Westminster Hall

Thursday 12th September 2024 Westminster Hall

Thursday 12 September 2024

[Carolyn Harris in the Chair]

Short-term Lets: Regulation

Thursday 12th September 2024 Westminster Hall

13:30

[Rachel Blake (Cities of London and Westminster) (Lab/Co-op)]

I beg to move,

That this House has considered the regulation of short-term lets.

It is an honour and a genuine privilege to serve under your chairship, Mrs Harris. The issue of short-term lets is an acute one for my Cities of London and Westminster constituents, so I am pleased to have the opportunity to raise it today and to discuss it with colleagues from across the House and across the country, and I look forward to the discussion with the Minister.

We need to improve the regulation of short-term lets in this country, from constituencies such as mine in central London to Truro and Falmouth in Cornwall, East Thanet in Kent, Morecambe in the north-west, and in cities like York—represented so ably by my hon. Friends today—where the demand for short-term accommodation is so high and the housing crisis so acute. Every place has its story to tell—I look forward to hearing them this afternoon—about how short-term lets are changing communities, sometimes for the better, but rarely in a way that is without challenges. We can see from the range of places represented that any solution has to be a national framework with power in local communities to decide on certain elements.

[Alison Hume (Scarborough and Whitby) (Lab)]

Scarborough and Whitby are understandably popular destinations for holidays and short breaks, but the impact of short-term holiday lets is forcing people out of the towns. Today there are only seven homes available to rent on Rightmove in the Whitby area, while there are 300 properties on short-term let platforms. Does my hon. Friend agree that the Government need to move at pace to introduce licensing and new planning powers for councils?

[Rachel Blake]

I agree, and the work that my hon. Friend has done to research the impact on the private rented sector is really helpful. I hope that we will continue that work together.

If I may relate this debate to wider business in the House, it is incredibly welcome to be conducting this debate the day after the introduction of the Renters’ Rights Bill. I warmly welcome the Minister here, and I congratulate her and the wider team on the speed with which they have brought forward legislation that will improve the lives of millions of people.

[Florence Eshalomi (Vauxhall and Camberwell Green) (Lab/Co-op)]

I congratulate my hon. Friend on securing this important debate. She highlighted the Renters’ Rights Bill, which is a welcome piece of legislation. We want to give security to renters. Is it not right that as well as security for renters, we should also have security and high safety standards for tenants in short-term lets, and people who actually pay their business rates and VAT as part of their operation?

[Rachel Blake]

I am glad that my hon. Friend raises that issue, which is twofold. First, it is about a level playing field with other types of business. Secondly, it is about safety for the consumer. I hope that we will have a chance to explore those issues.

There are 27,798 private renters in the Cities of London and Westminster, all of whom will be better off thanks to this Government. The Renters’ Rights Bill demonstrates that the Government are taking the housing crisis seriously, and I look forward to working with my hon. Friend and other colleagues on it as it makes progress through the House.

I think we would largely agree that platforms like Airbnb are not inherently a bad thing. I imagine that many in this room use Airbnb or similar services when we go on holiday, but we cannot deny that this has changed from being a peer-to-peer marketplace to something much broader. What started out as a way to make additional income from a spare room has become a significant cause of the decline in the number of homes available for local residents.

[Noah Law (St Austell and Newquay) (Lab)]

I thank my hon. Friend for securing this debate, which is crucial to the Cornish hospitality industry and housing landscape. Does she agree that while there is a need to establish a truly level playing field, for different kinds of holiday accommodation, including furnished holiday lets, we need to ensure that we support those local bona fide holiday businesses to continue to operate, lest we risk them flooding on to the market as more institutionalised Airbnbs or, even worse, second homes that are not well utilised?

[Rachel Blake]

I agree about the issue of the different types of places and different types of tourism and holiday accommodation. The experience in the centre of London is driven by technology. Previously, the ability to let out a room or even a whole home was much less, but in areas that have longer-standing tourist let economies—such as my hon. Friend’s area and those of other colleagues—we have found that there are different challenges. I believe that those can be discussed through the progression of the regulation of the sector. I thank him for raising that important topic.

[Andrew George (St Ives) (LD)]

Does the hon. Lady agree that this is about the politics of justice, not the politics of envy? It is not just an issue of the taxation of furnished lets. There has been an industrial movement of properties—second homes—going from being registered for council tax to being registered for business rates, and people then apply for small business rate relief and pay nothing at all. Against that, we do not get the investment in affordable homes for local people. In Cornwall alone, £500 million of taxpayers’ money has gone into the pockets of holiday let providers, while those specifically created, for planning reasons, with planning restrictions are outside that—

[Carolyn Harris (in the Chair)]

Order. I call Rachel Blake.

[Rachel Blake]

I thank the hon. Gentleman for that helpful intervention and for elaborating on that point. I definitely believe in the politics of justice over the politics of envy. Technology has industrialised this sector, so we need to come up with a policy framework that reflects the scale of the changed situation.

Having large numbers of whole short-term lets in relatively small geographical areas, and on an increasingly commercial basis, as we have discussed, hollows out communities. It causes waste management issues and gives rise to concerns about community safety, and it depresses the availability of homes in the private rented sector.

I will discuss the impact on housing supply and then come on to the environmental impacts. One of the issues with this topic is that in some areas, there is a lack of concrete data, at least in part because of the lack of regulation. That means that much of the information comes from the experience of housing teams in local authorities and what data can be scraped from the relevant platforms. According to detailed work by Westminster city council, around 13,000 properties are listed as available for short-term let in Westminster. Over 20% of the housing stock in the west end ward are short-term lets and, at the time of the census, 30,000 properties in Westminster had no full-time residents. We have that information only because of the hard work of Westminster council’s environmental health officers and others.

One in every 85 homes in the capital is available for short-term let on some basis for an undetermined number of nights each year. That is a problem in itself. As Claire Colomb, professor of urban studies and planning at University College London, noted:

“London is one of the least regulated European cities”

when it comes to short-term lets. Even Airbnb has been calling for a registration system for years, and the Short Term Accommodation Association agrees with the need for a national administered registration scheme.

Allowing short-term lets to proliferate without regulation is a potential challenge to growth. That may sound counterintuitive, but the variety of accommodation options in the tourism industry means that they are not on a level playing field, as we have discussed. Hotels, traditional bed and breakfasts, and hostels have to abide by safety regulations, which short-term lets, for example, simply do not.

Where we do not lack statistics, though, is in housing need. The latest homelessness figures show the highest ever number of families in temporary accommodation in London: 65,280. In March this year, over 3,000 households were in temporary accommodation in Westminster alone. I am sure that that is borne out in the inboxes of all Members here.

Every day I hear from a new family struggling to stay on an even keel after they have had to move to temporary accommodation away from school and their support networks. Just this week, I heard from a mother who has been moved to Dagenham, over 12 miles from her daughter’s school, where she also works as a teaching assistant. She is realistic about how long they are likely to be in temporary accommodation and knows the state of the London private rented market, so to prevent her son from having to commute for four hours a day and to try to make sure that he has friends locally, she would like to move him to a school in Dagenham, but without childcare support that means giving up her job. Families across London and across the country have to make that kind of decision every day, and it is not good enough. It is creating incredible pressure on our wider system and local authority finances due to the rising costs of supporting households in temporary accommodation—London councils estimate the cost to be £90 million every month—and it is all because there are simply not enough affordable homes for people.

Many of these pressures are directly attributable to the failures of the last 14 years, whether it is austerity eating into the resilience of our public services or the failure to reform the planning system to give local places more control over what is happening in their communities. In government, Labour banned the long-term use of bed and breakfasts for homeless provision, and between 2005 and 2010 the number of households in temporary accommodation halved. The national affordable homes programme got Britain building between 2008 and 2011, and the Mayor of London has started building the highest number of council homes since the 1970s. Even in opposition, Labour MPs such as Karen Buck, the former Member for Westminster North—parts of which are now in my constituency—improved housing standards through the Homes (Fitness for Human Habitation) Act 2018.

The proliferation of short-term lets of whole homes is making the availability of private rented homes much worse. Of course, London is a proudly international city, and we need to make sure that flexible accommodation options are available for visitors, but we will remain a thriving international city only if we ensure that sufficient housing is available for Londoners. Whole homes rented out consistently as short-term lets—again, I am not talking about residents who go on holiday and list their homes while they are away—are making it much more difficult for communities to stick together.

I was contacted by a constituent, Jayne, who summarised the situation well when she wrote that

“when I first moved here twenty-five years ago, I had neighbours. Now I am concerned about the security of our building because of the constant turnover of strangers”.

In strong communities, such as the ones that we all represent and the neighbourhoods of the Cities of London and Westminster, neighbours are the ones who watch our kids when we go for a job interview and who help us to book a GP appointment. It is these communities that are at risk if we do not take action now to regulate short-term lets. As a proud Labour and Co-operative Member of Parliament, I believe that the answer lies in community power, creating local assets and businesses that are owned—in the realest sense of the word—by the people who use and rely on them. What would it look like if, instead of a tourism sector that stretches the resilience of communities, we built one that created opportunities?

As well as hollowing out communities, there are environmental challenges in the growth of short-term lets in the Cities of London and Westminster. Waste management and noise are consistent issues. There is almost no way for councils to enforce against them, not least because they do not have access to the resources to do that, so any policy on enforcement action comes at the cost of council tax payers, rather than those creating the problems in the first instance. That is one of the consequences of an under-regulated market.

Local authority environmental services teams are working tirelessly on these issues, but they can enforce against only those they actually catch red-handed in breach of the rules. That makes it very challenging for short-term lets, as the visitor is gone in a matter of days, and it is difficult to establish a responsible and accountable person for those listings. That is why a registration scheme needs to ensure that there is not only a unique property reference number, but a single point of contact responsible for the property. Frequently, the noise from short-term let flats is intolerably loud at very unsocial hours and unbearable for long-term residents, and it should be avoidable.

The lack of clear and consistent regulation means that enforcement capability sits with organisations and individuals who are not incentivised to enforce, while those who want to enforce are often those without the resources. A private landlord whose tenant is using their property as a short-term let is not incentivised to enforce against a breach of lease—although they might choose to—unless it is causing them any direct inconvenience. They would rather avoid reletting the property. The same goes for freeholders whose leaseholders are sub-letting on a short-term basis, whereas resident management organisations and the council, which of course want to enforce wherever possible, lack either the resources or legal recourse.

However, there are solutions. I believe that we must create a compulsory registration scheme that captures each individual property, using a unique property reference number; ensure that platforms are sharing data, as part of that scheme, on the number of nights for which each property, identified by its unique property reference number, is listed on their sites; ensure that the registration fee is reasonable and proportionate so as not to drive out the small or individual hosts in the market; ensure that where whole-home accommodation is consistently being let out on a short-term basis, there are in place commercial measures, including a named, verified and accountable individual, gas safety certificates, commercial waste contracts where necessary, and appropriate insurance; and give local authorities the power to prosecute those accountable individuals for antisocial and illegal activity, such as fly-tipping. I simply do not believe that that would be overly onerous.

Proposals to manage short-term lets through the planning system are welcome in theory, but the proposals by the previous Government were not suitable for this context. These proposals were a new use class and associated permitted development rights. A new use class for short-term lets not used as a sole or main home is not problematic in theory. The issue comes with the proposal to automatically reclassify existing dedicated short-term lets into this use class without planning permission. This, as the Local Government Association has pointed out, would be at odds with the premise and purpose of creating a new use class for short-term lets, and would give local authorities no say in their location, size and quality.

There are practical solutions to all these challenges. I urge my hon. Friend the Minister, when she, along with colleagues from the Department for Culture, Media and Sport, considers this issue, to ensure that there is a robust national registration scheme, with data input from the platforms, as I mentioned, and that applications for short-term lets that exceed 90 days per year are dealt with under the normal planning application process for a change of use, rather than our automatically entrenching the current unsustainable situation. Local authorities must have enough resources—probably from revenue raised from the registration scheme—to enforce the rules.

