Local Housing Need Assessment Reform

Tuesday 13th May 2025 Westminster Hall

[Wera Hobhouse in the Chair]

14:30

[John Milne (Horsham) (LD)]

I beg to move,

That this House has considered reform of the standard method for assessing local housing need.

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

Everyone agrees that across much of the country, homes have become far too expensive either to rent or to buy. There is less consensus on the best way to get things back under control. I will argue that throughout the history of the standard method for assessing local housing need, that method has been part of the problem, not the solution.

For a long time, the free market ideology we followed was to build houses randomly until the price came down. Ever since the days of Margaret Thatcher, who single-handedly killed off the public sector contribution, we have never got anywhere near to keeping up with demand. In recent years, the strategy has been to set stiff compulsory building targets and, to that end, the Government introduced the standard method.

We were told that the method would produce clear, objectively determined house building targets for every local authority. We were assured that they would be equally and fairly distributed in line with genuine local need. We can now confidently say that that failed. Many authorities got nowhere near their number. Sometimes that was through dragging their heels, but often it was because their individual targets were outright bizarre and unachievable.

Meanwhile, the system has kicked up terrific public anger and opposition, which in itself gets in the way of success. At times, the Government have resorted to wielding a bigger stick or they have backed off in the face of Back-Bench pressure. Under the present Government, we are heading back towards the big-stick approach. There is almost no attempt to win consent.

I will argue not only that the standard method failed to do what it says on the tin, but that the failure was inherent from the first. It never stood a chance. Far from solving the affordability crisis, the method has significantly contributed to making that crisis worse, and it will continue to do so even under the remodelled version announced before Christmas, because it is based on a false premise.

To be absolutely clear, this is not about national targets. Whether we aim nationally for 200,000, 300,000 or 400,000 homes a year is a separate debate, and I hope we will not get sidetracked by that today. It is easy to tweak the standard method to meet whatever national target we want it to meet, but in practice, national targets have been not much better than slogans, such as Boris Johnson’s 40 new hospitals, which never existed in reality. Instead, it is the local target as applied to individual planning authorities that matters.

Broadly speaking, the standard method compares local house prices to local wages to estimate an affordability ratio, and it adjusts targets upwards if that shows prices to be unaffordable. The sums have been fiddled with many times since the method was introduced, and I do not doubt that such a process will continue. That is where the first big failure comes in: the standard method is supposed to provide an objective assessment of local housing need but, if we were honest, we would acknowledge that it is actually designed to reflect national need.

For example, in my constituency, the growth target based on existing households should now be 527 a year, but our poor affordability ratio takes us all the way up to 1,329 a year, and that is before we add on more for our neighbours. That is a whopping uplift by any stretch of the imagination. The face of Horsham district is changing at breakneck pace. Villages such as Billingshurst and Southwater are on the way to doubling in size in less than a decade. That is not because Horsham is experiencing some kind of spectacularly large birth rate; it is just an arbitrary calculation.

Once again, to be clear, I wholly accept that this is a national problem and that we need national solutions. Every area, including Horsham, has its role to play, but it is insulting people’s intelligence to describe that as a local need, when we plainly have nowhere near enough locals to go around, and they mostly cannot afford the new homes anyway. If we keep telling obvious lies to people, how will we ever win public consent? This brings me to the next big failure of the standard method, which is that there is no meaningful public scrutiny. Most local councillors do not understand how it works, sadly, let alone the general public. The standard method is never an election issue, yet it has a massive impact on our communities. In this case, ignorance is not bliss. It is a big reason why Conservative councillors have, election after election, proclaimed their commitment to allocating brownfield sites over greenfield yet somehow ended up doing the exact opposite. They cannot do anything to stop the logic of their own inflexible system. The standard method is a kind of mathematical bulldozer, sweeping aside our open spaces.

The single worst failing of the standard method is that it fails in the very purpose that it was supposed to be designed for. In Horsham, as in many areas, the average price of a new house is higher than that of our existing stock. Ironically, the more houses we build, the worse our affordability ratio gets, and the higher our target will be next time around. The standard method does the exact opposite of what it is supposed to do. The more housing that is built, the more the method asks to be built, with no obvious mathematical limit.

I stress again that I completely agree that building many more houses than we have over the last 40 years is an essential step on the path to affordability. However an obsession with one arbitrary number, without thinking what goes into it, does not work. It is actually getting in the way of success. We have to focus attention on the type of housing we are permitting, not simply the raw total. The standard method is based on a false premise, because many things affect prices besides the house building rate.

[Andrew George (St Ives) (LD)]

I am very grateful to my hon. Friend for giving way and sorry I missed the first minute of his speech. I warmly congratulate him on the point that he is making. I agree that what he describing is a false premise, in the same way that the targets themselves are based on a delusion. The delusion is that private developers would be prepared to collude with Government to drive down the price of their final products in order to deliver affordable homes. That clearly is not the case. The combination of these two things is working against what the Government are trying to achieve, which is to meet housing need.

[John Milne]

I thank my hon. Friend, who makes a very good point. The system is working almost to the reverse of what was intended.

In my constituency of Horsham many people either work for London businesses or perhaps have traded down from a more expensive London property. From their point of view, Horsham represents excellent value. The official affordability ratio does not reflect real working conditions in Horsham for locals, and therefore overstates local targets.

Local councillors all strive to get the best for their communities, but the way we receive targets under the standard method destroys our negotiating position with developers. Developers are not stupid. They can work out as well as anyone else how many sites are needed to meet our targets. They have no need to concede on civil amenities or on affordable housing because they know that, at the end of the day, they have got the council over a barrel.

I have no issue with a private developer seeking to make a profit—what else do we expect them to do?—but do not rely on them to do social planning. In areas like Horsham, years of free market ideology have turned councils into mere editors of private developer proposals. We build on greenfield sites because they are the only ones that get presented. There is literally nothing else to choose from in Horsham. The free market approach to affordability does not work for the housing market. Competition has driven prices up, not down. In Horsham we would arguably be better off if we granted a monopoly to one single developer and let them push down local land prices.

To add insult to injury, we also have the standard method’s bullying friend, the housing delivery test. I am not sure whether there ever was a carrot in this process, but the HDT is definitely the stick. Failure to meet targets can ultimately result in losing local control over planning altogether. It is a Catch-22 situation: the developer controls the rate of delivery, but the council pays the price if targets slip. Heads they win, tails we lose.

In fact, the single biggest factor that influences prices has nothing to do with house building. It is availability of credit. If interest rates were to double tomorrow, the price of a mortgage would soar and we would see a house price crash, yet all that would happen without a single new home being built. A succession of policies under the Conservatives only served to make the problem worse, not better. Subsidies such as Help to Buy or stamp duty holidays simply inflated prices further, like a giant Ponzi scheme. The market adjusts, and the subsidy ends up in the pockets of developers until the next upward turn in the spiral.

Therefore, any analysis of UK house building must take into account the key role of finance. Since Thatcher, houses have come to be seen not simply as homes but as investments. In line with that, the explosion of the buy-to-let market in the 1990s correlates suspiciously closely with overall house price inflation. Older generations benefited from decades of property asset inflation, but today it is getting harder and harder to board that train. Putting all that together, it is clear that the standard method is getting its social sums all wrong.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

I congratulate the hon. Gentleman on securing this very important debate. He mentioned some of the incentives for first-time buyers. Through the stamp duty discounts, we saved the typical first-time buyer around £6,000 on their purchase, which helped about 640,000 young people get on to the housing market. Is he saying that he is not interested in that and that it was the wrong thing to do to help those first-time buyers on to the housing ladder?

