The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Scott of Bybrook) (Con)
My Lords, I begin by saying thank you to the noble Baroness, Lady Warwick of Undercliffe, for the opportunity to debate this important issue. I know it is of considerable interest to many noble Lords and I am grateful for their contributions today.
I also give a very warm welcome to the noble Baroness, Lady Taylor of Stevenage. It is lovely to have somebody else from local government to join the little local government family we have in this Chamber. It is also nice to see her face to face, as I watch her most Sundays on the BBC Look East programme from my house in Norfolk and I feel I know her from that. It is lovely to see you, and I hope we can spend a bit of time together talking about things that are of interest to both of us.
The noble Lord, Lord Khan, is absolutely right: it is horrendous and totally unacceptable that Awaab Ishak died so tragically in a house in Rochdale—a house that was under social housing providers. We spoke about that last night and I do not want to talk about it much more, other than to say that the Secretary of State gave a very clear Statement in the other place yesterday, which I repeated in this Chamber. That said that we will continue to review everything to do with this case and make the necessary changes to ensure that it does not happen again. I said that yesterday and I repeat it today. As I also said yesterday, our thoughts and prayers are with Awaab’s family at this very difficult time.
A well-functioning housing system gives people the capacity to put down roots in their community and provides them with the confidence that their home will be safe and decent. The residential construction industry is an important contributor to our economic output, enabling movement of labour and productivity growth. Good housing, as the noble Lord, Lord Crisp, made very clear, gives people good health both physically and mentally. The Government accept that.
As my noble friends rightly pointed out, people across the country and across all tenures face housing challenges. Too many people are struggling to get a foothold on the housing ladder and too many houses are substandard. This Government do not underestimate the challenge ahead. We know that there are short-term challenges: mortgage rates and private rents have increased alongside other household bills. We are monitoring the situation closely and taking action where necessary. Our interventions have so far included the Government’s energy bills support package and further measures announced by the Chancellor of the Exchequer today: an extension of the energy price guarantee beyond April, at an adjusted rate; additional cost of living payments, which will be made in 2023-24; and a 7% cap on the increase in social rents. But we heard today that longer-term challenges in the housing market also need to be addressed.
As today’s Autumn Statement shows, the Government are taking the decisions needed to ensure our strategy is fiscally responsible. We will also continue our work to address the longer-term structural issues in our housing system that are affecting people across all tenures. As we strive to build the homes people need, we must champion the needs of communities, provide the right infrastructure, preserve the green belt and protect our environment at the same time.
This Government have made significant progress in reforming the housing system. Levels of first-time buyers are now at a 20-year high. The supply of new homes reached 243,000 in 2019-20—a 30-year high. We are already seeing a steady improvement in the quality of homes and on building safety. The number of people sleeping on the streets in England is at an eight-year low. More than half a million households have been supported into secure accommodation since the landmark Homelessness Reduction Act came into force in 2018.
But, let me stress, there is a lot more to do. That is why we have committed to an ambitious housing mission as part of the Government’s overarching strategy on levelling up. The Levelling Up White Paper sets out the Government’s strategy to create a fair and just housing system that works for everyone, boosting home ownership and improving housing quality.
As I noted last week, during the debate on the Built Environment Committee’s report Meeting Housing Demand, housebuilding is a priority for this Government. I thank my noble friend Lord Lilley for his contribution, and I agree about the need to build more homes. There is compelling evidence that increasing the responsiveness of housing supply will help achieve better outcomes, including helping moderate house prices, provide for population growth and improve quality and choice.
In response to the noble Baroness, Lady Warwick, in the 2019 Conservative manifesto we committed to continue working towards delivering 300,000 new homes a year. We have announced a £10 billion investment in housing supply since the start of this Parliament. Our housing supply interventions are due ultimately to unlock more than 1 million new homes during the current Parliament and beyond.
To help diversify the housebuilding industry, as part of this investment, we have launched the £1.5 billion levelling up home building fund. This fund provides loans to SME builders, developers, self and custom-builders and innovators, to deliver 42,000 homes. It will support SME developers to grow their businesses, deliver new homes and create a more diverse housing market. We are also embracing modern methods of construction that can help deliver good-quality new homes more quickly and more sustainably, with the potential to improve productivity in the industry.
The noble Baroness, Lady Warwick, also raised the important issue of social housing supply. We are continuing to invest in the delivery of affordable homes, including social rented and supported housing. Our £11.5 billion affordable homes programme will build tens of thousands of homes, helping first-time buyers to get on to the ladder, providing more stable, affordable rented options, including social rental, and delivering new supported housing for older, disabled and other vulnerable people. The Government remain committed to our 10-year vision for the reform of adult social care. We are taking forward proposals in the People at the Heart of Care White Paper.