Those suggestions learn the lessons of attempts to regulate short-term lets in other major cities, where they have benefited from the data and information available. I firmly believe that we should use all the powers at our disposal to address the housing crisis. Although I know that dealing with short-term lets is just a small part of solving the problem in places such as mine, in the Cities of London and Westminster, it could improve people’s lives, strengthen our communities and at least ease the desperate need for housing in the private rented sector, so today I urge the Minister to prioritise this. I would be grateful if she outlined a timeline for Government action on bringing forward a national registration scheme and considering and consulting on the future regulation of short-term lets through the planning system.

[Several hon. Members rose—]

[Carolyn Harris (in the Chair)]

I remind Members that anyone wishing to speak needs to bob. I have to impose a four-minute time limit from the outset, as this debate is oversubscribed. You can all sit down until I have finished. I call Anna Sabine.

13:48

[Anna Sabine (Frome and East Somerset) (LD)]

In my fairly rural constituency, many owners of short-term lets have been in touch with me this week because they are worried that this debate will focus particularly on the challenges in major cities and tourist towns and not take into account local rural economies that often rely on some element of short-term lets to survive. I should say that many of the people who have contacted me are also very happy to see the sector further regulated, so they are not anti that. Does the hon. Member for Cities of London and Westminster (Rachel Blake) agree that there is a balance to be struck between regulating short-term lets and supporting the importance of what they bring, particularly to rural economies?

13:49

[Rachael Maskell (York Central) (Lab/Co-op)]

It is always a pleasure to see you in the Chair, Mrs Harris. I congratulate my hon. Friend the Member for Cities of London and Westminster (Rachel Blake) on an outstanding presentation of all the issues that we have been wrestling with for so long. I spent six months on the Levelling-up and Regeneration Bill fighting for the licensing of short-term holiday lets. We only managed to achieve a registration scheme and a consultation on a change in use class. As my hon. Friend said, that would grandfather the rights of existing short-term holiday lets, locking in the inequity that we already see in our communities.

I have around 2,000 short-term holiday lets in my own constituency and I know the challenges that they bring as housing demand outstrips supply. As a result we have a serious housing crisis, not least where we have clusters and people lack access particularly to family homes. Short-term holiday lets break up communities and distort the normal community life that we have come to expect.

We need a Bill—I have one I prepared earlier, which I presented to the House in 2022; I believe it still stands today. I will talk the Minister through my Bill, which has a licensing scheme rather than a registration scheme for the conversion of domestic properties into short-term holiday lets in exchange for a fee, differentiated of course if somebody lets out a single room in their own property.

Local authorities could issue fines or remove licences if conduct was criminal or if antisocial behaviour continued in the home. Also, a licensing scheme would ensure proper standards in the homes, with environmental controls, health and safety standards and electric and gas checks. That would bring short-term lets level with the traditional B&B sector so that there was no inequality there. It would also restrict the number of days that they can operate. Local authorities would be able to determine the standards within which they practised, giving them control in local communities.

The Bill was drawn from best practice across the world where schemes have already been tried, tested and tweaked, so we know that it would operate well. It would improve safety, the environment and communities. The licence would be renewed every three years to balance the administrative burdens with the need for inspection. It would be self-funding, with no extra cost to local authorities. Every short-term holiday let would have a named person who could be contacted and who would be liable for the management of the property. Also, the licence would say how many people could stay at the property so that there was not an overcrowding problem.

We know that as Friday night comes and the wheelie trolleys go down the streets, neighbourhoods are in fear because they know the parties are about to arrive. Well, we can get on top of that and also the criminality. These places have been used as pop-up brothels, for child exploitation and as drug dens. By ensuring that a proper scheme was in place, we could get on top of that, too. It would help the industry, landlords, visitors, and most of all communities and would regenerate our housing for the purpose for which it was built.

13:53

[Richard Foord (Honiton and Sidmouth) (LD)]

It is an honour to serve under your chairship, Mrs Harris. I congratulate the hon. Member for Cities of London and Westminster (Rachel Blake) on calling this debate. Many of us in this House were eager to have it, so we are glad that she secured it. I am also glad that she referred to examples of short-term lets from beyond her constituency of Cities of London and Westminster because it would be a real error to see short-term lets only from the perspective of the sorts of properties that are available in the area outside this Palace in which we speak today.

I urge the Minister and civil servants who might be listening not to draw entirely on examples of the challenges that London boroughs experience around short-term lets. They would be welcome to come at any time to Devon and the Honiton and Sidmouth constituency that I represent to see the fantastic tourist businesses that exist before they consider regulation of the sector.

We must beware of having a one-size-fits-all policy that might fit very well here in London but that does not fit nearly so well in our rural areas and coastal towns and villages, which are quite depopulated. It was only yesterday that there was a debate in this Chamber on the depopulation of rural areas, and such depopulation is what is at stake here.

We know from the Professional Association of Self Caterers UK that traditional self-catering businesses could be subject to some of the new rules that are being introduced after the spring Budget, which was introduced by the right hon. Member for Godalming and Ash (Jeremy Hunt) when he was Chancellor of the Exchequer. The right hon. Member talked about stripping away parts of the furnished holiday let regulation system to create what he thought would be a level playing field. However, I can assure you, Ms Harris, and others that there will not be a level playing field, because there is no level playing field between those traditional holiday lets—the self-catering businesses that are already so excellent—and some of the fly-by-night Airbnb properties that are put on the market for overnight rent but taken off long-term lets. They are neither available to long-term renters nor being marketed to the same standards that we have come to expect of traditional self-catering properties.

This issue is crucial for the economy of Devon. I have with me a report from the Devon Housing Commission, which has been examining the shortage of housing stock in the county. It says that the “traditional” holiday let sector is at risk of losing £779 million of income. That sector encompasses not just those people who let their farmsteads or perhaps their heritage houses; it also includes the food and drink sector and the entertainment and tourist sectors, which depend on holiday makers.

The Liberal Democrats welcome the proposal for a registration scheme and the efforts to try to make more housing available for those seeking long-term lets. However, we also need to be careful. In particular, I urge that we pause the furnished holiday let regime that the former Chancellor of the Exchequer introduced in the spring.

13:57

[Lizzi Collinge (Morecambe and Lunesdale) (Lab)]

It is a pleasure, Mrs Harris, to serve under your chairship.

I thank my hon. Friend the Member for Cities of London and Westminster (Rachel Blake) for securing this debate. My constituency is very different from hers, but they are both worthy of consideration when discussing short-term lets. Morecambe and Lunesdale is a constituency with a thriving urban and rural tourism economy. From the stunning landscapes of the Lune valley to the beautiful coastlines of Morecambe Bay to the wild beauty of the Yorkshire Dales National Park, we are blessed with an array of attractions.

Visitors to our constituency contribute to the local economy, support small businesses, and help to maintain the vitality of our towns and villages. Short-term lets, such as holiday rentals, play an important role in enabling this tourism and provide much-needed accommodation options. They also support local businesses, such as shops, restaurants and activity providers.

However, although we recognise that contribution, we must also acknowledge that the rapid growth in this sector is causing unintended and harmful consequences. Residents in areas such as Silverdale, Arnside, Sedbergh and Dent are seeing the effects of too many properties being taken out of long-term residential use and converted into holiday lets. The balance between supporting tourism and ensuring housing availability for local people is becoming harder to maintain. In Morecambe, we will soon welcome Eden Project Morecambe. As a responsible constituency MP, I am trying to look forward to see what risks, as well as benefits, that project might bring. One of the key risks is the potential impact of short-term lets on the local housing market. Already, some of the worst casework in my inbox is due to a shortage of housing.

That is why I believe that a licensing system for short-term lets that is fair, takes a balanced approach and works for both tourists and residents is right. Regulations would ensure that properties met safety standards, were used responsibly and did not unduly harm the local housing market.

I stress that I do not want to limit residents’ ability to occasionally rent out a room, or exchange their home in a bid to get an affordable holiday. For Morecambe and Lunesdale, a balanced approach is crucial. Our local economy benefits greatly from tourism, and short-term lets are a key part of that success, but we must ensure that it does not come at the expense of local residents who are struggling to find a home or find stability in their community. Yesterday, I spoke about the number of young people leaving our rural areas, and short-term lets are contributing to the problem of depopulation.

We must look at the broader infrastructure challenges that come with an increase in short-term lets. I know some will say that regulating short-term lets would harm our rural economy, but I disagree: I believe that thoughtful, locally tailored regulation will strengthen it and help the existing businesses that pay business rates and meet safety standards.

Morecambe and Lunesdale is a place where tourism and community life go hand in hand. Short-term lets play a role in supporting that, but they must be properly regulated to ensure that local people are not harmed. Our policy must strike the right balance, and I look forward to working with Members from across the House, the local authority and tourism organisations to ensure that.

14:01

[Ms Polly Billington (East Thanet) (Lab)]

It is a pleasure to serve under your chairship, Mrs Harris. I thank my hon. Friend the Member for Cities of London and Westminster (Rachel Blake) for securing this debate.

My constituency is made up of three towns that symbolise English seaside holidays: for more than two centuries, people of all classes have visited Margate, Broadstairs and Ramsgate to take the fresh sea air and enjoy our marvellous beaches and amazing microclimate. Where and how people stay has changed over the years. As boarding houses, holiday camps and large hotels have declined, short-term holiday lets have opened up the chance for many to take a short trip to the coast; but that is not without its drawbacks for many in our community.

Hotels and places offering bed and breakfast are regulated and licensed, which ensures good standards of safety and environmental health for customers, and means that the services the council needs to provide for such establishments can be planned for. Appropriate business rates also mean that the services can be provided. None of that happens with unregulated short-term holiday lets, facilitated by platforms optimistically set up as part of the sharing economy. Instead, as the popularity of British holidays and short breaks has risen, not least since the pandemic and Brexit, so have property prices in places such as East Thanet, as people buy homes as a second place for them to stay at weekends and then rent them out when they are not there. Data compiled by VisitEngland suggests that there has been a 75% increase in short-term holiday lets since 2019: more than 2,000 properties are available for short-term let this year.

[Helena Dollimore (Hastings and Rye) (Lab/Co-op)]

My hon. Friend and I both represent beautiful coastal constituencies. Does she agree that we must get the balance right between the contribution that short-term holiday lets make to the tourism and hospitality economies in our constituencies and the need for affordable homes for locals, to address the acute housing crisis that both our constituencies face?

[Ms Billington]

I could have not said it better myself.

The large increase in short-term holiday lets has left whole streets dark and empty for months on end as the days shorten, with perhaps a small glimmer of light and activity over Christmas and new year. One of my constituents said in an email only today:

“We don’t have any neighbours: they are all Airbnbs…Our lives are being hugely impacted by huge parties each weekend!”

The problem affects the community in many ways. How can primary school places be planned for when family homes do not hold families? How can the council prepare for waste collection and disposal from effectively commercial premises when it does not know where they are or when they are occupied? How do the police deal with the increase in antisocial behaviour that follows from the proliferation of party flats when they are not licensed or regulated? How does a whole community deal with spiralling property prices, driven by an increased appetite to make money from homes rather than live in them?

If Members search on Zoopla or Rightmove for rental prices in Thanet, they will find 140 flats and houses available for less than £1,000 a month. Then if they search Airbnb for Margate, Ramsgate, Broadstairs or equivalent places to stay, they will find more than 750 short-term lets next spring for £100 or more a night. There can be no doubt that such a mismatch is helping to drive house price inflation, rent inflation and the shortage of housing availability in Thanet where, during the summer months, a flat can be rented out as a short-term holiday let for potentially three times or more the rent it would fetch as a home for someone.

We are a seaside community made up of holiday resorts. We are proud of our heritage and know that it will and should be part of our economic future. Yet the beauty and attraction of the place that people come to visit needs to be underpinned by a strong community, with decent services and affordable homes for those who live there all year round. There must be a balance.

