sector in England is not yet fulfilling its potential. In many other European countries, more than half of all new homes are built or commissioned by self-builders. Several hon. Members have referred to this. In Germany, for example, the figure is about 60%, while Austria builds over 80% of its homes this way. Crucially, in these countries, building one’s own home is not just for the privileged few—there is a strong tradition of self-build and custom build right across the social spectrum, and there should be in this country as well. Although I, like many others who have spoken, greatly enjoy “Grand Designs”, it is important that we see custom build not as a hugely challenging activity that only a few have the resources and time to aspire to, but as a mainstream activity that people from all walks of life can participate in. Crucially, hard-working people on modest and reasonable incomes should have the opportunity to build the homes that they want for themselves and for their families.
That is why it is important that we tackle the four key barriers that face self-builders and custom builders. First, there is a lack of suitable plots of land to build on, as we have heard. Only yesterday, I was delighted to be able to talk to the landowners at Ebbsfleet about the opportunities for making land there available as part of the project. Secondly, there is limited finance available to custom builders, especially in the development phase. Thirdly, the significant amount of red tape, especially around securing planning permission, can put off many prospective builders and make life very difficult and costly for them. Fourthly, there is a lack of independent advice that can take people through the process of building or commissioning their own home from start to finish.
We as a Government have taken strong action, in partnership with the industry, to tackle the key barriers holding back the growth of the sector. We are already encouraging more plots of land to be made available through the planning system. Since 2012, local councils, through the NPPF, have been required to assess and plan to address the need for all types of housing, including the demand from those wishing to build their own homes. This has been backed up by our planning guidance earlier this year. I am pleased to say that many are responding with a wide range of policies, proposals and initiatives, many in partnership with the private sector, from Newcastle to Plymouth, and from Norfolk—I am pleased to say, as a Norfolk Member of Parliament—to Cornwall. This past year has seen a record number of permissions, with 230,000 homes being approved through the planning process.
We have also identified 12 Government-owned sites, which the Homes and Communities Agency is releasing for self and custom-build development. The sites include Trevenson park in Cornwall, where Carillion-Igloo proposes up to 60 plots, which sets a good trend.
We have been actively addressing the finance challenge, too. In 2012, we launched a £30 million custom build homes fund to provide repayable finance for larger custom-build developments. That has since been completed by giving self-build groups access to £65 million under the affordable housing guarantee programme, and by introducing, earlier this year, a £150 million five-year “serviced plot” investment fund to finance up to 10,000 more plots. We have been engaging with lenders—including meetings I have had in the past two weeks directly with the major lenders—to see how we can improve the number of self-build mortgages available to the sector.
We have been removing red tape. Self-builders are now exempt from the community infrastructure levy, potentially saving them thousands of pounds on individual projects. We have just finished consulting on a similar policy change to section 106 charges, which, if implemented, will exempt smaller scale housing projects from paying costly planning obligations—the very things that can sometimes prevent this kind of small-scale personal development from happening. We have also simplified design and access statements and made it easier to change the use of buildings to housing, which we know the industry has welcomed.
We are working closely with the National Custom & Self Build Association, which, as other Members have said, deserves great credit, particularly its chair, on the work that it and others in the industry have been doing to improve the advice available to consumers and developers, including the development of an online self-build portal to provide better information for self-builders, which now includes a plot-finding and “find a self-build contractor” service.
That action is having a real impact. According to the National Custom & Self Build Association, there are now more than 5,000 new plots in the pipeline, with many new projects across the country. Many councils are now bringing forward land and developing new initiatives to support custom builders, and there are more lenders operating in the market—26 compared with just 16 in 2011.
We recognise, however, that there is still a long way to go if this form of housing is to become a mainstream option in our country. In particular, we need to do more to address the lack of suitable plots of land being made available for self and custom build, and we know from our constituency mailboxes about the frustration that that lack of land can cause people.
That is why we announced in the Budget earlier this year that we would consult on a new right to build. The idea is simple: prospective custom builders will have the right to a plot of land from their local council to build their own home. Implementing that right in different land markets across the country, with different challenges and opportunities, is potentially complex, so we want to consult widely. I am pleased to say that we published our public consultation on the right to build yesterday, to coincide with the Second Reading of this excellent Bill.
The consultation sets out our vision for the right to build. First, eligible prospective custom builders, including groups of individuals, will be entitled to register with their local planning authority for a suitable, serviced plot of land on which to build or commission their own home. They will be recorded on a right to build register. Secondly, the demand for custom build on the right to build register will be taken into account in the preparation of local plans, so that appropriate planning policies are in place to bring forward sufficient plots of land for custom build. Thirdly, and crucially, registered custom builders will be offered suitable plots of land, with planning permission, for sale through the local planning authority at market value.