Following today’s fiscal Statement, departments are reviewing specific spending plans. Details will be announced in due course.
The noble Baronesses, Lady Thornhill and Lady Taylor, both raised the matter of right to buy receipts. Since the reform of the housing revenue account and the introduction of self-financing in April 2012, a proportion of receipts is paid to the Treasury. These considerations remain important. There are no current plans to release anything further to councils from the settlement agreed in 2012. However, in the consultation issued alongside the social housing Green Paper we consulted councils as to what other flexibilities we could provide to enable them to build more quickly. In March 2021, we announced a package of flexibilities, including allowing five years to spend receipts and for replacements to be delivered as shared ownership or first homes.
The noble Baroness, Lady Taylor, referred specifically to the requirement that the right-to-buy receipts should not fund more than 40% of the cost of replacement properties. The intention of this cap is to maximise the number of new homes that can be delivered using right-to-buy receipts, with councils adding their own resources to this source of funding. In the package of flexibilities announced in March 2021, the Government increased the proportion of a replacement property that can be funded using right-to-buy receipts from 30% to 40%. It also increased the time limit for spending receipts from three to five years. This set of reforms, combined with the abolition of the housing borrowing caps in 2018, gives councils substantially increased flexibilities to build these replacement homes.
Our ongoing reforms to the planning system as set out in the Levelling Up White Paper will not only enable more beautiful, sustainable houses to be built but will ensure that local communities are at the heart of planning. Our homes must be built in the right places. To this end, we need to make the most use of suitable brownfield land to meet housing needs and regenerate our high streets and town centres. This is why the government policy provides strong encouragement for the take-up of brownfield sites and expects local authorities to prioritise suitable brownfield land for development. The £1.8 billion brownfield, infrastructure and land fund will unlock up to 160,000 new homes on derelict and underused land. The funding will boost local areas by transforming disused sites and investing in vital infrastructure to help create vibrant communities for people to live and work in. This will be achieved while protecting our cherished green spaces.
The noble Lord, Lord Best, raised the important work of Sir Oliver Letwin through his review of build-out. The Government acknowledge the conclusions of the Letwin review and agree that local authorities need more powers to support build-out. The Levelling-up and Regeneration Bill, which was introduced to Parliament on 11 May, will boost local authorities’ powers to manage development, ensuring that it works for communities as well as developers. The Bill will improve the system of locally-led development corporations to support local area plans for regeneration and growth and will include a range of important measures to accelerate the build-out of sites. It will replace the existing system for securing developer contributions with a new flat-rate infrastructure levy that will aim to capture land value uplift at a higher level than the current developer contribution regime, allowing local authorities to use the proceeds for providing the affordable housing and infrastructure that communities need. I can reassure the noble Baroness, Lady Warwick, that the levy will deliver at least as much, if not more, affordable housing than the current system of developer contributions. This will be secured through regulation and policy supported by the provisions in the Bill.
We are considering possible revisions to the NPPF to reflect wider changes to the planning system and will publish further details on this in due course. We are also testing innovative approaches to improving land value capture further through a government amendment which will allow a pilot of community land auctions. Participating piloting authorities will be able to invite landowners to submit a price at which they are willing to sell their land. Once that occurs, the authority will be able to consider the financial benefits of allocating land submitted in their local plan, and then auction the development rights where the land has been allocated. The LPA will be able to keep auction receipts to invest in infrastructure and affordable housing in its areas. I think we will discuss this a lot more when the LUR Bill comes to this House very shortly.
Our housing mission in the Levelling Up White Paper sets out that, by 2030, renters will have a secure path to ownership, with the number of first-time buyers increasing in all areas. Since spring 2010, over 800,000 households have been helped to purchase a home through government-backed schemes such as shared ownership and right to buy. In 2021, the annual first-time buyer numbers had reached a 20-year high at over 400,000. Our ongoing commitment to build new homes, including affordable homes, will support more households on to that ladder. Of course this is a difficult time for first-time buyers, which is why we are cutting stamp duty and delivering schemes such as first homes, which provides housing at a discount of at least 30%. We will continue to monitor the state of the mortgage market closely.
For those who bought homes only to find their experience of home ownership restricted by unfair leasehold practices, we are taking forward a programme of reform to improve the leasehold market. In 2022, we enacted the first part of legislative reforms: the Leasehold Reform (Ground Rent) Act. We intend to follow this up with further leasehold reforms later in this Parliament to make it easier and cheaper for leaseholders to buy their freehold, extend their leases, or take over management of their buildings. I will host an all-Peers round-table meeting to discuss leasehold reform on 6 December.