[John Milne]

For the individuals who benefit, no one can argue with it. It is the same with the sale of a council house—if you are the family that gets it, it has clearly given you a massive uplift. What I am saying is that we have a national societal problem to solve in the housing market in general. We have a certain amount of money to put towards it. That was a subsidy. There are far better things to do with that subsidy that do not inflate prices further, as that simply eats up the subsidy.

As I was saying, putting all that together, it is clear that the standard method is getting its social sums wrong. The affordability ratio is actually a lousy proxy for actual housing need. What we need to do is factor a proper analysis of local housing conditions back into the system. That should include an assessment of local homelessness rates, the need for social housing, pensioner poverty and all the other factors that make communities tick. We also need to find a clear role for neighbourhood plans. Neighbourhood plans started as a great way to bring local consent and local knowledge into housing, but from the day the standard method was introduced, they have been effectively overruled. In the latest planning reforms, they were completely marginalised and were not even mentioned.

How can we change the standard method to do the job it is supposed to do? I suggest at least two inputs: a local needs calculation, which focuses on helping local people into the homes they need, and a national needs top-up. Having a separate national needs figure will help us to focus on the delivery of new towns. When our housing needs are as great as they are, new towns are essential. In contrast, the standard method spreads targets indiscriminately across every area. It leads to endless incremental add-ons to existing settlements until they begin to lose their identity altogether. In rural areas such as mine, the standard method has an inherent tendency to create low-density suburbs. Not only do they tend to be more expensive houses, but they use two or three times as much land as they strictly need to.

[Martin Wrigley (Newton Abbot) (LD)]

I thank my hon. Friend for securing this valuable debate. Does he agree that, as well as causing the issues he described, incremental building contributes to problems with the sewerage systems? If a developer builds 50 houses here, 50 houses there and 50 houses elsewhere, and each one is considered on its own merit, it does not warrant an upgrade to the sewerage systems, so the water companies do not upgrade, systems become overloaded and we start getting sewage in the water.

[John Milne]

Yes, it makes strategic planning very difficult. Provision of infrastructure, particularly in rural areas, is a major problem and not sufficiently built into the planning system to compensate for it. It is easier in urban centres where the infrastructure is already in place.

This is the reason we have contrived to have perhaps as many as 1.5 million unbuilt permissions nationally, at the same time as a national housing shortage. That is because too many of them are permissions for unaffordable and, therefore, unbuildable homes. There is a degree of land banking but, for the most part, developers build as fast as they can sell. If they are serving only the top end of the market, that will be slowly. As Oliver Letwin described in his excellent 2018 report, sadly unacted on by the Government of the day, we need far greater variety in housing type.

As much as 80% of housebuilding is aimed at the top 20% of the market. The fastest way to fix that is to build a guaranteed quota of social housing. My party is asking for 150,000 a year. I guarantee they would be snapped up like hot cakes, as fast as they could be built. There is a fundamental difference between permissions and actual, physical houses. If all we ever think about is permissions and alleged impediments to permissions, we will never get to grips with the problem. Wrong permissions do not increase supply, they suppress it. Wrong permissions bake high land prices into the system. Handing out more permissions like confetti simply chokes the system with unbuildable sites that will hang over the market for a generation. There are lots of ways the standard method could be reinvented, but any future form must empower local authorities to deliver social housing in significant numbers from day one. How we do that is up for grabs, but somehow it must be done.

[Wera Hobhouse (in the Chair)]

I intend to give the lead Member two minutes at the end of the debate at 3.58 pm. I will call the spokesperson for the Liberal Democrats at 3.28 pm. I will not impose a formal speech limit for the time being. I hope there is time for everybody to come in.

14:47

[Yasmin Qureshi (Bolton South and Walkden) (Lab)]

It is a pleasure to serve under your chairmanship, Mrs Hobhouse. I thank the hon. Member for Horsham (John Milne) for bringing this timely debate for all of us to consider. Before I come to the main thrust of my speech, I should say that it is universally accepted that, irrespective of the Government in power, over the past 20-odd years hardly any housebuilding has happened. The last time there was a proper housebuilding programme in place was in the ’70s, ’60s and ’50s. I am going back in time, but it has not happened in a number of years. It does not matter which political party has been in charge.

[Kevin Hollinrake]

I appreciate the hon. Lady’s giving way. By way of correction, during the period of our last 10 years in office, there was an average of 207,000 net new home additions every year, which was higher than in the 1970s.

[Yasmin Qureshi]

I know, but that is still not a sufficient amount. Some of those houses did not come through. There was an amount of housing that needed to be done and was not done. It was done in the ’50s, ’60s and ’70s, which cannot be denied. We need to build more homes, including more affordable and social homes. This is an important debate because it asks Government and builders to look at how to assess local housing need.

In Bolton, more than 20,000 individuals are on the social housing waiting list. Families face an 18-month wait for a three-bedroom house, with 800 to 900 applicants for each available home. Many are referred to the private sector, where of course the rents are very high, increasing the financial strain on already struggling households.

The current methodology for assessing local housing need fails to capture the realities on the ground. It overlooks income disparities across our country, the availability of affordable housing and the specific needs of our communities. That disconnect results in inadequate housing provision, leaving many without suitable options. There are homes out there that could be used to reduce housing waiting lists, but they need substantial work to bring them up to standard.

In my constituency recently, I hosted a roundtable with housing providers as well as homelessness charities, and one of the things that they asked for was a ringfenced fund to help social housing providers to make their stock fit for purpose, release more housing and give more people the homes that they desperately need. In the private rented sector, what is called affordable housing is often not affordable, because many of my constituents are on the minimum wage or living wage and they are not able to afford homes that people in the south or in other parts of the country might think are reasonably affordable. They are not affordable for those living in Bolton and the surrounding areas, because “affordability” is based on market prices, not what people are earning locally. It is all about the central, national figure, whereas we should be looking at local wages and what is affordable to people there, as opposed to somebody in a more prosperous part of the country. Of course, the current system also allows landlords to charge higher rents and make profits because they are taking advantage of the fact that the need for homes is greater than the availability.

We have to understand that housing is not merely about shelter; it is about dignity, stability and opportunity. It is not a coincidence that often the people we find in the criminal justice system have come from an economically and socially deprived background, and housing is a big part of that. We saw during the covid time that in poorer areas, where many people live in one house, there was a higher rate of covid being spread among them as opposed to people who lived in large houses, where they could properly and safely quarantine themselves. In a lot of the smaller houses where many people were living, they were not able to do so.

There are a lot of reasons why a decent home is important for everyone. What I ask is that we all work collaboratively, and certainly I try hard to ensure that individuals and families in Bolton South and Walkden have access to safe, affordable and appropriate housing. I therefore welcome the Government’s plan to create 1.5 million homes. I wish them luck and hope they will be able to achieve that. It is a welcome—[Interruption.] The hon. Member for Thirsk and Malton may laugh, but at least it is an initiative. It is a great initiative, a great thing to work towards, a great aim to have, because if we do get there, that should hopefully alleviate a lot of the challenges.

I wish the Government great luck on this and hope it will happen. In the meantime, could we have some additional funding, especially for social housing?

14:53

[Damian Hinds (East Hampshire) (Con)]

Mrs Hobhouse, it is a great pleasure to see you in the Chair—I think, in my case, for the first time. I congratulate the hon. Member for Horsham (John Milne) on securing the debate and bringing us together to discuss this important matter.

