Affordable Housing

Baroness Warwick of Undercliffe Excerpts

Thursday 25th October 2018 Lords Chamber

[Baroness Warwick of Undercliffe (Lab)]

My Lords, I congratulate the noble Lord, Lord Shipley; his debate could not be more timely. I declare an interest as the chair of the National Housing Federation, the trade body for housing associations in England. Everyone should be able to access a good-quality home that they can afford either to rent or to buy, but so many cannot, in so many parts of the country. For many, there is only a bleak future. This is a real crisis.

Despite recent welcome announcements by the Government, public funding for social housing has been declining for decades: 40 years ago, it was £18 billion a year. In 2015-16, it was just £1.1 billion. Over the same period, the housing benefit bill grew from £4 billion to £24.2 billion a year. The figures are stark. Crisis, the National Housing Federation and Heriot-Watt University found that issues such as hidden homelessness and young people desperate to move out of their parents’ house meant that the real need was to build 340,000 new homes per year for the next 10 years. Some 145,000 of these need to be affordable, including 90,000 for social rent. Last year in England we built only just over 5,000 homes for social rent. Rural areas fare worse than towns and cities; people are forced to leave their communities, so local pubs and schools close. What is happening to people with particular care needs? Affordable supported housing is vital to their health and well-being. Last year, virtually all the homes for affordable and social rent were built by housing associations. They are not-for-profit, so any surplus is reinvested to build more affordable homes. Government grant for affordable housing fell from 2010 to 2017, but housing associations kept building.

I was delighted to introduce the Prime Minister at the National Housing Federation conference last month. She committed an extra £2 billion for affordable housing in the next spending review period. With this certainty, housing associations can buy land and plan ahead. But housing associations will not solve the housing crisis on their own. I hope that the recent announcement of the lifting of the HRA borrowing cap for councils will unlock a new generation of partnerships between councils and housing associations to build tens of thousands more homes.

As the noble Lord, Lord Porter, has recognised, these homes will be developed by harnessing the skills, finance, land and experience of local authorities and housing associations working in partnership. I echo the noble Lords, Lord Horam and Lord Shipley, in saying that the biggest barrier to building more homes is access to land. The planning system, the developer-led “speculative” homebuilding model and the laws around land ownership and purchase have created a dysfunctional and inefficient land market. Shelter, the Conservative think tank Onward and many others have proposed reform of the Land Compensation Act 1961, so that a fairer proportion of the uplift in land value will be shared with the community and will include affordable housing. This makes sense: landowners make over £13 billion profit each year by selling land for housing. Capturing even a modest proportion of this for affordable homebuilding could be transformative. I welcome the Government’s recent acknowledgement of this, and I urge them to be bold in next week’s Budget. Will the Minister urge the Government to lead by example and make better use of the land the Government own themselves? They should instruct Homes England and departments to deliver at least 50% affordable housing across the land they own.

The country desperately needs more affordable homes. I support the measures that the Government have announced so far and, of course, the ambitions of my own party in building the homes that we need. Housing associations sit at the centre of these solutions, but they need action on land if they are to build the affordable and social rented homes that we need.