I am confident in my advocacy for regulation, not just because of the concerns raised by residents but because voices within the industry in my community also see the impact of rising house prices and stretched public services on their families and employees. The Minister should be in no doubt: East Thanet is ready for regulation and licensing to support our holiday industry and our community. I only urge that the package of measures really is designed with communities like ours, not imposed on them. Ideas on how to license, introduce and enforce standards, plan services and facilitate a process that works for those who offer the service, as well as those who use it, should be taken on board from those who are already living with the consequences of an unbridled market with few, if any, checks or balances.

We know we are not alone in Thanet. Many of my colleagues along the Labour Benches also represent coastal communities. This debate shows that the unregulated nature of the market is blighting a host of communities where people rightly go to enjoy themselves and contribute to the local economy. I urge the Minister to consider how the package of powers and tools can support our coastal communities in particular to thrive.

14:06

[Joe Powell (Kensington and Bayswater) (Lab)]

I congratulate my hon. Friend the Member for Cities of London and Westminster (Rachel Blake) on securing this debate and giving the subject the attention it deserves. We obviously share a border, but we also share an office in this place that, with its high ceilings and windows, comfortable sofas and views of Whitehall, I am sure would fetch a very high price if it were a short-term let. I hope we can agree that we will not be doing that in our period of sharing an office.

When I was knocking on doors during the general election campaign, the issue of short-term let regulation united constituents in South Kensington, North Kensington, Bayswater and Lancaster Gate. That was due to the current effective free-for-all with weak rules that are barely enforced, leading to issues that had very real and personal consequences for them and their families. It was not just the antisocial behaviour, noise and associated crime, but the violations of building insurance, mansion block rules and tenancy agreements, which had very real impacts on service charges and their day-to-day living in flats. I therefore agree with many of the speakers in the debate that there must be a middle ground where we can find sensible regulation that allows a destination like Kensington and Bayswater to continue to welcome millions of tourists from around the world, but with a system that can also help tackle our housing crisis.

To give hon. Members a sense of the scale of the problem, I share councils—Kensington and Chelsea and Westminster—and it is estimated that more than 5% of properties in both those council areas have been listed as short-term lets. As my hon. Friend the Member for Cities of London and Westminster said, the latest estimate in Westminster is 13,000. It is therefore important that any proposed changes related to change of use do not lock in those numbers, and that we sequence the reforms correctly.

There are some things that work and I praise the councils that, with limited tools, have been able to take some steps on enforcement, especially in Westminster. Kensington and Chelsea agreed a deal with Airbnb that would share data around some council blocks, so that leaseholders and council tenants in those blocks who might be in breach of their tenancy could be investigated. However, that also struck me as unfair when we have 40% of our residents in the private rental sector, where there is very little regulation.

As for solutions, I join others in calling for the Government to consider a licensing scheme, while thinking carefully about some of the lessons already learned. For example, the 90-day rule is totally unenforceable. With multiple platforms listing properties, and very small and limited—even non-existent—resources in local authorities to enforce the rule, we must ensure that fees are paid into the system to help cover the enforcement cost for local authorities, so that the cost is proportionate. We must also ensure that each property—not just each host—is registered, because individual properties have different consequences. This is an important part of tackling our housing crisis. I am delighted with the Renters’ Rights Bill, introduced yesterday, and I believe that if we also brought in a complementary package of reforms, it could make a real difference for constituencies such as mine.

14:10

[Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)]

This debate was called by a London Member, my hon. Friend the Member for Cities of London and Westminster (Rachel Blake). I am grateful to her, but I am happy that so many Members from across the country are here too. I wanted to make sure that our voice from Cornwall, where this is a really big issue, was heard very loudly. We have been running a “first homes, not second homes” campaign for a number of years.

Cornwall is the local authority with the largest supply of short-term lets outside London. There are around 24,300 properties in Cornwall, which is up 30% on 2019, while there are about 27,000 houses on the social housing waiting list—hon. Members can see the balance there. Statistics from the council tax base tell us that there are probably about 13,000 second homes registered in Cornwall. That is nearly 5% of the total housing stock, which is nearly five times higher than the average across England. Plus, we have roughly only 10,000 council houses and 22,900 housing association homes in Cornwall. We have 800 families in emergency or temporary accommodation. Lots of families have been evicted under section 21—a situation that will hopefully improve, now that the Bill has been introduced. Businesses struggle to get key workers. The private rented sector has all but collapsed in Cornwall, to be honest.

The taxpayer has lost about £20 million per year, as a result of the loophole allowing second homes to be registered as holiday lets for business purposes: they pay neither council tax nor business rates. During covid, approximately £170 million went to properties that were registered as business lets, with £100 million of that going out of Cornwall, which shows the ownership of the properties.

We have done an awful lot of work on this, and I suggest that the Minister should consider a toolkit of measures to deal with some of the issues. First, lots of people have talked about a licensing scheme obliging owners of short-term lets, including Airbnbs, to register them for a fee for three years, which seems like a sensible amount of time. We would then know how many there were and where, and could push for fire and safety checks to be mandatory. It would be a similar scheme to the licensing of houses in multiple occupation, which currently only applies to homes registered for five or more people; it would seem sensible to increase the scope of HMO licensing as well.

Secondly, we want the business rates/council tax loophole closed. It should not be possible to pay no council tax or business rates on a property; it is just not fair. Thirdly, Cornwall council has already voted to double the council tax on empty second homes, and has actually asked the Government if it can triple it. Given that the council is Conservative-run, and that this decision was agreed cross-party unanimously, it shows how severe the problem has become in Cornwall. If we were to implement that, every time the council tax was doubled it would raise £25 million.

Finally, we should create a planning use class for short-term or holiday lets, so that homeowners need to actively apply for permission for the change from “lived in” to “holidayed in”—flipping the default that the Conservatives suggested. Those are the four measures I would like to see in the toolkit, which could be given to local authorities or could form part of the devolution package.

14:14

[Markus Campbell-Savours (Penrith and Solway) (Lab)]

My constituency includes parts of the Lake District national park and I have been a councillor for the town of Keswick for a number of years, so this has been a big issue for me. It was interesting to hear my hon. Friend the Member for York Central (Rachael Maskell) talk about the number of holiday lets in her constituency, which I think she said was 2,000. The CA12 postcode, which comprises Keswick and the surrounding villages, has 1,000 holiday lets. The impact on a micro level is part of the issue. There will be people in some councils around the country who will listen to this debate and think, “What are they talking about?”, but others will know exactly what we are talking about and recognise the problems that it is causing for our people.

I have followed this debate for a few years, and I appreciate the toolkit approach, but my worry is that that is throwing everything at it. We have to remember that some of our tourism economies are now quite reliant on this accommodation. We have even seen some traditional holiday accommodation, such as bed and breakfasts and guest houses, move away because people prefer self-catering options. For me, the question is how we remove the bubble, which is causing so much harm, without destroying our tourism economy. We need to look at the range of options and evaluate them by asking what we would really gain from them and what damage they would cause.

I want to start with tax, which is a funny one. Some people have the idea—I have never bought into it—that if we throw taxes at people, eventually there will be a new equilibrium and all of a sudden we will hit a sweet spot where we have the right number of holiday lets and everyone is happy. Even if we were to achieve that in the Cities of London and Westminster or in Cornwall, it might not work in my area. I do not believe the tax system is designed in a way that will allow us to manage this problem. I appreciate the arguments about fairness and what is just, and whether it is right that, every time a property turns from a residential property to a holiday let property, the tax burden of the parish precept has to be put on the neighbours, because of the way that calculation is done. I get that parts of the tax system are unfair, but I still do not think it is the answer to our problem.

There is also the registration system. I am grateful to my hon. Friend the Member for Cities of London and Westminster (Rachel Blake) for bringing this issue to Westminster Hall. I used to be a Labour activist in her constituency and I remember it being talked about on the doorstep, but Westminster has a key thing that some other areas do not: the 90-day rule. It also has many people living in leasehold properties who are forbidden by their leases from offering short-term lets. The real issue in Westminster is the cat-and-mouse game whereby the leasehold block management companies chase people to try to prove that photographs on Airbnb are of the inside of their flat. Neighbours make complaints, but often enforcement is not possible. I can see the power of a registration scheme for enforcement by those companies and by councils. We have seen this problem on the Churchill Gardens estate, with chocolates on the pillows —the works.

I can see why a registration system would work in London, but there is a big flaw in it. In my area, it would only allow us to do one thing: count how many short-term lets there are. I do not need to count them to know the damage they are causing. What we really need is caps. Some people say, “Well, use the planning option,” but that would see permission given in perpetuity under permitted development rights. It would be a disaster for my community if the 1,000 holiday lets were made permanent in that way.

My hon. Friend the Member for York Central suggested a licensing scheme, and I think that is the way forward. That would allow us to build in caps. Importantly, whereas the planning system is under-resourced, does not have the funds and is front-loaded because people only pay for planning applications at the beginning, under a licensing scheme, owners would have to pay on an annual basis.

14:18

[Andrew George (St Ives) (LD)]

I congratulate the hon. Member for Cities of London and Westminster (Rachel Blake). I think I got the name of her constituency right; I come from Cornwall, so I do not know exactly how the boundaries cut in this part of the world. In my part of the world, as the hon. Member for Truro and Falmouth (Jayne Kirkham) explained, hundreds of families are still being evicted to make way for yet more holiday lets, because that is the way the tax system and what I will call the economic advantage system work in a place like ours. I will come to the tax system, which the hon. Member for Penrith and Solway (Markus Campbell-Savours) referred to.

We need to address issues of social justice. As I said earlier, this not the politics of envy; it is the politics of justice. I know that we have all been heavily lobbied by those who are concerned about changes in the rules for furnished holiday lets, but we are not being lobbied by the people who are being made homeless as a result of the evictions that are taking place to create even more of those holiday lets.

The late, great Paul Flynn used to say that it is the role of a Member of Parliament to seek out the silent voices, and I believe that is what we should be doing. We should be looking at the issues of social justice and not only listening to the loudest voices in the room. We also need to distinguish between properties that are given specific planning permission that provides for holiday lettings with restricted occupancy and those that would otherwise be used, or have been used, for permanent occupancy. That point has been addressed in the debate already, but I wanted to emphasise it.

I am very much in support of carrying on in the direction of a registration scheme. I also support the hon. Member for Truro and Falmouth on widening the requirements for a C5 change of use class order so that specific planning permission is required for any non-permanent occupancy of a property, not just holiday lets. That is really important, because otherwise we will have all sorts of flipping going on in the system.

The problem we have is that since the Conservative Government introduced the opportunity for second home owners to flip them in order to apply for business rates, and then apply for small business rates relief and pay nothing at all, billions of pounds have gone into the pockets of very wealthy property investors when we should be spending that money for local people. It is simply unfair that the poor are penalised through council tax for allegedly underusing their council house, but the rich are being rewarded for underusing their property investment vehicle. I would be surprised if a Government who say that those with the broadest shoulders should bear the greatest burden do not address that issue or the issue of social justice. In Cornwall, £500 million of taxpayers’ money has gone into the pockets of holiday home owners since 2012, and that is simply unacceptable. I hope that we can address those issues by having not only a stronger planning policy but justice in the tax system.

14:22

[Mr Joshua Reynolds (Maidenhead) (LD)]

It is a pleasure to serve with you in the Chair, Ms Harris. I thank the hon. Member for Cities of London and Westminster (Rachel Blake) for securing this important debate, and I also thank her for making the distinction between homeowners who sometimes rent out their property when they are on holiday and the commercialised industry that has developed. There is a clear distinction between the two, and I thank her for raising it.

Short-term holiday lets have a role to play in boosting the local economy in holiday and city destinations, as has been mentioned by Members already. Until recently, I was the vice-chair of the VisitWindsor partnership, and I saw for myself the benefits that short-term holiday lets can bring to a town, particularly during events such as the funeral of Her Majesty Queen Elizabeth II and the coronation of King Charles III.