It is very good to see this Minister in his place. I thank him and his Ministry of Housing, Communities and Local Government colleagues for their engagement on these issues. I have been in this place on more than one occasion to talk about related issues, including about how national parks work relative to local authority planning areas. I am grateful to his colleague the Minister for Housing and Planning for also meeting me separately as well as corresponding. Today, I am going to talk not about those issues, but about the algorithm overall and how it works and, in particular, about the affordability ratio and how it works—or, more correctly, does not work.

We know that the Government are looking for a big uplift—a 50% increase—in the number of housing completions, but in areas such as mine in Horsham, the increase is much greater than that. In my local planning area the target is up from 575—already a pretty punchy annual target—to more than 1,100, which is effectively a doubling. It is not a north/south thing, it is a rural/urban thing. Rural areas throughout the country have some of the biggest increases, such as in the rural far north-west and far north-east. There have been really big increases in the target, and at the same time major conurbations are seeing much lower increases in their numbers—typically 16% or 17%. Some places, including parts of London and Birmingham, are actually seeing the numbers go down at a time when we are trying to build many more homes. Sometimes it is thought that this is correcting a historical imbalance—that homes have not been built in the countryside for all these years—but that is not the case. Proportionately over the last couple of decades, in the rate of additions of homes per 1,000 existing dwellings, the predominantly rural areas have seen a greater build-out rate than predominantly urban areas.

I do understand that the Government need a formula—the 0.8% of housing stock multiplied by the five-year average affordability ratio, minus five, divided by five, multiplied by 0.95, plus one. It looks okay. Trust me: it looks logical if we break it down, but the truth is that in practice, it is not working. It is not delivering what all of us want to see, or what the Government want to see, which is a material, sustainable increase in housing stock in the places where people need it.

The affordability formula matters so much more now because of that 0.95. It used to be 0.6, but since it has gone up, it has made the affordability ratio do that much more work. There are multiple aspects to query, such as whether to use workplace-based earnings or residency-based earnings. I think both of those things are relevant, and a comprehensive formula would probably use both. Whether earnings or income is used makes a difference, because it means capturing only the working population or the retired population as well. Crucially, the formula lumps all types of housing together, so it does not distinguish between the cost of a starter home and a two-bedroom flat, a one-bedroom flat or a three-bedroom house in these different places.

Echoing what we heard from the hon. Member for Horsham, I have lots of people coming to my surgery who are unable to afford a home; probably everybody in this room has lots of people coming to their surgery in the same position. Some of those people are looking for social housing and there is a shortage of that, but when most people come to our surgeries and talk about the unaffordability of homes, they mean the affordability of a home they can buy—a decision that, I am guessing, most of us made at some point in our 30s or 40s. However, many more homes get built every year and I still get the same number of people coming to my surgery saying that they cannot afford to get on the housing ladder.

We want there to be more affordable homes in both senses, both the public sector sense, in what I call “capital A” affordable—social rent, part-ownership and all that—and for young couples and young families to be able to buy a home and invest in their security and that of their children. But the problem is that, other things being equal, the best returns for developers are on larger, five-bedroom or four-bedroom executive homes in large plots of land outside of town centres, which are very aspirational homes for people to buy. Although there is nothing wrong with that, it does not address the needs of the people coming to our surgeries saying that they cannot afford to get on the housing ladder. Therefore, because we have high unaffordability ratios, we get lots more houses being built but they tend to be five-bedroom, four-bedroom executive homes disproportionately. That makes the area even more unaffordable on average, because the average price of a new build house is greater than the median price of the existing housing stock, so over time the formula ratchets up the price. It just says, “However many more homes you build, you will need to build more and more.” Honestly—there is no mathematical logic to it. We should be trying to address the actual need.

I ask Ministers to look again at the formula, not to get rid of it but to change it. Development targets must be sustainable and reasonable in different areas of the country, and crucially they must target the addition of homes that people can afford to buy, so that over time affordability ratios improve.

14:59

[Chris Vince (Harlow) (Lab/Co-op)]

Thank you for your chairship, Mrs Hobhouse. I thank the hon. Member for Horsham (John Milne) for securing the debate. I intend to keep my remarks relatively short. I want to make it clear from the outset that I am speaking not to score political points or to point a finger, but to share my experience, which I hope will be useful.

I recognise the immense challenges that local authorities, such as mine in Harlow, face. Only yesterday, housing officers, led by the wonderful Cara Stephens, supported a number of families forced to leave their homes because of fire safety concerns. The challenge is partly caused by a lack of social housing.

Before I came to this place, as well as being a local councillor, I spent two years working for a homeless charity in Harlow called Streets2Homes, so I saw the challenge from both sides. Like the hon. Member for Horsham, I saw the reliance on the private rented sector. I have raised this issue a number of times, not because I think the previous Government had any malicious intent—absolutely not—but because when they raised the housing allowance of universal credit, it led to the private sector in Harlow raising rents, which ultimately meant that the state spent more money on benefits and it just went into landlords’ pockets. I ask the Minister to consider that point.

Streets2Homes had the resource to do what local authorities often cannot: sit down with those making homeless applications and really get to the root of the problem. Clients often said to me that during the process of applying for council housing, they felt dehumanised. The lack of council housing meant that it often became a tick-box exercise for housing officers. I recognise why that is the case, but for the person applying for housing—if they face homelessness, they may be suffering a huge amount of anxiety and mental health issues—it was not suitable.

On the substantive point that the hon. Member for Horsham made about housing need and local allocation, there is cross-party agreement about the need to build council and social housing in Harlow, although there is a limit to the amount of housing we can provide. I often say that Harlow is a very small district, and it is very much built up to its borders, so would the Minister comment on how local government reorganisation will potentially impact that? I have regular conversations with the Conservative leader of Harlow council, and we both agree that we need to build housing, but Harlow is limited in where it can be.

The new standard method includes consideration of the affordability ratio and average wages. I enjoyed the maths equation from the right hon. Member for East Hampshire (Damian Hinds)—as he knows, maths is one of my favourite things to talk about. Will the Minister touch on how the method will help constituencies such as mine?

I am concerned that the increase in the cost of private sector renting means that more and more people are reliant on social housing, so there is even greater need. I did not agree with the local authority’s decision to remove band 4. In Harlow, when there is an application for a council house or a homeless application, there are four bands: 1 to 4. The administration decided to remove band 4, which I opposed, mainly because I think it just pretends that the issue does not exist. There is a need for social housing, given the increase in the cost of the private rented sector.

Permitted development, which was a quick fix by the previous Government, has had a huge impact in Harlow. I echo the points that the hon. Member for Horsham made about housing conditions. He is right to champion new towns. Harlow is a fantastic new town—I am obviously proud to represent it, and I am proud of its sense of community—but one of the issues that new towns face is that things were built at the same time, so the houses need repair and wear out, almost, at the same time. I will never again defend anything that Margaret Thatcher did, but one thing I will say about the right to buy is that it allows housing stock to go into private ownership, so that repair is not then an issue for the council. However, my issue with right to buy is that it did not replace the stock and led in part to the issue we have now.

The other issue that Harlow faces—I am just throwing them all at the Minister now—is land banking. I take the hon. Member’s point about there not necessarily being a desire to land bank, although I think there is an element of that in Harlow. Finally—I said I would not speak for very long and I have managed six minutes, so apologies for that, Mrs Hobhouse—the housing crisis is without doubt one of the biggest crises this country faces. I absolutely welcome the Government’s attempt to tackle it, and I will do everything I can to support them to do so, because I have seen at first hand the impact that a lack of housing has on my community.