This is an ambitious vision, giving local councils an important new role stimulating custom build in their area. I hope as many prospective custom builders, local authorities and businesses as possible respond to the consultation over the next few weeks, to help us tailor the right to build to every local area and every aspiring self-builder in the country. As part of the process, we also intend to ensure that we consult the National Custom & Self Build Association and the Local Government Association. We want all the partners that can deliver this future prospect to work together in order to deliver it in the right way. To underpin the consultation and ensure that the right can work across the country, I announced in September a network of 11 right to build vanguards to test how the right can work in practice in a range of different circumstances.
I want to be clear that the full right to build will only be legislated for in the next Parliament. In particular, the idea of local councils offering plots of land to registered custom builders needs careful consideration. I am delighted that there is cross-party support to make sure that we can work to deliver that. We want to ensure that the right forms an integral part of the planning system and that it does not override the local plan process or trump existing planning designations that are designed to constrain inappropriate development and protect precious landscapes such as our green belt. We want to proceed carefully but fully, and to ensure that the views from the consultation and the experience of the vanguards play their part in informing the full legislation.
We think, however, that there is merit in legislating in this Parliament to establish a key foundation of the right to buy, namely the establishment of local registers of custom builders who wish to acquire a suitable plot of land to build their own home. I am delighted that my hon. Friend the Member for South Norfolk has given us the opportunity to work with him on his private Member’s Bill to put in place that early legislation.
Specifically, as my hon. Friend has emphasised, the Bill will ask local planning authorities to maintain a register of custom builders who want a serviced plot of land in their area and to have regard to the demand of the register in the exercise of their planning, housing, regeneration and land disposal functions. As such, it builds on national planning policy and guidance, which already requires local planning authorities to identify and plan for local demand for custom build in their local plans and five-year deliverable housing supply. In particular, the guidance already recommends that local planning authorities should develop registers of custom builders to help identify local demand.
The Bill as drafted sets out the broad framework for the register and the need for local authorities to have regard to it. The Secretary of State will have the power to make regulations about the operation of the register and issue statutory guidance to local authorities. We are very keen to ensure that regulations and statutory guidance take account of the outcome of the consultation and, crucially, the experience of the vanguards.
Ultimately, it is important that the register is seen as valuable to prospective custom builders—who are, after all, the consumer—and proportionate and not burdensome on local authorities, which we want to deliver this opportunity. That is why we are keen for the consultation to seek views about the practical operation of the register and the balance between a common national framework and—this is hugely important—local discretion and local accountability. In particular, an individual or group of individuals that seeks to acquire a plot of land in a local authority area to build their home would, under the Bill, be entitled to apply to register with the local planning authority.
However, it is important that custom builders have the opportunity to express preferences about the nature of the plot that they ideally seek for their home. We therefore propose, through regulations and statutory guidance, that applicants would have the opportunity to set out broad preferences in their application, such as general location—for example, a particular town—or a realistic price range for the plot based on local land values.
At the same time, the register is intended to demonstrate local demand for custom- build plots. Those on the register should genuinely be seeking to build or commission their main home, and have the financial means to acquire a plot at a going market rate and to build their home on it. We therefore propose to set out eligibility criteria in regulations. If an applicant fails to meet any of the criteria, the local planning authority would have the right to reject the application and not include it on the register.
The consultation specifically suggests four possible criteria—age, local connection, financial viability, and a main residence test to ensure that people are registering only to build their own main home, not a second home or a property to rent out. There is particular merit in giving local authorities the discretion and the right to ask prospective custom builders to demonstrate a local connection to be eligible for registration. That is especially important as new custom build developments should contribute to meeting local housing need, as identified in the local planning process.
We want to ensure that authorities have at hand the tools they need to manage demand effectively; for example, in areas of high demand, such as national parks. That will ensure that those areas are not overwhelmed, and allow the register to focus on identifying and supporting local need. At the same time, we recognise that some parts of the country will want to attract custom builders from outside the local area as part of a wider regeneration plan.
Local authorities will have the power to remove an individual from the register on certain grounds to be specified in regulations—for instance, if an individual notifies the local planning authority that they wish to be removed from the register, or if they cease to be eligible for the register. To ensure that the eligibility assessment and removal powers are not abused, a prospective custom builder who is deemed ineligible for the register following their expression of interest, or who is removed from the register, will have the right to request the local planning authority to review any such decision.
We are keen to ensure sufficient transparency. The register will not be made publicly available for data protection reasons, given that it is likely to contain personal data. It will, however, be legitimate for local planning authorities to make publicly available, on an annual basis, the headline data about the level of demand on the register—for instance, the number of individuals registered and their broad preferences. These data are particularly important as they will help to ensure that local planners, landowners, building contractors and custom builders have a clear idea of aggregate local demand for custom build in their area, and can therefore plan accordingly for their area or business. In particular, the aggregate data would form an important contribution to the process of making the local plan.