In the 19th century, my constituency of Maidenhead, aided by the advent of the railways, became a popular holiday destination and was known as the jewel of the Thames. Today, it is not necessarily the go-to place for a weekend away, but we still have a number of short-term lets, which are not for holidays but instead support UK and global headquarters based in the town. They provide flexible accommodation for employees and visitors who come to the constituency, spend a few nights in a short-term holiday let and use our local facilities, such as the fantastic restaurants and businesses that we have. That is really welcome, but there is too much of a good thing.

The Royal Borough of Windsor and Maidenhead council is one of many up and down the country that is facing rising housing costs, as it is battling to build both affordable housing, and temporary accommodation for people who find themselves homeless—some of whom have been evicted from properties that have made their way to being short-term holiday lets, as my hon. Friend the Member for St Ives (Andrew George) discussed. Some people are being forced to uproot their lives, take their children out of school and give up their jobs to move elsewhere in the country. It is devastating for everyone involved.

We have heard how councils could play a role in what the future looks like, but we have seen local authorities being asked to do more and more with less and less, which has plunged some into financial crisis. In rural areas, the growth of short-term holiday lets is undermining our communities. Key local services such as bus routes, shops and post offices are closing down. The hon. Member for East Thanet (Ms Billington) mentioned being told, “We don’t have any neighbours.” No Member can fail to be moved by that statement. When we hear something like that, I think everyone is clear that something needs to change.

The Liberal Democrats have long argued for local authorities to be given more powers, backed up by proper funding, to control second homes and short-term holiday lets in their area. We would allow local authorities to increase council tax by up to 500% where a home is bought as a second home, and bring in a stamp duty surcharge for overseas residents purchasing properties. In that way, owners who profit handsomely from the tourism business would be forced to pay back into their local communities.

During consideration of the Renters (Reform) Bill, the Liberal Democrats argued for a six-month moratorium on the marketing of a property as a holiday let if it had been repossessed by the landlord on no-fault grounds. Local authorities are key to this, because they know what is right for their area. The hon. Member for Morecambe and Lunesdale (Lizzi Collinge) spoke earlier about a thoughtful, tailored, local approach, which we would welcome.

We are calling for a separate planning class for short-term holiday lets, requiring owners to apply for a change of use and allowing local authorities to set their own numbers.

[Noah Law]

Does the hon. Member agree that for furnished holiday lets that are subject to planning restrictions, it should be possible to register a change of use given the impending legislative changes?

[Mr Reynolds]

I thank the hon. Member for that intervention. We need to make sure that what we do is backed up by funding so that local authorities are able to enforce the changes that are needed. I would not want to see local authorities having changes forced upon them without the finances and manpower to carry them out. We have seen so many cases recently where local authorities have a duty to do something but not the finance or manpower to do it.

We recognise that local authority housing teams have been hollowed out. Local authorities need the support to be able to enforce whatever decisions are made. I am hopeful that the Minister can tell us the Government’s thoughts about that. I think asking local authorities to put time and work into these changes, with the necessary finance and manpower, will be a worthwhile investment, because it is about time we turned the tide that we have seen engulfing our communities for so long.

I repeat that we need to draw a distinction with respect to people who have gone about this business in good faith. We do not want to penalise them, or people who have inherited a property and become second home owners by default. We all know that short-term holiday lets are growing in an uncontrollable manner. That is the thing that we really need to stop, especially where big business is involved, because it can rip out the heart of our communities. Our proposals would give control back to local authorities and communities, because that is where, as Liberal Democrats, we always believe that power should lie.

14:29

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

It is a pleasure to serve with you in the Chair, Mrs Harris. I add my congratulations to the hon. Member for Cities of London and Westminster (Rachel Blake). It is good to see her following in the footsteps of her predecessor, who secured a number of debates and made many contributions on the impact this issue has on that constituency and others. May I also commend the work that London councils have done on behalf of local authorities in the capital to highlight the impact of this issue and bring forward constructive policy suggestions?

There is a high degree of commitment to cross-party working on this issue. As we have heard, it has an impact on constituencies across the country, not just here in the capital, and it was much debated in the last Parliament, particularly during the era of the covid pandemic. We saw many of our constituents who wished to go on holiday or needed to travel for work unable to use hotels, and they therefore made the best possible use of providers such as Airbnb to secure accommodation that met the covid regulations in place at the time.

Many of us worked on the assumption that post-covid there would be a return to the market as we had seen it before, which clearly has not been the case. At the same time, longer-term changes, driven partly by Government but also by wider issues in the market, have seen reducing profit margins for those in the buy-to-let market and people facing higher costs for the standards of the buildings that they maintain. They have also seen the introduction of significantly increased checks on tenants as a result of the need to crack down on unlawful lettings and market changes more generally, as the big players such as Airbnb and Booking.com have sought to create a greater supply of this type of accommodation for commercial reasons.

Clearly, the regulations introduced in 2015—particularly in the capital, with the 90-day limit and the requirement that somebody had to be paying residential council tax on accommodation for it to be let, as well as ensuring that the hon. Member for Kensington and Bayswater (Joe Powell) would not be able to let out his parliamentary office should he wish to do so—are examples of measures taken by Government with a view to ensuring that this market played a positive role in local communities. However, as has been highlighted by many Members, significant issues clearly remain despite those measures and that high degree of cross-party consensus.

As with many things, I put it to the Minister that there will be an opportunity in the Government’s review of the planning system to consider points about the use classes that would apply to property, in particular to introduce requirements around planning consent being sought for those properties that could create a nuisance because of their proximity to other types of residential development, and to ensure that powers that may be enforced are available to local authorities through the planning system.

[Markus Campbell-Savours]

Is the hon. Gentleman aware that planning authorities can barely wash their own faces, let alone take over the enforcement of thousands of holiday lets? Does he not think that that could be a huge challenge, which could perhaps be better funded through taking money directly from the holiday let operators?

[David Simmonds]

I started my political career as the chairman of a planning committee in London, and I am very aware of the challenges faced by planning authorities—not just in the capital, but elsewhere.

The design of the system around enforcement is clearly intended to ensure that it is financially self-sustaining; we have seen some examples of that with local authorities, including those that have entered into contracts with the private sector specifically to ensure higher levels of enforcement funded by fines and charges levied against those abusing the system. Not all local authorities have reached the stage where they are prepared to undertake that work, but clearly both the available market in providers and the powers and freedoms that local authorities have enable them to do that if they feel that it is an appropriate and proportionate solution to the level of challenges and concerns that they face in their local community.

We know that the current situation reflects a long-standing determination on the part of Governments of all parties to ensure that there is an increase in the accommodation available. Measures such as Rent a Room tax relief, which was introduced many years ago, were intended to ensure that there was a greater supply of flexible accommodation, so we need to ensure that we strike the right balance in this market.

I finish with some observations about the context of the housing market in which this debate is taking place. The UK has the most intensively used housing stock of any major developed country in the world. We have very few derelict or empty properties, so given the level of demand in comparison with other major economies, it is clearly important that we ensure as far as possible that accommodation is available to those who need it.

An element of that will be short-term lets, which play an important role in the economy, but with many people looking to secure longer-term and permanent housing that clearly needs to be a high priority. In taking forward their planning reforms, I urge the Government to consider the fact that there are already an additional 1.4 million new homes in England with planning consent already granted by our local authorities. Priority should be given to ensuring that those consents are fulfilled and those homes are built, rather than prioritising, for example, the deregulation of the green belt.

I also want to bring something else to the attention of those present. In some respects the previous Government’s record deserves criticism, but on measures for net additional dwellings and new homes per calendar year—both major measures on housebuilding—development under the previous Government hit record levels; in fact, in recent years it hit the long-term record for as long as the statistics have been gathered. Indeed, during the last Parliament, a net additional 1 million new homes were built in England alone, in fulfilment of the manifesto commitment.

Many hon. Members have highlighted lots of issues that need to be dealt with effectively. I would encourage the Government to consider how, through their review of the planning system, those issues can effectively be brought forward. They should also consider how existing measures that have been highlighted, such as enforcement powers and the means of recouping costs, which are already available and used widely by some local authorities, could be put into action more swiftly.

14:35

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rushanara Ali)]

It is a pleasure to serve under your chairmanship, Mrs Harris. I start off by congratulating my hon. Friend the Member for Cities of London and Westminster (Rachel Blake) on securing today’s important debate and highlighting the concerns of her constituency. I have an interest to declare: she is one of my oldest friends. I am proud to see her in her place, making her first speech in Westminster Hall.

I am grateful to Members from across the House for their contributions. They have raised extremely important issues and concerns about the impact of short-term lets on their constituencies. They have highlighted the serious challenges that such lets pose in a diverse range of constituencies, in cities such as London and in rural and coastal communities. They have also highlighted the need for action, but in a way that is appropriate for the different kinds of areas and challenges they face.

Contributions have also highlighted a wider point about housing and housing affordability, a major issue for our country. I hope this debate provides an opportunity for us as a new Government to take on board the many ideas, thoughts and insights that colleagues have shared. If we want to get this agenda right, it is important for us to have an ongoing dialogue.

The key concerns highlighted are around safety, waste management, antisocial behaviour, cost of housing and communities being displaced. That should not take away from the fact that we all recognise the important contribution that short-term lets can make to local economies, but they have to be done in a way that is appropriate and does not cause harm in local communities. The pressures cannot be properly understood without taking into account the impacts of such issues.

I recognise the frustrations that many communities feel, where there is an excessive concentration of the properties under focus and particularly in places where there is an acute lack of affordable housing for local people. I also recognise that short-term lets can cause other concerns for local people, including the hollowing out of communities and antisocial behaviour.

[Andrew George]

The Minister mentioned the contribution that self-catering short-term lets make to local economies. Hotels, purpose-built short-term chalets and so on also make an important contribution to local economies and often operate at a disadvantage relative to the many individual short-term lets that are operating below the VAT threshold and that in other respects are avoiding making their contribution to the local community or, indeed, national taxation.

[Rushanara Ali]

I thank the hon. Gentleman for his point. This is why this debate is so important: we must make sure that we address the issues and challenges being raised. The new Government are taking stock and considering a full suite of options for the regulation of short-term lets before we make policy decisions, but I have heard clearly from hon. Members about the issues and challenges they face in their constituencies. We need to ensure that the response is proportionate and appropriate, reflects the different kinds of issues affecting different constituencies, and avoids unintended consequences. The actions we take must properly address those issues.

In England, the average house price is more than eight times annual earnings, and affordability issues are even more acute in the constituency of my hon. Friend the Member for Cities of London and Westminster. The average monthly private rent in London increased by 9.7% last year, and is more than one and a half times higher than the average monthly rent in England. Although it is true that London remains one of the country’s least affordable areas, we are in the middle of a housing crisis right across the country. Years of low house building across all tenures, combined with rising interest rates, have resulted in too few genuinely affordable homes. The issue has been exacerbated in London, coastal towns in places such as Cornwall and areas such as the Lake district by the proliferation of short-term lets and second homes, as hon. Members have highlighted. That is why we want to go further by giving local authorities tools to tackle short-term lets where they are an issue.

The lack of robust data about short-term lets, which my hon. Friend the Member for Cities of London and Westminster mentioned, means that local areas often struggle to define the true extent of the problem and are unable to effectively manage the impacts. Although this data is not perfect, in 2022 a call for evidence suggested that there are about 257,000 short-term lets in England, about 43,400 of which are in London. I know my hon. Friend is keen to have better data about short-term lets in her constituency, and I am happy to hear that she and a number of other hon. Members support the short-term lets regulation scheme. We are committed to introducing the register, which will be an essential tool in enabling local authorities and central Government to access relevant data on short-term lets.

[Markus Campbell-Savours]

Does my hon. Friend recognise the issues with the registration scheme, which the previous Government described in their consultation as “light touch”? It will not meet the needs of areas such as mine, where we do not have the additional legal powers available in places such as London.

[Rushanara Ali]

I am grateful to my hon. Friend for his intervention. It is important that we look at what can be done as part of that exercise. He will appreciate the point I made about the new Government needing to take stock of what is working, where the good examples are and what we can draw on. The register is part of that, and I look forward to ensuring that colleagues’ insights and contributions are taken into account.