15:06

[Edward Morello (West Dorset) (LD)]

It is a pleasure to serve under your chairship, Mrs Hobhouse, and I congratulate my hon. Friend the Member for Horsham (John Milne) on securing this important debate.

In West Dorset we face growing housing challenges. Young families are struggling to find homes in villages where they were raised, key workers cannot afford to live close to their jobs, and older residents wanting to downsize find too few suitable options. We need more homes, but they must be affordable, well designed and rooted in the needs of the people who live in them. For the record, our landscape is—in my totally unbiased opinion—the most beautiful in the country, with over 70% of West Dorset falling within the protected national landscape, or area of outstanding natural beauty, as it was formerly known. It is a landscape at the heart of our £320 million tourism economy. Housing policy must reflect the balance we need to strike between delivering homes for our residents and protecting the places that define our communities.

Building more homes must not mean building the wrong homes in the wrong places. The standard method for assessing local housing need currently fails to reflect the complex reality of rural communities such as West Dorset. Rigid housing targets, imposed without flexibility or enough local insight, risk forcing inappropriate developments on these precious areas, undermining the very qualities that sustain our economy and our environment. We need a system that empowers local authorities to deliver the right homes in the right places and with the right infrastructure.

In West Dorset, 78% of homes are under-occupied, with nearly 46% having two or more surplus bedrooms. It is not a crisis of space; it is a crisis of sustainability. Nearly half our population is over 55, and many older residents are living in homes that are simply too large for their needs and are unable to downsize while staying in the communities that they love, while young families are priced out of moving in, or moving back to the communities where they grew up.

It is not just about numbers; every home must come with the infrastructure it needs. Too often, developments in our area go ahead without the GPs, schools, dentists and roads needed to support them, let alone the sewerage system. In West Dorset, our sewerage infrastructure is outdated and overwhelmed. Last year alone, we saw 4,200 sewage spills. It is an environmental and public health disgrace, yet water companies are still not statutory consultees when housing need is assessed or developments are approved. This must change. If the Government are serious about protecting our environment while building new homes, they must require water companies to be involved from the outset, to ensure that the infrastructure can cope and that new homes do not just add to an already failing system.

In constituencies such as mine, many homes sit empty for most of the year, driving up prices and hollowing out our towns and villages. We must give councils the tools to tackle this through planning powers and council tax premiums, and by properly assessing the impact of holiday lets and second homes when calculating housing need. The Liberal Democrats believe that this should be a local authority-driven process. Councils know their areas best. They should have the powers to set planning fees, buy land at fair prices and shape the future of their communities. Development should be community led, not developer led.

If the Government want to build 1.5 million homes, which are sorely needed, then we must reform the standard method so that it reflects reality. Let us give local councils the tools and flexibility to deliver the homes and residents they need in ways that infrastructure and environment can support, as well as taking occupancy rates into account, in order to identify the needs of people to downsize and stay in their communities, and also make water companies statutory consultees, because we cannot build a sustainable future on crumbling foundations. West Dorset does not need imposed numbers. It needs good, affordable homes that work for local people, protect the land and restore trust in the system.

15:10

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to serve under your chairship, Mrs Hobhouse. I thank the hon. Member for Horsham (John Milne) for setting the scene so well. I always bring a Northern Ireland perspective to the debate.

[Hon. Members]

Hear, hear.

[Jim Shannon]

It is good that we understand the importance of these issues. The Minister is a regular visitor to Northern Ireland and as he engages with relevant Ministers there, as he always does, he will be asking these questions and talking about the matter. I look forward to his response.

The hon. Member for Horsham set the scene well. I am flabbergasted to hear from the hon. Member for West Dorset (Edward Morello) that the water companies do not play a role in planning. In Northern Ireland, there cannot be any planning application without contacting Northern Ireland Water. It is important to have the input of a major facility that looks after sewerage and storm water and that will set out the systems for any development. I understand the Liberal Democrats will possibly table an amendment to the Planning and Infrastructure Bill on that and it would be great if Government accepted it. That would be the easy way of doing it. I am sure when they listen hard to what others say, they will understand that is the way forward.

I have heard the comments made by the hon. Member for Horsham on the issues surrounding local house prices and the comparison to the cost of living and people’s wages. In my constituency of Strangford, and specifically within the Ards and the North Down borough, new house builds are more expensive than current housing stock, causing higher targets to be set and ultimately limiting affordability for people to buy. The University of Ulster has stated that the average house price in Ards, Strangford and North Down as of 2022 was £221,000. The Northern Ireland average was £200,000, so we are already above the norm in my constituency. That was three years ago, so it will be even higher now.

The banks of mum and dad and of grandpa and grandma are so important to many young people. I am not better than anyone else and never profess to be, but we will help our children achieve their home goals. Where there is the ability to do so, it is important to do it and help them get on the first rung on the ladder. The thing is that not everybody can do that, and that is why it is important that Government have an input into the process.

In late May 2024, it was announced that 100,000 private and social homes would need to be built over the next 15 years, so by 2039. One third of those, about 33,000, will be social homes. It is so important to have social homes in place and to have availability of social housing stock for those who cannot buy their homes and get on the first rung of the ladder. To look realistically at waiting lists, nearly 48,000 households are on the waiting list for a social home and about 36,000 of those are in housing stress, meaning that they are in priority need. In the social sector there is a huge need for additional homes and there is clearly a disjoint between the need for homes and the allocation by which people can get one.

One of the biggest issues I had as a councillor back when I was first elected in 1985 was housing. Housing matters took priority. It is probably more about benefits now than it is about housing, but at that time it made me very aware of the need for those who wished to have social housing. Again, I am not better than anyone else but I have always pushed for extra social housing in my constituency. We will have a fairly major development in the Castlebawn site in Newtownards, which is a brown site that will have about 120 social housing units of all sorts—for disabled people, families and elderly people, and there will some flats in there as well. It will be a mix of all that is needed in the Ards area. It will only scrape at the surface, as we need many more.

I have been proactive in ensuring that social housing units become the norm. Yet it seems we see the housing reality focused on new developments that range between £200,000 and £250,000 to purchase, which is not within everybody’s pocket. For the majority, it is simply not doable. That is not to mention the need for social housing accommodation due to the extortion that is the private rental sector. Again, remembering that the wages in Northern Ireland are lower than they are on the mainland, rental accommodation in Newtownards is between £750 and £1,000 a month for a two-bed property. In many cases it is completely out of touch with the issues that need to be dealt with.

I will conclude, Mrs Hobhouse, as I know others wish to speak. I am grateful to the hon. Member for Horsham for raising these issues. They are applicable to all our constituents across this great United Kingdom of Great Britain and Northern Ireland in one way or another. There is hope that over time we can do better to look at the issues on the ground as opposed to the overall targets in figures.

I wish the Government well; it is churlish of anybody not to wish the Government well with the 1.5 million or 1.4 million new houses that they wish to build. It helps the economy and provides housing opportunities for those who can purchase them and for those in need of social housing. At the same time, more must be done in engagement with the devolved Administrations to tackle the issues. I am very keen to see the Minister engage with and speak to those in the Northern Ireland Assembly, in particular to the Minister responsible, to see how we can learn from each other. These great nations can learn from each other: the Scots, Welsh, Northern Irish and English. We are better together. The Scots Nats are here together, so they cannot object to that. We can learn from each other and do better as a result.