The Bill will require local planning authorities to publicise their register so that local custom builders are aware of it, and the Secretary of State will have the power to issue statutory guidance. How the register is publicised will be at the discretion of the local planning authority, taking into account statutory guidance and reflecting its individual circumstances, but I make it clear that we expect publication to be proportionate and not burdensome for local taxpayers.
There is no doubt that the detailed operation of the register will throw up practical issues and challenges. That is why I am pleased that we had such a strong response over the summer from local authorities wanting to become right to build vanguards. I especially welcome the diversity of those authorities, which has allowed us to select a wide range of different types of authorities. All the vanguards are committed to establishing registers and making plots available in response to the level of demand on their register. We will work closely with them over the next year to test the practicalities of maintaining a register and of making sufficient land available across a range of different local housing and land markets so that regulations—under this Bill, as well as under the legislation for the full right to build—can be informed by the practical experience of delivery on the ground.
The list of vanguards includes several authorities that have established a strong custom build track record. Cherwell district council in Oxfordshire has led the way in establishing registers for prospective custom builders through its Build! programme. It is pursuing the largest custom build project in the country at Graven Hill, which will offer nearly 2,000 plots over the next decade on land bought from the Ministry of Defence. Similarly, South Cambridgeshire district council is keen to work with major developers in the area to ensure that its significant growth plans reflect the demand for custom build and enable homes to be delivered faster. Shropshire council and Teignbridge district council, which cover predominately rural areas that face local housing growth pressures, have been at the forefront of developing innovative policies in their local plans to make more land available for custom build.
Perhaps more interestingly, it is not only local authorities with strong growth pressures that are actively considering custom build. Two of the vanguards, Stoke-on-Trent city council and Oldham council, are in areas in the north and the midlands with lower housing demand. They see custom build as part of the solution to regenerate their areas. Sheffield city council is keen to offer its surplus public land for custom build. Its inclusion in the vanguard process will allow us to test how a register can operate in a large conurbation.
We have chosen a number of authorities as vanguards, such as South Norfolk, which is the home council of my hon. Friend the Member for South Norfolk, and Pendle and West Lindsey in Lincolnshire, which are keen to pursue custom build, but are only starting to formulate their final plans, so that we can learn lessons for the majority of authorities that are yet to engage proactively with the custom build agenda.
Perhaps the most welcome bid was a joint bid for vanguard status from the Dartmoor and Exmoor national park authorities. I am delighted that the national park authorities are actively engaging with our proposals. We have no intention of using the right to build as a means of encouraging unacceptable development in our most precious landscapes. However, the national park authorities are keen to explore how the register could be used to identify and address local housing demand from long-standing residents who work and live in their national parks.
Finally, we will work with the Greater London authority on the merits of a pan-London register of prospective custom builders. Although the Bill proposes that the requirement to maintain a register should fall on London boroughs, we recognise that London poses particular challenges, such as high potential demand and significant land constraints, especially in inner London. Just this morning, the hon. Member for Lewisham East (Heidi Alexander) outlined what is happening in her area. Recently, I saw the YMCA using modern technology to put together properties that could just as easily lend themselves to custom build and self-build opportunities for first-time buyers. The experience of Berlin, where there is a growing culture of custom building, shows that custom build can be a viable option in world cities that, like London, face significant growth pressures. We are keen to hear people’s views on the most appropriate approach for our capital city.
I believe that the experiences of the vanguards will enrich the development of the registers for which the Bill legislates. The legislation has been drafted deliberately to ensure that there will be sufficient flexibility in the regulations governing the detailed operation of the registers to reflect the vanguards’ experiences.
We are keen to explore how the right to build can be used to support more custom-built affordable housing. Although custom build is generally considered to be a form of market housing, it has a track record of delivering affordable housing. We think that registered providers can play an important role in bringing forward custom-built affordable housing by bringing sites to market, enabling and supporting others, and providing information and support.
Not that long ago, I was proud to take the Secretary of State to see the first council-built homes in a generation being built in my constituency of Great Yarmouth. Those homes are being built using modern technology and the skills of local people from the great Great Yarmouth college. The very same technology that is delivering those homes could easily be used to deliver homes on a larger scale for custom build and self-build projects in constituencies right through the country from Great Yarmouth to Cornwall, Newcastle, London and elsewhere. Our consultation proposes that the register should enable prospective custom builders who are eligible for affordable housing to register in partnership with a registered provider.
In conclusion, I am determined to ensure that we help everyone who aspires to build a home of their own. The Bill marks an important milestone along the road to achieving that. Along with the consultation and the vanguards that I have outlined, I am keen to build a consensus on how the right to build can be implemented effectively to deliver long-lasting change and make more high-quality homes available to hard-working people. I commend the Bill to the House.
Question put and agreed to.
Bill accordingly read a Second time; to stand committed to a Public Bill Committee (Standing Order No. 63).