[Rachael Maskell]

Will my hon. Friend take a look at my Bill, which proposes a licensing scheme but allows local authorities to determine some of the parameters necessary to control the number of short-term lets in their local area, including control zones, so that we do not see a real expansion of such lets in precious places such as York?

[Rushanara Ali]

I thank my hon. Friend for the offer on the Bill that she prepared earlier, and I know that officials listening to this debate will consider the range of suggestions and proposals that colleagues are making today.

We know that many local authorities are eager for the registration scheme to be operational as soon as possible. We share this view and officials are currently working at pace to operationalise the scheme. The Department for Culture, Media and Sport is now in the initial phase of a digital development process for the register, which will allow us to test and refine the possible options for design and delivery of the scheme. We will factor into that process the points made today and will update the House in due course.

As hon. Members have highlighted, London is unique in England in having certain powers regarding short-term lets. Since 2015, primary legislation has provided that homes in London that are liable for council tax may be let for temporary sleeping accommodation for up to 90 nights in a calendar year. Planning permission is required to let for more than that. However, as has already been pointed out today, in practice local authorities in London report that this limit is difficult to apply and enforce, due to a lack of data on addresses, ownership and the number of nights that properties are let for, and because of limited enforcement capacity. Points were well made in this debate about other parts of the country that do not have the London scheme.

We recognise that more needs to be done to ensure that authorities in London have the tools they need to enforce the limit. As we design the short-term lets register and consider future policy, we will keep in mind the uniqueness of each area of our country and in particular the interactions with the existing legislation that applies to London.

I recognise that the current taxation of short-term lets can be seen to incentivise such use. The Government have confirmed that we will abolish the furnished holiday lettings tax regime from April 2025, which will remove the tax advantages that landlords offering short-term holiday lets have over those providing standard residential properties.

At the end of July, the Government took concrete steps to abolish the regime by publishing draft legislation, which includes transitional arrangements to help landlords to adjust to the change. Councils will also be able to charge a council tax premium of up to 100% on second homes from April 2025. It is for councils themselves to decide whether to charge such a premium in their area.

[Jayne Kirkham]

I have just one small point to make about the furnished holiday letting scheme. There are some properties in Cornwall for which there are planning restrictions that say they can only be holiday lets and nothing else can be done with the property, because it may be on the same premises as the first property. I just want the Government to be aware of that when the regulations are developed.

[Rushanara Ali]

I thank my hon. Friend for her contribution.

Where a short-term let does not meet the relevant lettings criteria, it will usually be considered a second home and will be liable for council tax, including the council tax premium where councils have introduced it. However, we recognise that this may not go far enough towards ensuring that all short-term lets are properly contributing to the local tax system, as the premium will not impact those short-term lets that are eligible for business rates. We will continue to keep the tax treatment of short-term lets under review and will consider what more is needed to achieve our aims.

Short-term lets are just a part of the housing challenge in our country, which is why we are determined to address the issue of affordability and to do what is necessary to get Britain building again.

[Andrew George]

I thank the Minister for giving way one more time. On the point that the hon. Member for Truro and Falmouth (Jayne Kirkham) made earlier about small business rate relief, could the Minister please make sure that some very strong representations are made by her Department to the Treasury with regard to this issue, because the system is being abused at present? When it was first introduced, it was intended to protect village shops and similar businesses; it was not intended to feather-bed property investors.

[Rushanara Ali]

Again, those are really important points that will need to be factored in as we develop these policies. The hon. Member will appreciate that I cannot make commitments today, but we are at the beginning of this Government. We are very keen to make sure we get the policies right. I thank him for the intervention.

[Richard Foord]

The Minister makes a good point about how she and the Government are setting out on a new term and looking at these things for the first time. But the furnished holiday letting regime is set to change in April 2025, so will she consider a pause and looking at that again, given that there has not been any assessment by the Office for Budget Responsibility of what effect it might have?

[Rushanara Ali]

I am going to make some progress, but perhaps I can write to the hon. Gentleman on his specific point.

I return to the point about short-term lets and the wider housing challenge. Through decisive action, this Government will reform the planning system, because we need to increase the building supply. We have our commitment to building 1.5 million homes over the next five years. We will deliver the biggest boost to affordable and social housing in a generation and establishing a generation of new towns. By doing that, we are improving security for millions of people and unlocking essential economic growth—the growth the country needs. The chronic shortage that the country is facing means that owning a home is a distant reality for many. We are committed to achieving a more balanced distribution of homes by directing them to where they are most required, in areas where they are not affordable. Increased supply will help to moderate house prices over the long term, provide for population growth, and improve quality and choice.

We have introduced the Renters Rights’ Bill, which will end no-fault evictions, and we will lay legislation to further reform the leasehold system. We will open up the dream of home ownership to more people by introducing a permanent, comprehensive mortgage guarantee, and give first-time buyers their first chance to buy new homes. We will publish a long-term housing strategy, which will set out our vision for a housing market that works for all and provides long-term certainty for the market.

In closing, I thank my hon. Friend the Member for Cities of London and Westminster for securing this important debate and for her excellent contribution. I thank hon. Members for their contributions on this issue and assure them that we are very much aware of their concerns. We cannot let short-term lets undermine the availability of affordable housing for people to buy and rent. What is more, we are committed to rebuilding our country by taking the steps needed to fix the foundations of the economy and to ensure that everyone has a place to call home. This agenda is really important. It is vital that we respond appropriately, taking into account the insights that many Members have shared today, and I look forward to working with colleagues across parties. I again congratulate my hon. Friend the Member on securing this very important debate.

14:53

[Rachel Blake]

It has been a real honour to hear the stories of different places across our country. It has been a real privilege to serve under your chairship, Mrs Harris; to be joined by my immediate neighbour and very old friend the Minister, who represents Bethnal Green and Stepney, and by other immediate neighbours, my hon. Friends the Members for Kensington and Bayswater (Joe Powell) and for Vauxhall and Camberwell Green (Florence Eshalomi); and to hear contributions from Members who represent Devon, Kent, Lancashire, Cornwall, Leicestershire, Yorkshire, Sussex and Cumbria. We have been transported to the beautiful landscapes of Morecambe and the lakes, but we have also heard about some of the damage that short-term lets are doing to our communities and how challenging it is to take the action that we need.

I have particularly reflected on the following themes: the risks of depopulation and badly managed tourism, what is happening to the market and the challenges of enforcement in such a complex environment. This debate has clarified how important a localist, devolved approach will be. We have heard compelling and thoughtful contributions on the differences between the self-catered holiday let sector and traditional bed and breakfasts and hostels, and the risks there are to depopulation and otherwise thriving tourism industries if we get this wrong. We heard about the scale of the market impact, properties where rents could be as much as three times lower than the income from short-term lets, and just what that is doing to distort local housing markets.

I am struck by the challenge of effective enforcement and the fact that we have such a complex environment in which private landlords are unable to take action on their tenants. The urgent need for leasehold reform means we can get clarity and ensure we take action by delivering on the Renters’ Rights Bill. I am heartened that we can move forward on this issue. Hearing the Government’s commitment to make progress with a registration scheme is encouraging.

We need to think more about a licensing scheme. I shared some details about a unique property reference number and the importance of making sure that we have data available. I also welcome the idea of a toolkit. I foresee an opportunity with the devolution Bill and the publication of the national planning policy framework to make real progress on this issue to protect all our communities and contribute to tackling the long-term homelessness crisis in this country.

Question put and agreed to.

Resolved,

That this House has considered the regulation of short-term lets.

14:56

Sitting suspended.

New Housing: Environmental Standards

Thursday 12th September 2024 Westminster Hall

[Graham Stringer in the Chair]

15:00

[Graham Stringer (in the Chair)]

I remind hon. Members to bob if they wish to speak so that I can see who wants to speak. Some people have written in—I have a list here. Please be patient if I get names wrong, because everybody’s face is new. I will try very hard to get it right.

[Ellie Chowns (North Herefordshire) (Green)]

I beg to move,

That this House has considered environmental standards for new housing.

I thank the Minister and all colleagues here for attending. This is the first time I have led a Westminster Hall debate, so please bear with me if I get the procedures wrong. We have lots of time today, so I welcome interventions and hope we can have a useful debate and conversation on this vital topic.

I want to begin by saying that I recognise that there have been some warm words from the Government on this topic. I look forward to hearing more detail from the Minister today. I called for this debate because, although I have heard one or two warm words in the last two and a bit months, I have not heard any detail. In fact, I have been concerned about hearing nothing specific whatsoever in the Secretary of State’s speeches that I have listened to. The Government have made major commitments on building new housing and it is crucial to consider what type of housing, so I wish to start by outlining three reasons why I think this is a really important debate to have.

First, it is absolutely topical. The Government, as we have heard on numerous occasions—indeed, just five minutes ago in the previous debate—have committed to building 1.5 million new houses over the next five years, but what sort of homes will they be? In the Green party we specify that we need to think about the right homes in the right place at the right price. Today I want to talk about what “right homes” means, because it is not just about quantity; it is also about quality and the need to think long term when new homes are built.

The Climate Change Committee did a report on the UK’s housing stock in 2019. It estimated that in 2050 80% of houses in this country will be houses that are already built, so we clearly have a massive job to do when we think about environmental standards and retrofitting the buildings that we already have. However, I am concerned to discuss the 20% of houses that will be new, because the worst possible outcome could be that we build lots and lots of new houses but to poor standards, thus requiring the retrofitting of those houses, too, so let us focus on new build homes.

The second reason why the debate is important is the scale of the issue relating to houses. Our built environment controls or influences roughly half of UK environmental impacts. Domestic housing accounted for more than a quarter of energy use in the UK in the last year for which we have statistics. Heating accounts for the largest single share of emissions from buildings. The fabric of buildings is crucial in controlling the impact of the housing and broader building sector on the natural environment and climate.

Thirdly, this topic is crucial because we have a massive win-win-win opportunity here. This is not just about reducing carbon emissions from housing, which is certainly very important and I will come on to that later. It is also about ensuring that new homes are warm, affordable to heat and not mouldy but great for people to live in. Just this week in the Chamber there was a debate about how people can stay warm in winter. We need to make sure that all new homes are built to the highest possible standards so that we do not have people shivering in their homes and choosing between heating and eating. Of course, this is a fantastic opportunity to give the economy a great big boost, creating thousands of high-skilled jobs. If we get this right, it will be a fantastic opportunity for economic renewal. We know that investing up front is much cheaper than having to retrofit later, so let us do this right from the start.

I wrote to the Minister for Housing and Planning before the recess about the timing of the release of the future homes standard, which has been in the works for quite some time now—we were consulting on it back in 2019-20, and again in 2023-24. In his response to me, the Minister said that the Government will release it in due course. If he is able to do so, I would love the Minister to provide some clarification on the timetable for publication of the standard; it is supposed to start implementation next year, which is only three and a half months away, so time is of the essence. Of course, it is vital that the policy is right, and not just fast, but, as we have had so many years to develop it, I would hope that it could be published ASAP.

This is not a new topic. One of the helpful briefings I read in preparation for this debate, from the House of Commons Library, which I recommend to everyone—it produces fantastic materials—reminded me that in 2006, the then Labour Government said that they would amend the building regulations to require all new homes to have net zero carbon emissions by 2016. Of course, that policy was scrapped by the Conservatives in 2015, but we are now eight years on from the point at which Labour previously thought that all new homes should be net zero carbon. This is the moment for the new Labour Government to fulfil that promise and put in place regulations to ensure that ambition will actually come to pass—better late than never.

I will speak today about five key aspects of environmental standards for new housing: maximising energy efficiency; minimising embodied carbon; maximising on-site energy generation, particularly rooftop solar; maximising biodiversity in the construction of new homes; and maximising resilience against things like flooding and overheating, which will become more and more important as time goes by and climate change becomes a reality that hits us ever harder.