15:15

[Jess Brown-Fuller (Chichester) (LD)]

It is a pleasure to serve under your chairmanship, Mrs Hobhouse, for the first time, I think. I congratulate my hon. Friend the Member for Horsham (John Milne) on securing this vital debate. My constituency of Chichester has been grappling with serious housing challenges, which have been continually worsened by a deeply flawed planning process. The demand for social housing vastly outstrips supply. Private rentals are prohibitively expensive, and sky-rocketing house prices have made home ownership increasingly out of reach for those who have grown up in my constituency.

Housing developments should enhance our communities, delivering affordable, sustainable homes alongside essential infrastructure, but the current approach does the opposite. The standard method for assessing housing need imposes arbitrary national targets on local authorities, which ignore the specific needs and constraints of each area. It fails to deliver genuinely affordable homes and does little to reflect local demand or geography. As my hon. Friend highlighted, the standard method fails to address above-inflation house price rises. Our average house price in Chichester, according to the Office for National Statistics, is £454,000. In just one year, to February 2025, the price of a semi-detached house in Chichester rose by 8.1%, yet Chichester has seen huge-scale development in recent years. Meanwhile, the average salary in my constituency is under £30,000, which is below the UK median.

When new homes are delivered, they often enter the market at prices higher than the local median, as the right hon. Member for East Hampshire (Damian Hinds) mentioned. That artificially inflates the affordability ratio, which then increases future housing targets, creating a vicious cycle that drives prices even further out of reach. It does nothing to address the real challenges that my constituents face in getting on the housing ladder. Instead, it leaves new developments affordable only to those who are moving into the area, not those already living there. At the same time, councils face an uphill battle in trying to ensure that developments, required by the same standard method, include adequate levels of social and affordable housing.

At present, we have over 2,000 families on the wait list for social homes in Chichester. Any development of 11 homes or more is expected to provide at least 10% as affordable housing. Both Chichester and Arun district councils, which sit within my constituency, request 30% social and affordable housing in their local plans to address some of the unmet need locally, but those targets are continuously undermined by viability assessments submitted by the developers, because of the high land prices in our constituency.

A recent example is a 2,200 home development to the west of Bersted, approved by Arun district council on the basis that it was included in the Conservative local plan from 2022. There is strong opposition in the community to the proposal, not only because those homes will add to the strain on local infrastructure, but because only 10% of those homes will be “affordable”. The very definition of affordable is fundamentally flawed when even 80% of unaffordable is still unaffordable for so many people. The developer claimed that a higher proportion of social and affordable homes on the site would have made the project commercially unviable, so the council was left with no power to enforce its requested levels of social and affordable houses.

That is why I was pleased that my hon. Friend the Member for Taunton and Wellington (Gideon Amos) tabled an amendment to the Planning and Infrastructure Bill, calling on the Government to adopt a separate social housing target. I am sure that would be welcomed by local authorities up and down the UK, because they are best placed to know what their communities need, not the developers that are trying to build in them.

The standard method also fundamentally fails to consider any geographical constraints, which ties the hands of councils during land allocation. In my area, 70% of Chichester district is covered by national park, with an additional 5% designated as national landscape at Chichester harbour. That means that our ambitious housing target, which has doubled under the Labour Government, must be met within just 25% of available land, yet the housing target remains unadjusted.

We need a method for assessing local housing that actually works for communities—one that recognises local constraints, delivers genuinely affordable housing, protects the national landscape and ensures that every development contributes positively to the places that we call home. This will not change until the top-down approach of the standard method for assessing local housing need is reformed to genuinely reflect community need, and until local authorities are given the power to challenge and regulate developers effectively. I beg the Minister to look again at the standard method so that we can truly address the local housing need for areas such as mine in Chichester.

15:21

[Andrew George (St Ives) (LD)]

It is a pleasure to serve under your chairmanship, Mrs Hobhouse. I congratulate my hon. Friend the Member for Horsham (John Milne) not only on securing the debate, but on the very erudite manner in which he took us through the issues and correctly analysed the weaknesses of the system. It is also a pleasure to follow my hon. Friend the Member for Chichester (Jess Brown-Fuller). I note that, before her, the omnipresent hon. Member for Strangford (Jim Shannon) referred to the importance of seeing this across the piece—not only in Scotland, England, Wales and Ireland—but he forgot to mention Cornwall. Well, I will forgive him for that.

My hon. Friend the Member for Horsham recognised the need for a needs assessment, as it is an essential building block to resolving the issues. It is the methodology currently used that is both flawed and inevitably inaccurate, and sometimes leads the process in the wrong direction. I do not think it is ill-conceived in itself; rather, the interrelationship between that and the target-setting process is flawed. The target-setting process ends up with house building targets—we have housing need and then we have the house building targets.

If we were to set targets to reduce need—rather than for developers’ greed, if one were to put it in pejorative terms—we would approach the matter in an entirely different way. Let us take Cornwall—I know it well and I live there. I have also worked there as a professional in the sector as a chief executive of a housing charity delivering affordable homes—during my nine-year sabbatical from this place—so I know how this market works. Over the last 60 years, the housing stock in Cornwall has almost trebled—it is one of the fastest-growing places in the United Kingdom—yet the housing problems of local people have got worse. We cannot necessarily deduce from that fact that building homes is therefore harmful to meeting local housing need; however, the build targets are not in themselves the answer. The answer ought to be setting targets to reduce need, and that can be done if one has a robust method to do it. Not only would that be better for planners, councillors and others who want to meet the local need in their communities, but it means that when applicants come forward with their planning applications, they would have to demonstrate not how many homes they can build towards a target, but how much need they can address by delivering their projects. Although the Government’s aims and policies are laudable, they need to look at the dynamics of how need and their build targets interrelate with each other.

In my intervention, I referred to the delusion—it is a belief adopted by successive Governments of all parties, including, I am sorry to say, our own—that developers will somehow collude with the Government to drive down the price of their final product. My hon. Friend the Member for Chichester referred to the unviability of schemes that cannot be delivered with enough affordable homes, but that is only because of the way in which the methodology is used to permit those developments to go ahead in the first place. Once planning permission is granted, not only does the setting of high targets often create hope value on every piece of land around every community—which starts to make them unaffordable before the planning process has even started—but once the planning process is established, the value of the land becomes so great that the scheme becomes unviable for delivering affordable homes. The whole system is built to fail.

I am afraid to say that we need to look at the methodology for delivery—that is, the building of a new lower rung on the affordable housing ladder of “in perpetuity” intermediate market homes, which needs to have a life of its own. We need to address the problems that a lot of social housing providers have in delivering homes, which is that they are prevented from delivering homes in low house price value areas, and low-income areas, because of the cost-to-value ratio. A lot of people probably do not understand that the places that need the homes most, where the incomes are lowest, are the most difficult to deliver on because of the cost-to-value ratio, which has to apply before providers can go forward with their schemes.

There is a whole set of other methods that could be used to address the issue, but I congratulate my hon. Friend the Member for Horsham on what he has achieved. I hope the Government are listening, because this is a constructive debate. We are not attacking the Government, but urging them to adjust their approach in order to achieve the outcomes we all want to see.

15:27

[Martin Wrigley (Newton Abbot) (LD)]

It is a pleasure to serve under your chairship, Mrs Hobhouse. I congratulate my hon. Friend the Member for Horsham (John Milne) on securing this debate, and hon. Members from across the House on their excellent contributions. I draw attention to my entry in the Register of Members’ Financial Interests; I am still a sitting councillor at Teignbridge district council.