Across the private rented and social rented sectors, our levelling-up mission is to reduce the number of non-decent rented homes by 50% by 2030, with the biggest improvements in the lowest-performing areas. The private rented sector White Paper sets out a 12-point plan to provide a better deal for private renters, including abolishing Section 21 no-fault evictions and, in return, improving possession grounds for landlords. Legislating in this space remains a top priority for this Government, and, to return to the question of timing raised by the noble Baroness, Lady Hayman of Ullock, yesterday, I say that we will bring forward legislation in this Parliament. We have also recently consulted on introducing a decent home standard in the PRS and are considering responses before setting out next steps.
In response to the point of the noble Baroness, Lady Thornhill, on freezing rent, I say that the Government do not support the introduction of rent controls in the private rented sector to set the level of rent at the outset of a tenancy. Historical evidence suggests that this would discourage investment in the sector and lead to declining property standards as a result, which would not help landlords or tenants. Recent international examples also suggest that rent controls can have an inadvertently negative impact on the supply of housing and may encourage more illegal subletting.
The social rented sector is equally at the heart of our housing mission in this country. As the Chancellor announced in the other place as part of his Autumn Statement, we have set a 7% ceiling on social housing rent increases next year, saving the average tenant £200. Having carefully reviewed the responses from our consultation on rent caps, our decision strikes an appropriate balance between protecting social tenants from high rent increases and ensuring that social landlords are able to continue to invest in new and existing social housing and to provide decent homes and the services that tenants require.
The housing White Paper sets out a wide range of measures which together will ensure that residents live in safe and decent homes, are treated with fairness and respect, and have their problems quickly resolved. The Social Housing (Regulation) Bill is part of our programme to deliver on those White Paper commitments. As your Lordships know, it is a short but radical Bill: that is what the sector needs and tenants deserve. I am immensely proud to have recently taken it through this House as a crucial element of the Government’s response to the terrible Grenfell tragedy. The Regulator of Social Housing—the body responsible for regulating social housing in England—will be taking a new, proactive approach to regulating social housing landlords on the issues which matter most to tenants. The Bill will drive significant change in how social landlords behave, forcing them to focus on the needs of their tenants. Where they do not do this, they will be robustly held to account.
The noble Baroness, Lady Warwick, also raised the issue of energy efficiency in social housing. We have committed to consulting on setting minimum energy-efficiency standards for the social rented sector within six months of the Social Housing (Regulation) Bill receiving Royal Assent. It is right that we give landlords the opportunity to feed in on the approach, including how they manage this within the context of competing pressures. We have also secured more than £1 billion to the social housing decarbonisation fund to support landlords so far, with a total of £3.8 billion committed within this Parliament.
After the tragedy of the Grenfell Tower fire, we are determined to learn the lessons of the past. We will ensure that residents of high-rise buildings are safe, accepting and implementing the findings of the Hackitt report. The Building Safety Act received Royal Assent on 28 April 2022, with ground-breaking reforms giving residents and home owners more powers and protections so that homes across the country are safer. It delivers far-reaching protections for qualifying leaseholders from the costs associated with remediating historical building safety defects and enables them to hold those responsible for building safety defects to account. The Act establishes three new bodies to provide effective oversight of the new regime: the building safety regulator, housed within the Health and Safety Executive, a national regulator of construction products, located in the Office for Product Safety and Standards, and the new homes ombudsman. Many of the detailed provisions within the Act will be implemented through a significant programme of secondary legislation.
Across all our work, we are focused on transitioning to net zero, in line with the Government’s 2050 targets. In 2025, we will introduce the future homes standard, which will ensure that all new homes produce 75% fewer carbon emissions than under current regulations, and that they are net-zero ready. We are also consulting on options to mandate assessment of, and limits to, whole-life carbon impacts of new construction in 2023.
For existing homes, the Government are investing £12 billion in help-to-heat schemes to ensure that homes are warmer, cheaper to heat and more efficient. In England alone, the average home below the Government’s target energy performance certificate C rating will spend over £550 more than one at the threshold; in total, that is £8 billion wasted per year. Therefore, the Chancellor, in his Autumn Statement today, announced a new national ambition to reduce the UK’s final energy consumption from buildings and industry by 15% by 2030 against 2021 levels.
I will go through this as quickly as possible, if noble Lords are happy for me to; they may want me to stop. I will just talk about homelessness and rough sleeping, because it is important. We are taking action to ensure that everyone has access to a good home. In the levelling-up White Paper, we set out our commitment to tackle homelessness and end rough sleeping for good. This is why we are investing £2 billion over the next three years into homelessness and rough sleeping.
Again, I thank the noble Baroness, Lady Warwick, for securing today’s debate. Utilising the strategy set out in the levelling-up White Paper, and our extensive policy programme, this Government are committed to addressing the challenges faced by households across tenures of housing in England. I look forward to working with noble Lords to deliver a housing system that works for everyone.