The first aspect is maximising energy efficiency. To meet the Government’s own carbon targets, almost all buildings will need to fully decarbonise. It is not just me who says that—it was in the Government’s heat and buildings strategy back in 2021. That is what the future homes standard was supposed to ensure. However, the version of the future homes standard that is being consulted on is looking at a 75% improvement on 2013 levels by 2030, which is neither good enough nor strong enough. We need to get to all homes being net zero carbon as soon as possible.

I do not expect the Government to introduce measures whereby every single building has to be built to that standard in 2025, but the industry needs a glide path. We need the Government to set that strategy to provide a framework within which the industry can sort out supply chain issues, both in terms of materials and, crucially, through upskilling, so that we are building zero carbon houses, not ones that are just a bit more efficient than the previous ones. The previous Conservative Government were very pleased to talk at length—I wanted to say “to bang on”—about the fact that more houses are reaching EPC C standard than 15 years ago, and that is indeed true. However, virtually no houses are reaching EPC A or B; that figure has increased from 1% to 3% of houses over the past 15 years. Almost no new houses are being built to those really high standards, which is what we need. Of course, there are major problems with energy performance certificates and the standards assessment procedure that underpins them—I am not pretending that that does not need review, and I commend the moves that are being made in that direction. However, we need to recognise that, flawed as it might be as a metric, it is telling us something really quite serious and worrying, which is that housing quality is not increasing at anywhere close to the rate that it needs to.

Key to reducing energy demand is fabric-first design. That needs to be absolutely integral to the future homes standard. It is deeply concerning that the previous Government claimed that the 2021 changes to building regulations were sufficient, and refused to tighten them any further. It is utterly wrong-headed. In making buildings more energy-efficient, fabric-first must be central. I would welcome a commitment from the Minister that fabric-first will be core to the future homes standard.

I also ask the Minister to lift the restriction placed by the previous Government on local authorities setting higher standards for house building in their areas. I do not think that local authorities setting piecemeal higher standards is the way we will get to a decarbonised housing sector, but we should not hold them back from going further and faster while we wait for Government to show the necessary leadership on a national level. We have too much piecemeal policy on this, both between local authorities and between the four nations of the UK. We need to ensure that we are united in a race to the top for standards, not a race to the bottom.

[Calum Miller (Bicester and Woodstock) (LD)]

I thank the hon. Lady for securing this debate and the Minister for being here to respond. I second the hon. Lady’s point about the standards set by local authorities. I represent part of West Oxfordshire district council, where the Salt Cross development was brought forth. It was challenged by the developers because the local authority sought to set forth a net zero standard. The developers were unsuccessful in their appeal, but in a very obliging step, the previous Government issued a written ministerial statement in December 2023 clarifying that no local authority could have the power to set net zero standards. Does the hon. Lady agree that it would be very helpful if the Minister confirmed that this Government intend to issue a new written ministerial statement to make it more possible, until such time as we have new standards, for local authorities to pursue net zero targets in their planning permissions?

[Graham Stringer (in the Chair)]

Before I call the hon. Lady to resume her speech, this is probably a good opportunity to remind hon. Members that we are all on a learning curve, and interventions should be short and to the point. We do not have a lot of Members here, so it will not be difficult for you to catch my eye if you want to make a speech yourself.

[Ellie Chowns]

Thank you, Mr Stringer, and I will compensate by being very brief in my response to the intervention by saying that I agree absolutely.

I have talked about the need to maximise energy efficiency. Let me move on to my second point: the need to minimise embodied carbon. In the future homes standard, we have some discussion of minimising operational carbon emissions. There is concern here not just from me. Back in 2022, in its report on the sustainability of the built environment, the Environmental Audit Committee expressed real concern that

“policy has focused entirely on operational emissions”,

and that it does not require the embodied carbon cost of construction to be assessed or controlled in any way. The Royal Institute of British Architects is deeply concerned about this, as are others.

In their response to the Environmental Audit Committee’s report, the previous Government recognised that embodied carbon can account for a very significant proportion of a building’s whole-life carbon emissions. They agreed that a standardised method was needed, and said that they would consult on embodied carbon. In a consultation from November 2023 to March 2024 on the future homes standard, the Government said that embodied carbon was outside the scope of consultation on the future homes standard, but that they would consult on it separately.

Does the Minister agree that embodied carbon needs to be part of the future homes standard? We cannot talk only about operational and not embodied carbon. It has been left behind—effectively the poor relation—in the need to assess the carbon impact of new house building. This urgently needs to be rectified. I very much look forward to hearing the Minister’s comments and, I hope, assurance that as much attention will be paid to embodied carbon as to operational carbon, because it is so significant in the whole-life carbon costs of any new housing.

I move on to my third point: maximising on-site energy generation. I have brought up this topic—the need to ensure that all new homes have solar panels—once or twice in the House already since I have been here. I would be delighted to be known as Mrs Solar Panel by the end of this Parliament. I would be even more delighted if, by the end of this year, we had the regulations necessary to ensure that every roof of a new home had solar panels on it because, frankly, that is what is colloquially known as a no-brainer.

Solar panels are one of the things that residents brought up with me time and again on the doorstep. Constituents of all sorts of political background and none said to me things like, “Why are we still building houses and not putting solar panels on the roofs?” It is something with which people have a real, visceral connection. They see new houses going up around them that do not have solar panels on the roofs, and they know that we need to sort out energy generation. Let’s ensure that we maximise use of these wonderful surfaces that are already there. This is a classic example of where it would be much cheaper to put that technology in place at the point of construction, rather than retrofitting it afterwards. I cannot help but conclude that it has not been done so far only because developers are resisting anything that might increase their costs.

Developers are concerned only with the construction costs; we as lawmakers and as a Government should be concerned with the long-term social, public and environmental costs. Of course, this sort of investment pays for itself many times over during the lifetime of the technology. I warmly invite the Minister to confirm that his Government will bring forward measures to put solar panels on roofs as default, either within the future homes standard, the planning and infrastructure Bill or another appropriate legislative mechanism.

My fourth point is about maximising biodiversity. In the words of the 2021 Dasgupta review,

“Our economies, livelihoods and well-being all depend on our most precious asset: Nature.”

This Government have talked a great deal about growth. Unfortunately, the way we currently measure growth does not take account of the costs of the destruction of the natural assets we have. There have been some welcome moves towards recognition of the need to take account of impacts on biodiversity during construction, with the introduction of biodiversity net gain and so on, but so much more could be done. We could specify having bird and bat boxes for the 1.5 million new houses—wouldn’t it be wonderful to have 1.5 million new bird and bat boxes for the creatures with whom we share this beautiful natural environment? Ponds are good for drainage and for wildlife. Let us take into account lighting design and how light pollution impacts nature if we are building these 1.5 million new houses. We could specify hedgehog highways—little holes cut in fences so that hedgehogs can get from one garden to the next—as well as bee-friendly plants, green roofs and walls, trees, hedges and so on.

We have a real opportunity. People are rightly concerned about the effects on the natural environment of the construction of lots of new homes. We certainly need new homes constructed—they should be affordable and accessible to the people who really need them—but let’s not make it an either/or. Let’s not plaster the country with tarmac in some places while keeping less and less space free for nature. Let’s ensure that whatever new housing we are building recognises that we can also create space for nature to live alongside us and to thrive in those areas, too.

A classic example, and a personal favourite, is swift bricks. For just £30, we could put in place a swift brick in every new house to ensure that these beautiful creatures, whose populations have sadly declined by 60% over the past 30 years, can thrive again. I am not just saying this because both my sons grew up playing for Ledbury Swifts football club, meaning that these birds have a special place in my heart; they should have a special place in all our hearts. Let’s make sure that every new house has a swift brick.

My fifth point is on maximising resilience. We must face up to the fact that the climate crisis means that some extremes of weather will be baked in. We must recognise that adaptation has to be part of what we do, as well as mitigation of the climate impact.

I have seen that very personally. I represent North Herefordshire, and in early 2020 Herefordshire was affected by the worst floods that we have had in 400 years of records. Last winter, we had the wettest 18 months on record in the UK. Such events have major impacts on people’s homes, and we have to take them into account when we build new homes. So, please, may we ensure that the future homes standard and the regulations that go alongside it recognise the reality of the need to be more resilient with issues such as flooding and overheating?

Overheating does not occur much in my constituency, but it is certainly an issue in urban constituencies. Former office blocks are converted into housing through permitted development, but often that entails terrible conditions for the people who end up living in those places. Personally, I think that that should not be allowed to happen. Overheating is a significant issue in such buildings. Let us ensure that overheating and flooding are recognised in resilience planning in new housing.

Finally, water scarcity and efficiency—it is not just energy that we need to use efficiently, but water. That was the topic of my doctorate, although not in this country. Let us ensure that we use these pure resources as carefully and efficiently as possible. Again, that needs to be built in, baked in, right at the start of building new houses.

I have a present for the Minister to take away. A few years ago, in Herefordshire, we developed a thing called “Herefordshire Future Homes”, in which we assessed a whole range of building standards, because of the bewildering array of initiatives in place. The industry is now coalescing around the net zero housing standard, which is good news, but we also looked at things such as water efficiency, biodiversity and so on. I will give this document to the Minister after the debate to feed into his work.

Let me remind the Minister what the Government could and should do. They could ensure that all new homes had ultra-high levels of energy efficiency and were built to an EPC A standard right now, with a glide path through to net zero housing standards as soon as possible. Let us resist the pressure from developers to water down the standards, and let us give local authorities the freedom they need to put in place higher standards initially. Let us incorporate embodied carbon in the future homes standard, and set regulations for whole-life carbon limits aligned with the industry’s building standard of net zero carbon.

I have not mentioned this much, but waste and recycling in construction is a core and enormous part of our waste economy. There are significant opportunities for a more circular economy approach. Let us also specify that all new homes should have solar panels on top and swift bricks everywhere. Let us ensure that all new homes are climate change-resilient.

Now is such an important opportunity for the Government to show leadership. As I said at the beginning of the debate, I confess to being somewhat frustrated that they have not taken the opportunity of their major, high-attention speeches on planning and infrastructure—nothing whatever about building quality. There is an opportunity to rectify that, and I would love to hear not only the Minister’s response, but even more, the Secretary of State integrating building quality into everything that she says about building new houses going forward. I look forward to the Minister’s response.

15:23

[Olly Glover (Didcot and Wantage) (LD)]

It is a pleasure to serve under your chairmanship, Mr Stringer. I thank the hon. Member for North Herefordshire (Ellie Chowns) for securing this important debate.

To start my remarks, I will reflect on why this is such an important topic for discussion. Clearly the major consideration, and one of the biggest threats facing us, is climate change and the need to decarbonise, but the beauty of improving environmental standards for new housing is in the many other benefits besides. Investing in insulation, heat pumps and solar-panel fitments for new homes would create jobs and stimulate supply chains, with the subsequent benefit of making it far easier to develop the capability to retrofit existing homes.

A significant benefit of such a policy of getting it right would accrue to those on lower incomes, insulating them not just from the cold, but from energy and fuel market price fluctuations and the global effects on those prices. Dare I suggest that had we been building new homes to good environmental standards for the past 15 years, the Government would perhaps have avoided the winter fuel allowance backlash that is dominating my constituency postbag. This is a great example of a policy that benefits not only the planet, but people and the economy. Many people feel that climate change is an abstract topic, something that is preached at them, and we need to consider more policies that achieve that holy trinity of benefit for planet, people and economy.

Many of my constituents are very frustrated on this topic, similarly to those of the hon. Member for North Herefordshire. They feel that there have been years of wasted opportunities to get new homes right, from design through to build. More energy-efficient homes is a rare example of a near universally popular policy. Unlike 20 mph speed limits, low traffic neighbourhoods or, dare I say, vegan sausage rolls, there are no culture wars to be had here.

I read that the logic of the last Conservative Government, in delaying solar panel mandates for new homes, was optimism about a fully decarbonised electricity grid, which was indeed too much optimism. We also need to work quickly to create a new electricity grid with good storage capability, so that we can capitalise on surpluses of locally generated solar and wind power.