The Liberal Democrats support housing targets, but believe we need to win the case for that housing within the communities we represent, and that enforcing them from Whitehall without community consent will continue to fail to deliver the homes we need. Homes must be built to meet local need and not be driven simply by developers seeking the highest profits. Development has brilliant potential for providing a wealth of opportunities to rural communities, but that can be realised only by genuinely involving those communities in the decisions that affect them. That means the right houses in the right places.

The Liberal Democrats welcome the Government’s decision to make housing a priority, given the desperate number of people denied the basic right to a safe and warm home. The Conservatives’ poor commitment to house building has left 8.5 million people in England with unmet housing need. The Conservatives let developers get away with building housing to poor standards, and without GP practices, schools and community infrastructure, which are badly needed. They also let them off the hook for leaving land for housing unbuilt and new homes empty. We believe everyone has a right to a safe and secure home, but without more support for councils, more people will be left without access to quality and affordable housing. The previous Conservative Government forced councils to do more and more with less and less, plunging many into financial crisis.

Although we have welcomed this Government’s commitment to our call for multi-year funding settlements, with additional pressure on councils to accept national insurance contribution changes, it is essential that they are funded robustly to achieve those aims.

We have been disappointed by the Government’s reluctance to commit to a target for social house building. In addition to an overall target for new homes, the Liberal Democrats would target 150,000 new social homes to tackle the housing shortage and homelessness crisis. We are committed to ensuring that house building does not come at the expense of our environment. The Government should not be either delivering house building or protecting our environment; they can and must do both.

We welcomed the Government’s recent announcement that they are adopting the Liberal Democrat policy and wording mandating all homes to be built with solar panels, in a solar rooftop revolution. We also welcome the measures in the Renters’ Rights Bill to ban no-fault evictions and create a national register of licensed landlords. We believe that these steps are crucial to overcoming the housing crisis. Liberal Democrats have long called for leasehold reform to make house ownership fairer and more accessible—we have been campaigning against leasehold since Lloyd George introduced the people’s Budget.

On the specifics of the standard method, I agree with my hon. Friend the Member for Horsham, who pointed out that it does not and cannot work—as did the right hon. Member for, I believe, the Isle of Wight.

[Damian Hinds]

Well, I have been there, but I represent East Hampshire.

[Martin Wrigley]

My apologies to the right hon. Member.

Since 2018, when the Conservative Government introduced the so-called standard method, which was supposed to calculate housing need, the country has suffered from a top-down, dysfunctional system that fails to prioritise the importance of affordability or the infrastructure necessary to support new development. The constant tinkering, with the introduction and subsequent withdrawal of various failed algorithms, has led to the near paralysis of our planning system. That came on top of the central Government’s starving local planning authorities of the resources they need to function, and the lack of direction as a result of no fewer than 13 changes of Conservative Housing Minister in the nine years from 2015.

It is illiberal, and contrary to the interests of a community-led planning system, to remove options for how to assess housing need from local communities. Although the standard method of assessing housing need is likely to be followed by most authorities, councils with the resources and ability to assess housing need in ways more suited to their areas should be permitted to do so. All housing need assessments are, in any event, subject to the same scrutiny by the Government’s inspectors.

In the district of Teignbridge, in which my Newton Abbot constituency sits, the average house price in 2019 was just under 11 times the average income. After a substantial increase in housing targets due to the standard method calculations, that ratio is going up, and the average house price is now over 11 times the average income. Housing developers build homes only as fast as they can sell them and at the price they need to protect their profit and viability, given the often extortionate prices they have paid for the land. Asking them, via the flawed standard method, to build more to reduce the price is much like asking the owner of a gold mine to increase extraction to a level that reduces the price of gold. It will not happen.

A big part of the solution is to build more council homes, and I am proud to have overseen the resumption of council house building at Teignbridge for the first time in 30 years. I urge the Government to help more councils build more council homes to help more people.

15:33

[Kevin Hollinrake (Thirsk and Malton) (Con)]

It is a pleasure to serve with you in the Chair, Mrs Hobhouse. I thank the hon. Member for Horsham (John Milne) and congratulate him on securing this important debate.

I am afraid this is just another example of the two-tier society that this Government are presiding over. We have had two-tier taxes and two-tier justice and now we have two-tier targets. That is the reality, and it militates against the basic British principle of fairness. I will go through the numbers in a second, but Labour’s own council leaders have called the Minister’s targets unrealistic and impossible to achieve. The leader of West Lancashire council used exactly those words: “impossible and unrealistic”. The targets are unachievable.

I am in no way, shape or form a nimby. Unlike 15 of the Minister’s colleagues in the Cabinet, I have never objected to any developments in my constituency as a Member of Parliament or as a member of the public. I am absolutely on the side of young people who want to get on the housing ladder and those on lower incomes seeking affordable homes. The only way to deliver that is to deliver more homes. I am not against the Minister’s 1.5 million target, but it will be very challenging. We should look at the data: over the last 10 years we were in office, average net housing additions were 207,000 a year. That was the highest level for 50 years—even higher than in the 1970s, because we were knocking down an awful lot of houses back then.

The targets have been driven by the change from assessment of housing formations to a measure of stock already delivered in an area, with a multiplier on top for affordability, but they are totally unfair. London has seen an 11% decrease in its target, Leicester a 32% decrease and Birmingham a 38% decrease. Coventry has seen a 55% decrease in its housing target, yet the neighbouring authority of North Warwickshire has had a 123% increase. That is despite the fact that North Warwickshire, like my right hon. Friend the Member for East Hampshire (Damian Hinds) said of his authority, has over-delivered on its housing targets. Nuneaton, another bordering authority that is over-delivering, has had a 75% increase in its housing target compared with Coventry.

I am trying not to be too parochial but in my neck of the woods, York, which has been under-delivering massively against its housing target for years and years, and had not had a local plan since 1956—it has just got one in place, thank God—has seen a 19% increase, yet neighbouring North Yorkshire, which is my local authority, has had a 199% increase, despite significant over-delivery.

Of Members who have spoken in the debate, my right hon. Friend the Member for East Hampshire has had a 100% increase in his area; the hon. Member for Horsham a 48% increase; the hon. Member for St Ives (Andrew George) a 63% increase; the hon. Member for Chichester (Jess Brown-Fuller) a 72% increase; and the hon. Member for Newton Abbot (Martin Wrigley) a 66% increase. I like the Minister and we get on very well, but his authority in Nottingham has had a 32% decrease. How can that be fair? It is against the basic principle of fairness. Yes, there is a 50% increase in delivery across the board, but why have some targets been decreased and others massively increased? That is simply unfair.

Those are not anecdotal cases. Based on information from the House of Commons Library, across the board, mainly rural areas are seeing an average 71% increase and urban areas an average 15.6% increase. On top of that there is the duty to co-operate and strategic planning, which is likely to see even more houses going into rural areas. There is no justification for that unfairness. It also sits against the principle that the Government say they adopt, as we did, of a brownfield-first approach.

Brownfield development is the least controversial approach, and it is what we would all like to see, but it is complex and costly, particularly in a world of increased costs of delivery. Over the past few years, developers have seen a 40% increase in costs of building. On top of that is the building safety levy, the Building Safety Regulator, biodiversity net gain, the future homes standard, section 106, the community infrastructure levy and the remediation of brownfield sites. Those things, and the Government’s policy on grey belt, will mean that more and more development will be pushed from urban areas into greenfield and green belt.

What the Government are doing with the national planning policy framework cannot be divorced from the Planning and Infrastructure Bill and the Trojan horse that they called grey belt. What they sold to the public as being a few former garage forecourts or wasteland is far from that. It is greenfield and green belt. The Minister cannot shake his head. There used to be protections between villages to stop them merging, and they have gone. There used to be protections to stop villages merging into towns, and they have gone. This is not about grey belt; it is a fundamental change to green belt.

Of course, this is not about targets. It would be pointless to have this debate and just talk about targets—we have to talk about delivery. The 1.5 million homes are a huge ask. The reality is that to hit that target for England, for the rest of this Parliament, delivery will need to hit not 207,000 a year, which we averaged, but 375,000 a year. That is a 180% increase—a doubling.

[Chris Bloore (Redditch) (Lab)]

I congratulate you, Mrs Hobhouse, on your chairmanship and the hon. Member for Horsham (John Milne) on securing the debate, which has been well-mannered and thoughtful on all sides. The hon. Member for Thirsk and Malton (Kevin Hollinrake) is giving a fighting and boisterous speech, but I remind him that we both stood on manifestos that contained numbers of new homes that we would build. In fact, his party’s number was bigger than the Government’s: it was 1.6 million. If we are going to talk about facts and how we deliver these things, let us talk about sense and pragmatism, and not rhetoric, because, unfortunately, what he is saying now is not what he said at the election.

[Kevin Hollinrake]

Good for the hon. Gentleman for reading our manifesto—not enough people did, I am afraid. He is right: we did set a more ambitious target, which I am not against. As I said right at the start, I am in no shape or form a nimby. However, I am for honesty and fairness. The point is that the housing targets have been moved away from certain types of area where people tend to move. They tend to move from rural to urban to take their first job or start their first business, as I did, but the targets are going from urban to rural.

The Minister faces many challenges alongside the huge number he has set himself. The Office for Budget Responsibility and Homes England have said that the number targeted is impossible. Let us see. I wish him well for delivery, although not on the skewed figures that we have discussed today. There are real challenges here, as the Minister knows: things such as the Building Safety Regulator; the skills issue; small and medium-sized enterprises, which build a far smaller proportion of homes than they used to; and making sure that we get first-time buyers on to the housing ladder.

We have tabled a number of amendments to the Planning and Infrastructure Bill that will solve all these problems, and I very much hope that the Minister will look at them. One of them proposes no solar on any best and most versatile land. I am sure that the Minister will look at that, because it would potentially leave space for more British farmland to produce fantastic food. We have also tabled amendments on protected landscapes—my right hon. Friend the Member for East Hampshire has a significant section of protected landscape in his patch, which is bound to constrain supply, but no recognition has been made of that—and on ensuring that there is no plus or minus beyond 20% in any of these targets, which would be fairer. We will also seek to amend the national scheme of delegation, which disgracefully removes votes from councillors, and restore the protections for the green belt. As some in this excellent debate have said, we need a better mix that is more suited to demand in local areas.

I very much hope that the Minister will support those amendments, but, because I feel that he will not, I will make one plea to him: please, look at the Building Safety Regulator. There is a queue of 18,000 homes with planning consent that are waiting six months or more for an answer from the Building Safety Regulator. That is a huge bottleneck in supply. I hope that the Minister will at least touch on that point.

[Wera Hobhouse (in the Chair)]

I know that the Minister has quite a lot of time, but I ask him to leave two minutes for the Member in charge to wind up.

15:44

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

Thank you for that clear direction, Mrs Hobhouse; it is very helpful.

I congratulate the hon. Member for Horsham (John Milne) on securing this important debate and on his leadership. He clearly articulated his concerns on the revised standard method for assessing local housing need. He set us off on a good course: this has been a very strategic debate, which is not always the case with debates about housing. I have a disclaimer that I and colleagues in the Department always read out at this point about our inability to comment on individual matters or individual local plans, but colleagues have not tempted us in that direction. That is very important, and it set the tone for an excellent debate. I will cover many of the points that the hon. Member and others made in the course of the conversation.

The debate has been relatively non-partisan. I think the shadow Secretary of State slightly missed the memo, but I like him as much as he likes me, and I know he does not mean it and that his instinct is always to work constructively. I have no doubt that he and his colleagues will want to do so. At this very minute, colleagues from all parties are upstairs discussing in great detail the Planning and Infrastructure Bill, which will provide us with a vehicle for many important changes. Clearly, there will be lots of debates to come on very important amendments.

Multiple members have said that we are in the middle of a really acute housing crisis. I get out of bed every day, as do my colleagues, because 160,000 children live in temporary accommodation. As mentioned by the spokesperson for the Liberal Democrats, the hon. Member for Newton Abbot (Martin Wrigley), that is the tip of the iceberg of the multiple millions who are under-housed and, as my hon. Friend the Member for Bolton South and Walkden (Yasmin Qureshi) said, their housing and under-housing has profound impacts on their opportunities and life chances. That has been in the spirit of this debate. We made that signature commitment at the election to build 1.5 million new homes over this Parliament exactly for those people, because they need decent housing to build decent lives and decent communities.

Home ownership is out of reach for too many. Too few homes have been built, and too few are genuinely affordable. The hon. Member for Strangford (Jim Shannon) talked about the bank of mum and dad—that ever-present and indeed growing feature that now seems inevitable for people of my generation or those who are perhaps are a bit younger, but was not a feature of my mother’s generation. That is such an important issue of social justice. We must build more homes, and they must be in places where people want to live and work. The planning system has to underpin that, but as the hon. Member for Horsham said, the history of that is chequered. Indeed, as the hon. Member for St Ives (Andrew George) said, we have all had our stake in that. I certainly approach this in the spirit of humility. We want to get this right.

I will now turn to the work of the previous Government. We must have a method that is clear and transparent. The right hon. Member for East Hampshire (Damian Hinds) talked about what it looks like in detail. At least it is there in detail for people to say, “I don’t like this element of it. I think this is weighted wrongly”. It is clear, it is transparent, it is there, and it produces the numbers. That is the basis for plan-making. I do not want to make a political point out of this, because the right hon. Gentleman is proud of the previous Government’s record on housing, but we have had a little test of the alternative in the final year of the last Parliament, and there was a sense that targets were out the window. I do not think that was a very effective decision, and the impact on housing starts is a matter of public record.

I do not think we have heard much of an argument for not having a method at all, but without one, the situation tends towards stasis. That is why last December, following consultation, we implemented a revised method that is aligned with our ambition of a million and a half new homes over this Parliament. There is one point that I cannot agree with the hon. Member for Horsham about, although I appreciate that it may well be a separate debate: I do not think we can decouple the national target and the local target. If the local target does not meet the national target or the national target does not tally with the local target, there will be disconnect and frustration.

This target and this method point us towards 370,000 homes. The formula incorporates a baseline of local housing stock and is adjusted upwards to reflect affordability pressures. Areas where unaffordability is most acute see the largest adjustment. We think that supply is an issue here alongside demand—I disagree slightly with a couple of colleagues on that point. However, I think it is really important for those watching to hear this stated from the Front Bench: this method does not exist in a vacuum. It is the underpinning of the development of local plans, which have been and will be the cornerstone of our planning system. The plans take into account all the development needs of a local area, including affordable housing.

I appreciate the point made by the hon. Member for Chichester (Jess Brown-Fuller) about the challenges facing her local authority in ensuring that its plan holds, but the fact that it has that 30% target is a sign that local authorities can put on record the nature of housing that they want in their communities. Notwithstanding the point made by the hon. Member for St Ives, if it is an arm wrestle with developers, it has that guiding document at least to halt it, because we know that the alternative is a lack of planning that exposes communities. They make up the bedrock, and we want all communities to have one. York is always a prime example—I am overjoyed that York has got to that point after more than six decades. That community is better protected in terms of development, and it will also deliver more effective development. It is a win for all.