My constituency has seen some of the fastest housing growth in the country, with 8,000 new houses built between 2011 and 2021, at Didcot Great Western Park, Wantage Kingsgrove, Wallingford Highcroft and Grove Wellington Gate, among others. My constituents are baffled by the fact that these houses have been built—and continue to be built—without solar panels, heat pumps or similar. Another development under construction at the moment, Valley Park near Didcot, of more than 4,000 homes, will also not be so equipped. That is despite the efforts of our Lib Dem-led Vale of White Horse and South Oxfordshire district councils, who have done what they can within the current rules to promote positive environmental measures. They do not have the powers to compel developers to meet net zero requirements as part of the scrutiny of planning applications. That also needs to change, all the more so if there is going to be further delay in implementing national environmental standards and effective requirements.

We need to make climate change action meaningful and beneficial for people. Designing new homes to the right standards has the potential to have universal appeal, and rather than solar panels’ only being accessible to those on high incomes, it could benefit people across income ranges. Investing in solar, heat pumps and insulation will make that difference, and stimulate the economy. As the hon. Member for North Herefordshire said, we also need to think about designs that will keep our homes cool in the hotter weather expected in the future.

If we do not create the homes of the future now, there is a risk that we will need to retrofit the homes built now in only a decade or two’s time, at much greater expense, in order to reach our net zero targets. We cannot wait any longer. I hope the new Government will treat the issue with the urgency it deserves, to help planet, people and economy.

[Graham Stringer (in the Chair)]

I move to the Liberal Democrat spokesperson, Zöe Franklin.

15:28

[Zöe Franklin (Guildford) (LD)]

Thank you for calling me, Mr Stringer. I thank the hon. Member for North Herefordshire (Ellie Chowns) for bringing forward this important debate, and for her extensive speech, which was full of sensible suggestions and thoughts. I thank the Minister for his attendance.

Heating our homes is one of the most pressing issues facing the UK right now. The cost of living crisis has sped up the urgent need to improve the environmental standards of our homes to keep people warm and stop people having to choose between heating and eating.

For far too long, households across Britain have been forced to make impossible choices: heating their homes or putting food on the table. It is a disgrace that in one of the world’s wealthiest nations, millions are living in cold, damp homes that are too expensive to heat and are harmful to their health. Developers are not meeting the environmental standards we need for a sustainable future. That is unacceptable.

The Liberal Democrat manifesto said that all new homes need to be zero-carbon and fitted with solar panels. That rooftop revolution would make use of the vast dead space on roofs across the country, generating clean energy right where it is needed. Yet developers continue to submit plans that ignore these opportunities, and homeowners are the ones who pay the price. In my own constituency of Guildford, a developer recently submitted plans for news homes, without including heat pumps. That is bonkers. We know that there will be no new gas boilers in newly built homes after 2025, so why are developers continuing to insist on submitting plans with gas boilers?

All new homes will require alternative heating systems such as heat pumps. By allowing developers to cut corners today, we are passing the costs of upgrading homes on to future homeowners, who then face the high costs of retrofitting—not to mention the ongoing burden of high energy bills.

Developers need to take responsibility, and this House must put the onus on them to do so. Developers are putting homeowners in the position of having to foot the bill for improvements that should have been made when the buildings were first built. Building for the future is not an option; it should be a requirement. We need to incentivise developers to act now, but we must also back up those incentives with strong legislation to ensure that new homes meet zero-carbon standards.

This about more than just the build cost; we need to consider the lifetime cost of these homes. How efficient are they for homeowners over time? For example, a house might be cheaper for the developer if it is built to lower standards, but if it is inefficient, the homeowner is left paying high energy bills for years. Making improvements at the building stage—for example, installing solar panels and domestic energy storage, and ensuring that the home has proper insultation—means that the fear of opening energy bills becomes a thing of the past.

The Liberal Democrats have shared our plan for a fairer deal on new homes and heating. We want homes that do not make people sick, where heating bills are not thought of with fear, and we want every new home to be built to the highest environmental standards. We have two key policies that we encourage the Minister, and his colleagues in the Labour Government, to consider seriously. The first is our 10-year energy upgrade programme, which will begin with free insulation and heat pumps for those on low incomes, and then ensure that every new home is built to zero-carbon standards. We, as Members of this House, know that local authorities play an integral role in our society, so let us give them the power to deliver that, ensuring that it is rolled out efficiently and where it is needed most. Councillors and local residents understand local need, so if there is local need, let Parliament make it work for local residents.

That raises the question of why we are discussing this, when it should have been sorted out many years ago. Conservative failure in government has left households high and dry during a cost of living crisis. Families are struggling to pay their bills, and, instead of support, they are met with rising energy costs and poor-quality housing. Britain’s “warm homes” infrastructure has dry rot, and this plan will cut it out.

The evidence is clear: UK homes are among the least energy-efficient in Europe, with some of the oldest housing stock on the continent. Nearly 40% of our homes were built before 1946, compared to 21% in Italy and just 11% in Spain. Many of our homes are expensive to heat, and inefficient at that. This is not just a financial burden or an environmental issue; it is a public health crisis. The NHS spends an estimated £1.4 billion every year treating illnesses related to living in cold or damp homes, with wider societal costs reaching a staggering £15.4 billion. By upgrading homes with free insulation for low-income households, we can ensure that no one must choose between a warm house and a full stomach. By installing heat pumps and making homes zero-carbon, we will not only reduce emissions but make our homes greener, fairer and more affordable to live in.

The second idea that we encourage Labour colleagues to get behind is getting landlords to upgrade the energy efficiency of their properties. We would require landlords to upgrade it to EPC C or above by 2028, because British tenants are living in housing that is making them ill. It is unacceptable that 35% of fuel-poor households are in the private rented sector, where more than 1 million people struggle with fuel poverty, and an ever-increasing number of private renters live with dangerous mould and damp. I am ashamed to say that that is also causing children to die each year. Inaction from the previous Conservative Government has left people trapped in homes that are harmful and costly to heat. It is appalling that last year, more than 8,000 new homes were built in England with an EPC rating below band C. That cannot be allowed to continue, and I strongly advise the Government to remember the promises they made on it while electioneering earlier this year.

Our plans for landlords are a fair and green message: under Liberal Democrat proposals, Parliament would be able to ensure that children and vulnerable families did not have to suffer because of poor housing standards. We want legislation that requires landlords to upgrade properties to EPC grade C or above, and we want homes to be built with higher EPC ratings from the start. Let me be clear: these measures are about not just improving homes, but restoring dignity and health to those who live in them. Alongside these proposals, we want social tariffs, and we need to decouple electricity prices from wholesale gas. We need to address the fact that we are building homes that do not meet environmental standards that look to the future instead of the past.

We have a cost of living crisis and a climate emergency, and we need to invest in a future where homes are energy-efficient, affordable to heat and zero carbon. Given that the Government intend to remove winter fuel payments to pensioners, it is all the more pertinent that we insulate people’s homes from the very start to prevent them from struggling with their bills and to prevent elderly people from freezing during the winter. If we had insulated homes when they were built, as we are advocating, perhaps we would not have needed this debate. We should ensure that everyone’s home is warm. These changes would make a real difference to people’s lives by lowering energy costs, improving public health and tackling the climate crisis head-on.

It is time we delivered homes fit for the future and homes for the heatless, supporting those who are struggling to make ends meet. It is time, through our environmental standards for the building of new homes, to make our isles greener, fairer and thriving for everyone. I emphasise that, as the hon. Member for North Herefordshire said, we must think about the long-term cost of the homes that we build, not the cost of building them today.

15:37

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

It is a pleasure to serve under your chairmanship, Mr Stringer, and to respond on behalf of His Majesty’s loyal Opposition. I add my congratulations to the hon. Member for North Herefordshire (Ellie Chowns) on securing this debate, and I congratulate other Members on their contributions. The issues raised in the debate have helped to illustrate the complexities inherent in housing environmental standards. We know that the UK has probably—or certainly among—the oldest housing stock of any developed country, and we know about the complexity of housing tenure in the United Kingdom. Freeholder-owned buildings that are often occupied by a combination of leaseholders and tenants continue to be a challenge to Governments of all parties, when it comes to introducing the required updates and retrofits. In the context of housing development—1.4 million units of new housing already have planning consent in the United Kingdom—developers’ feedback on, for example, the cost of solar panels as a barrier to bringing forward new housing remains an active part of the debate.

Governments of all parties have made strenuous efforts over the years to improve the quality of housing, including several aspects of its environmental impact. The 2018 update to energy performance certificates, with a view to setting a deadline of 2025 for all rental properties placed on the market to meet a certain minimum standard, was an example of a Government intervention that aimed to raise standards. Some of the challenges for which the housing retrofit and building sectors have advocated have led Governments to feel that it was necessary to think again. No issue illustrates the complexities more clearly than the point that has been made about nutrient neutrality, something for which decision-making is essentially delegated to a third party under legislation that goes back to the mid-2000s. Central Government’s desire to minimise the environmental impact of development on surface water and waterways has led to significant delays in the delivery of new housing projects. I was going to quote the former leader of South Norfolk council—previously in the Public Gallery—who, in his capacity as a councillor, challenged the impact that that was having on the ability of local authorities to deliver new housing through the planning process, because of the delays in getting decisions made and permissions agreed. As the local authority bringing forward housing, if a site is not viable because of its environmental impact, it is clearly necessary then to be able to make a decision to move forward with other sites. It is clear that the planning process does not always support that decision making.

It is also noteworthy that the Innovate UK study, which looked at the real-world emissions of properties versus the intended emissions and those expected from the design estimates, identified that emissions were on average between two and three times higher than those that would have been expected from the design. I appreciate that Ministers in the new Government, like Ministers in previous Governments, face the challenge that we can do things that sound brilliant in theory, only to discover that how they operate in the real world does not meet the aspirations we all strive for.

I know the hon. Member for North Herefordshire previously served as a Member of the European Parliament. It is worth referring to the recent decision, outlined in a written ministerial statement, that from this period the intended deadline by which all building materials had to meet UK standards updated in 2018 would be set aside, and that products that met the CE standard would instead remain able to be sold into the UK market for an indefinite period. That may be an issue for fire standards; because the European Union standards on fire performance were last updated in 2015, they form part of that regulation, whereas the UK standards were updated in 2018.

Those standards also draw on a wide range of different studies and regulations in respect of performance, from damp resistance to energy efficiency. Again, it would be helpful for the Minister to set out for the benefit of Members present his expectation that those standards will meet the aspirations set out in the 2018 update of UK standards—I have confidence that that will be the case. Then we can be confident that the products sold into the UK market will meet the energy efficiency aspirations that Members have set out, and ensure that those products and materials contribute towards creating high-quality homes that fulfil the important expectations of warmth, absence of damp and the accessibility of fresh air that have been set out.

The national planning policy framework updates in prospect afford a further opportunity to consider how those requirements can be better enshrined in planning law. I appreciate that Ministers have a difficult challenge: the national planning policy framework has something like 19 chapters of detailed guidance. Each local authority is then required to put together its local plan, following public examination, in detailed conformity with each of those 19 chapters. The impact of that, its interaction with local environmental impacts such as surface water runoff, and any requirements for the design and nature of the materials used, in conformity with established local practices, all combine to create a significant challenge.

If the aspirations set out by Members are to be seen in practice, we must make it as straightforward as possible for local authorities to exercise their community leadership role. Rather than having to go through lengthy and expensive processes to demonstrate in planning law that that conformity is present, we must ensure that the standards can be implemented as quickly as possible.

I know the Minister, and other Members who have been in office for some time, will be aware that past Government initiatives, such as those around green homes, although sensible in principle in seeking to make Government funding for retrofit available to households as quickly as possible, have led to significant challenges in their administration. That is especially true where, for example, a business that has been licensed and approved to carry out the retrofit of those initiatives then loses that licence between the time when it has done work on a constituent’s home and the point when the invoice is paid.

The rules and regulations around that area need to ensure that it is as straightforward as possible for all constituents to make the right choice in buying a home, knowing that it meets the highest possible environmental standards, or in deciding to invest in their home in a way that will genuinely reduce running costs and improve the quality of the insulation. In practice, that must fulfil the aspirations the Government set out in allocating the funding.

Finally, it is a source of pride that under Governments of all parties, the UK has seen the biggest per capita carbon reduction from its residents—our constituents —since the carbon reduction target was first brought forward in the 1990s. It is very good that we have managed to achieve that. We have done it through a variety of measures, not just in the housing sector, but, given the significant part that emissions from the housing sector play in our carbon emissions, there is a clear opportunity for the environmental standards that have been thoroughly aired in this debate to play a significant role in how we address this challenge in future.

I can undertake that the Opposition will work constructively over this Parliament, where we can see the opportunity, with Government and other parties to support the implementation of standards and measures that will help to deliver that agenda.

15:46

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Alex Norris)]

It is pleasure to serve with you in the Chair, Mr Stringer.

I am grateful for the opportunity to close this important debate on environmental standards for new housing on behalf of the Government. I start by adding my congratulations to the hon. Member for North Herefordshire (Ellie Chowns) on securing this debate and on the way she led it. I thought her speech was a real tour de force. I could not really believe that it was the first debate she has led in this place, because she spoke with admirable clarity and power. I have to say that is not how I remember speaking in my first Westminster Hall debate seven years ago. In the spirit of the clarity with which she spoke, I will seek to address the points she raised in turn.

I also want to mention the contribution from the hon. Member for Didcot and Wantage (Olly Glover), with its thoughtful and well-pitched tone about the importance of bringing people with us, so that people see this as a good and positive thing in their life and are partners in the process, rather than net zero being something that happens to them. That is really important for us, as leaders in our own communities, and for the country.

We are mindful of the fact that the homes we build today will shape the environmental landscape for generations to come. The hon. Member for Guildford (Zöe Franklin) talked about not putting burdens on future generations. The choices we make shape the built environment that our children will inherit. It is with that long-term perspective that the Government remain steadfast in the commitment to achieving net zero by 2050. The energy efficiency of our buildings and the standards we set to drive that efficiency are instrumental in realising that goal.

Of course, we are acting in the context of an inherited housing crisis and our banner commitment, made during the election, to build 1.5 million new homes over the course of this Parliament. Again, ensuring that those homes meet the needs of homeowners and contribute positively to the environment is not a luxury: high environmental standards are a necessity. Those two goals must not be seen as being in competition, but rather as mutually supportive, because the decarbonisation of new buildings is a vital part of net zero efforts.

From homes to offices, the UK’s built environment is responsible for about 30% of our greenhouse gas emissions. By improving energy efficiency and moving to cleaner sources of heat, we can reduce those emissions now and in the future and, as the hon. Member for Didcot and Wantage said, create warmer, healthier homes, protecting future generations from the impacts of climate change. But there are very real consequences of rising energy costs in the here and now, and the job of Government is to find the balance between getting those homes built, as the hon. Member for Ruislip, Northwood and Pinner (David Simmonds) said, and doing so in a way that is realisable. In many ways, that is our challenge.

I turn to the five points the hon. Member for North Herefordshire raised. First, with regard to future homes and building standards, we are clear in our commitment to introduce new standards next year that will set homes and buildings on a path away from the use of volatile fossil fuels. Those homes will be future-proofed, with low-carbon heating and high levels of building fabric standards, which I know she is interested in. That will ensure that they do not require retrofitting to become zero carbon as the electricity grid continues to decarbonise, which speaks again to the point made by the hon. Member for Guildford.

The previous Government published a consultation in December, which closed in March. We are a new Government—I hate to say it, but it is true—and have been going for only a little more than two months, so we are looking at that very carefully. In her written question to my hon. Friend the Minister for Housing, Planning and Building Safety and her contribution today, the hon. Member for North Herefordshire stressed the need for a response and was keen to know when it will be. I am afraid I have to tell her that it will be in due course. We are talking to the industry and the public, and we want to ensure the standards we set are ambitious and achievable.

The hon. Lady mentioned local authorities, and I can give her clarity on that point. Plan makers’ powers have not been restricted. The Planning and Energy Act 2008 allows plan makers to set energy efficiency standards at a local level that go beyond national building regulation standards, but that must be done in a way that is consistent with national policy. That is the balance that local decision makers will have to strike, but they have that ability.

The hon. Lady also mentioned the written ministerial statement and said that she wants clarity about its future. I am afraid that it is currently subject to judicial review, and as a result I cannot say very much about it at this time.

[Calum Miller]

I am grateful to the Minister for addressing my comments and those of the hon. Member for North Herefordshire (Ellie Chowns). On local authorities’ powers, will he consider issuing a new written ministerial statement in advance of the new housing standards to clarify the one published on 13 December 2023 by the previous Government, which threw some of the efforts by local authorities to raise standards into disarray?

[Alex Norris]

I am grateful for that question. I cannot make that commitment to the hon. Member today. I hope the assurance I have given has demonstrated that there is a pretty clear landing zone for local authorities, but it must work within national standards. I also make the point, as others have, that the future homes standard consultation has come to a close, and we are consulting on the national planning policy framework. So there are some moving plates in the current setting of standards and we must be mindful of them.

The second point that the hon. Member for North Herefordshire made was about embodied carbon. As we make progress on solar panels, heat pumps and all the other ways to reduce operational carbon emissions, we will see emissions fall in buildings, and therefore embodied carbon will make up proportionally more of a building’s whole-life carbon emissions. We are committed to understanding the scale of the challenge as part of our broader efforts to decarbonise the construction sector. It is vital that we encourage industry to reduce embodied carbon by choosing lower-carbon, but still high-quality, materials. That requires a fundamental shift in design and construction, and that is why we are pushing so hard to encourage the adoption of more efficient design practices that minimise waste, which the hon. Member for Guildford mentioned, and make better use of low-carbon materials such as timber. There are some very exciting new technologies in that space. Where it is safe to do so, higher-carbon materials will be gradually replaced along the way.

The third point that the hon. Member for North Herefordshire made was about solar panels, and this is where we may slightly differ. The Government’s judgment is that we should set targets with regard to performance—what is the energy performance of the new home? Solar panels may well be part of that, but for some buildings they will not be suitable. As a result, if the choice is primarily solar, we miss out on a whole array of innovations that can help those homes reduce their carbon footprint, and there is a risk to cost-effectiveness. As I say, we are goal-oriented, rather than method-oriented.

The hon. Lady mentioned biodiversity net gain. We should recognise and build on the work that the previous Government did in this space. We see this—I think they did too—as a real opportunity as we address our urgent housing needs. We owe it to future generations to ensure that development leaves the natural environment in a measurably better state than it was. That is now mandatory for new applications for developments: all new developments, with limited exceptions, will be required to deliver at least 10% measurable net gain. The hon. Lady spoke about 1.5 million bird and bat boxes, but I would not want to be quite as prescriptive as that. We expect to see net gain, whether through the creation or enhancement of habitats on or off site, or through the purchase of registered biodiversity units on the new open market. We are working very hard with the sector to make sure that it realises those brilliant opportunities.

Let me turn to the hon. Lady’s fifth point, which was on resilience and water. As the Minister for local resilience, among a number of things, that was of particular interest to me. Immediately prior to the debate, I took part in the inaugural meeting of the flood resilience taskforce, which seeks to bring together partners to reduce the number and the impact of floods. I know from having dealt with constituents that having your house flooded is one of the very worst things that can happen to you, short of losing your life or losing a loved one, because you live with the impact of it for so long.

We have a responsibility to make sure that development does not contribute to greater flooding, and the planning system is at the heart of that. We must ensure that development is in areas at the lowest risk of flooding and that it uses sustainable drainage systems to mimic natural systems and to slow the flow of surface waters. The current consultation on proposed reforms to the NPPF is seeking views, and we would be interested to hear from colleagues on that. It is a big opportunity.

The hon. Lady also mentioned water. Safeguarding the water supply is crucial to meeting our climate obligations. As we undertake consultations, we are actively looking at options relating to water efficiency in planning and building regulations. We are developing guidance on water-positive and net zero water developments and on how to integrate water efficiency into energy efficiency and retrofit programmes.

To make a quick point about the NPPF, the planning system is critical to delivering sustainable development that aligns with climate goals. Our NPPF reform marks an important milestone in that journey. Our consultation is seeking views on how planning policy can better support the industry to adapt. We hope to get that feedback, and we will consider any and all contributions.

The Opposition spokesperson, the hon. Member for Ruislip, Northwood and Pinner, made a point about product standards to me for the fourth time in the past 24 hours. I can give him clarity that nothing in that statement from 2 September is about the reduction of standards—far from it. I reiterate the commitment I made yesterday that the Minister for building safety, my hon. Friend the Member for Bethnal Green and Stepney (Rushanara Ali), will write to him with further detail.

While building the homes this country needs to tackle the housing crisis, we will ensure that our climate change commitments are met. We will set high energy-efficiency standards, ensure water efficiency, secure biodiversity net gain and deliver flood-resilient developments as we lay the foundations of a sustainable future. We will ensure that everyone has access to a decent, warm and affordable home. That will be one of the standards by which this Parliament is measured and one of the ways in which our adherence to the manifesto on which we were elected is measured, too. We are actively doing that work. I am grateful to colleagues who want us to go further and faster, and that pressure is welcome. I look forward to working with all colleagues as we go along that journey.

15:58

[Ellie Chowns]

I thank the Minister for his response and all colleagues for their very constructive contributions. I heard a lot of common ground from Liberal Democrat colleagues, and I welcome that. Indeed, there was an offer from my Conservative colleague, the hon. Member for Ruislip, Northwood and Pinner (David Simmonds), to work constructively wherever common ground can be found, so let us look for that, shall we?

The Minister made a point on goal orientation versus activity orientation. I reassure him firmly that I am focused on outcomes and performance, not on performativity. That is compatible with a view that all new houses should have solar panels on the roof as a default. There may indeed be one or two cases where it is not appropriate, but it is not an either/or. He seemed to suggest that if we put solar panels on, we might miss out on insulation—I am paraphrasing slightly—but we ought to be doing both/and. It is about doing everything that we can to ensure that homes are as energy efficient as possible and, indeed, that they generate as much of their own energy as possible. Let us get all those i’s dotted and t’s crossed in the forthcoming future homes standards.

On being goal-oriented, the hon. Member for Ruislip, Northwood and Pinner mentioned—though he did not use these exact words—post-occupancy evaluation. That is crucial. There is no use setting standards if we do not enforce them and evaluate whether a building has achieved them. I know that many in the sector are quite frustrated that developers may say they are building something to a certain standard, but unless it is evaluated according to how it operates in real life, we will not know. There is an urgent need for an independent inspectorate to make sure that buildings are performing as designed.

I will finish by reiterating a point that came out in my initial speech and in other contributions: this is about thinking for the long term, and it is about the triple win that I talked about. This is not just about environmental protection, vital though that is to tackle the climate and nature crises. It is about making sure that every new home built is a warm home, so that every person who moves into those homes can keep warm and healthy at an affordable cost—at the least cost possible. This is a social goal.

It is also about recognising the opportunity that this sort of economic renewal policy offers the Government in order to achieve their goals of generating good jobs and so forth, and to strengthen the UK’s position in these crucial sectors. With the green new deal and the economic transformation that we need to see globally, let us take the opportunity and be at the forefront of this, using the Government’s excellent ambitions to build new homes as a chance to kick-start the industries of the future, including construction. There are fantastic entities, such as the New Model Institute for Technology and Engineering in Herefordshire with its centre for innovation in timber technology, which the Minister just referenced.

There are lots of opportunities for innovation, so let us grab them with both hands. Let us build the homes that people deserve in this country and fix the problem of environmental standards for new housing having been too low for too long. This is the opportunity to change that.

Question put and agreed to.

Resolved,

That this House has considered environmental standards for new housing.

16:03

Sitting adjourned.