I cannot concede the point made by the hon. Member for Horsham that councillors do not know enough; I think that they do. There is a point about local authority resourcing and planning, and we made that commitment at the previous Budget. We want councillors to have the skills to feel empowered, but crucially, as the hon. Gentleman said, local communities also need to feel empowered. I cannot agree that housing and development is not an election issue; I think that it is. The 1.5 million homes target was very much a feature of what we said at the general election. I want to empower local authorities and people to have their say on plans, because they are a bedrock. If they want development that is sustainable, of the right type and in the right place, perhaps on brownfield sites, the local plan is the route to that. It means engaging with it in a way that goes beyond the questions of, “Should there be development? Is our development target too high?” We need to get to, “Where is it going to happen? What type does it need to be?” That is, I believe, the way to deliver the development that they want.

A number of colleagues, including the hon. Member for West Dorset (Edward Morello), have mentioned local circumstances. Indeed, last week, he and I were talking about West Dorset in the context of having the right parking in the right places. Things like that are facilitators and enablers of place. The standard method is a starting point to inform the preparation of local plans. Once local need has been assessed, authorities can establish the number of new homes that are to be provided in the area. That takes into account evidence showing what land is available and any constraints on development—for example, those relating to national landscapes, areas at risk of flooding and other relevant matters.

That approach recognises that some areas—as, I think, the right hon. Member for East Hampshire said—will not be able to deliver the figure provided by the standard method. If they can justify that fully in their local plan during examination by an independent inspector, they can make that case. However, of course, they must only adopt a plan that is legally compliant and sound. It must be consistent with national policy, supported by evidence, and we want the views of local people to be taken into account.

A point was also made about brownfield sites. We want local authorities to make sure that they maximise those sites, and I think local authorities want to do that too. We also want them to be sensible about where they review green-belt land. I think there are different types of land within the green belt. The right hon. Member for East Hampshire characterised it as a Trojan horse; that is not our intent. Who is best placed to make that assessment? It is, of course, the local authorities, by leaning into it. The right hon. Gentleman made an interesting point, as did the hon. Member for Thirsk and Malton, about whether it is a question of urban versus rural. I do not think that that is the case. Hon. Members will see in our approach to growth in city regions the importance of those regions to the economy; they are places where people want to live, or where people cannot currently access housing.

As the Minister for town centres, I can say that we are enthusiastic in the Department about communities taking control of their town centres, notwithstanding challenges about permitting development. In future, town centres will not be purely retail; the mix will be retail, leisure and, of course, there will also be a need for accommodation. That mix should be locally owned. In his opening speech, the hon. Member for Horsham mentioned new towns. It will not be a case of: is it urban, rural or new town? It is going to be everywhere; the mix will be a bit of everything. Similarly, it will involve big builders and SMEs. The hon. Member for Thirsk and Malton shares my enthusiasm for getting SMEs building. It is going to be the entire mix.

I am conscious of time, but I want to address the points made by the hon. Member for West Dorset and the hon. Member for Strangford (Jim Shannon) about water and local housing. Of course, water is important. National policy is clear that housing must have water infrastructure. There are clear expectations that local authorities should work with each other and the infrastructure providers to ensure that housing has that infrastructure. I think that, in general, they are doing that and ensuring that the water supply is sustainable. The companies have a statutory duty to provide new water and sewerage connections. I appreciate that the subject needs to be seen in the round, but that goes back to the need to have an effective, comprehensive local plan, which local authorities can use as their guiding document. They can then say to the water companies, “We do not want you to look at 50 houses at a time; we want you to see it in the round.” That is the sort of leadership that we want.

There are larger issues that colleagues have raised frequently. I would be stretching the scope of this debate if I talked about the behaviour of those who manage water, but we could have a whole new debate on it. Of course, there is an independent review ongoing on the regulation of the water sector for the UK and Welsh Governments. I assure the hon. Member for Strangford, as I often do, that we are very active in talking to the Northern Ireland Executive on a variety of issues, particularly on building safety. I always talk to my counterparts in Scotland, Wales and Northern Ireland about their approaches.

On strategic planning, this is a chance to have a higher level but still localised view of the best sites, working and collaborating with local planning authorities. That is an exciting innovation. My hon. Friend the Member for Harlow (Chris Vince) asked how that will butt up against local government reorganisation. Of course, those partners will be part of that, but there will still be a local planning authority so that people can submit their views on a local plan.

My hon. Friend the Member for Harlow, the hon. Members for Chichester and for Horsham and my hon. Friend the Member for Bolton South and Walkden (Yasmin Qureshi) talked about affordable and social housing. There can be no doubt about the commitment of this Government and the Deputy Prime Minister to social housing, genuinely affordable homes and homes for social rent. We have already put our money where our mouth is by committing £800 million in-year for the affordable homes programme, and a further £2 billion injection at the 2025 spring statement. Alongside that, there are new flexibilities for councils and housing associations within the AHP and in how they use right to buy.

[Luke Myer (Middlesbrough South and East Cleveland) (Lab)]

I commend the Government on their work to change the local connection rules to ensure that veterans can access social housing. In our region, the local authority has come in off the back of that and given veterans the highest priority banding for social housing. Will the Minister take a moment to commend our local council for that reform, which comes off the back of the work that the Government are doing?

[Alex Norris]

That excellent innovation by the local authority reflects one of the needs that the public want to see met.

In my final minute, I want to address the point that the hon. Member for Thirsk and Malton made about the Building Safety Regulator. It is right that we have a regulatory framework in place; we have seen the consequence of not having one. It has to protect people but also enable building. There is a moral imperative to ensuring that people are safe in their homes, but also to ensuring that people have homes. The BSR is a relatively new regulator—it has only been in place for a couple of years—and obviously the Building Safety Act 2022 is a relatively new part of the scene.

We are working very closely with the BSR to ensure that its operational processes are as effective as possible. Where that is a challenge, we have made more money available. I speak with the industry about that in great detail, as I am sure the hon. Member for Thirsk and Malton does, so he will know the conversations that we are having. I totally accept that we need to ensure that the BSR is working effectively, because it is a really important part of having a safe system.

I reiterate our determination to build the homes that the country needs. Through the standard method, we have the right tool to get to 1.5 million homes. In that context, local people will have the leadership they need to deliver what that looks like locally.

15:58

[John Milne]

I thank the Minister for his reply and all Members for their very interesting contributions. One thing that is really striking is that we see the same problem up and down the land. It may manifest itself locally, but it is a national problem.

Like many Members of this Parliament, I come from a local council background—I was the cabinet member for planning in Horsham district council—so I have personal experience of trying to get what we needed for the community out of the plan and developers. It was a battle. My reaction to the changes made to the standard method and to the Planning and Infrastructure Bill, which is currently in Committee, is to say, “Would that have given me the tools I needed to do the job? Would it have improved my chances?” I feel that the answer is, “Not really, no.” That is the standard by which I judge it.

Changes to the standard method could really enhance—make or break, actually—what the Government are doing in the Planning and Infrastructure Bill. It is not just a technicality on the side, but a crucial interface. I realise that the Minister will be a bit distracted, given that the Bill is going through Parliament right now, but I hope that in the fulness of time he will take a closer look at the measure, because it can be revised at any point and does not require legislation. I again thank everybody for a very good-natured debate.

Question put and agreed to.

Resolved,

That this House has considered reform of the standard method for assessing local housing need.