Housing and Planning Bill

Earl of Lytton Excerpts

Tuesday 26th January 2016 Lords Chamber

[The Earl of Lytton (CB)]

My Lords, this is a monster of a Bill and I have a fair clutch of interests to declare, as have other noble Lords: landowner, residential and commercial landlord, one-time developer, and chartered surveyor with an involvement in construction management and development land. I am an immediate past president of the National Association of Local Councils, and a vice-president of the Local Government Association. As ever, my views expressed here are entirely my own.

Nobody doubts the need to tackle the housing shortfall or underestimates its pernicious effects. The questions, therefore, are on the mechanisms, the pace of change and affordability. There is a degree of bravery involved in this Bill, because there are many vested interests in continued high and rising residential property values. We should make no mistake about that. There is much money, loan security, speculative prospect, household equity and tax yield, not forgetting community benefit and infrastructure contributions, to be had out of this system. Housebuilding is an important industry and needs value growth. I view starter homes in that light, and it is clear to me that this is the brave new world of the owner-occupier and the almost certain and progressive attrition of the social rented housing sector. However, I simply note that there will always be those among the population who, for all sorts of reasons, require housing but will be unable to pay a commercial market rent or to obtain a mortgage to enable them to buy it.

Retaining funds derived from social housing sales for the purposes of building more has something of a chequered past. I recall that the proceeds of the Thatcher era sales did not inure for that purpose, despite political promises, and it was a Labour Chancellor who simply pocketed the fund for other things in about the year 2000.

Focusing on my own misgivings about the financial aspects of a one-for-one assumption by selling off social housing at a 20% discount, I understand that relief from the community infrastructure levy and Section 106 obligations, plus a cheaper form of construction, might close part of the gap. However, I observe that development viability is replete with price-sensitive variables, and there is a fair chance that even if one-for-one is achieved, this will result in homes that do not last, are small, cramped and badly arranged, in the poorest locations, and likely to underperform against the market generally. I would question the economic and practical wisdom of that.

I related very strongly to the comment made by the noble Lord, Lord True, about infrastructure. When I travel around and find burdens on local roads that have not been dealt with by infrastructure improvements, I know very well what is happening.

Rural housing has been mentioned by others. A couple of days ago, I spoke to the Exmoor National Park officer. I happen to have an estate in the Exmoor National Park, where average house prices to average earnings run at a multiple of over 14. Even the most basic form of new housing is outside the means of the typical rural workforce, as was alluded to by the noble Lord, Lord Teverson. Of course, second homes, holiday cottages and so on are part of that algorithm, as he mentioned.

I do not see a general tide of munificence coming in and providing affordable sites for replacements. If they are to be devoted not to society at large for long-term social good but to provide a one-off windfall for the first successful occupier, I do not see that happening.

A far larger proportion of our European neighbours’ citizenry considers renting privately the norm, with very clear understandings about the respective roles and duties of landlords and tenants. Yet here in this country it has become a divisive football of party politics, in which old prejudices of landlord bad, tenant good, persist. If ever there was a time for cross-party consensus, this is it.

So although I very much support the measures against rogue landlords and their agents, I know several things. First, they will not be adequately policed because there are too few resources to do it; secondly, the honest landlords and agents will be discouraged, while the dishonest ones will continue to flout the requirement; thirdly, careless tenants, of whom there is a number at least equal to that of rogue landlords, will use this to their own advantage with impunity. Here is my suggestion: how about a public online register of landlords and agents who are verified current members of an accredited body with a deposit and redress system so that would-be tenants can check them out in advance? Would that not be great?

On neighbourhood plans, the previous coalition Government made a fine job of devolving powers to communities but did nothing about creating resources and opportunities for the process to be financed. The National Association of Local Councils has consistently argued for community infrastructure levy regimes to be in place by the end of this year and for a greater proportion of that income to go to those parish councils that have successfully completed the neighbourhood plan process. Otherwise this Bill begins to look like a process of setting a task that cannot be completed and then invoking some sort of direct intervention when, predictably, nothing happens. We can do better than that.

I turn briefly to the changes in the compulsory purchase arrangements. I have spoken to the Compulsory Purchase Association and it assures me that, in the main, the changes are welcome. However, there is one anomaly—the occupier’s loss that is paid to a tenant who is displaced on a compulsory purchase. This is disproportionately less than the freeholder’s equivalent. It needs to be looked at.

Finally, I turn to the issue of housing delivery and small housebuilders, in particular, which is not covered by the Bill. These cannot construct houses at the same low cost that the large-volume housebuilders can achieve. It is difficult for them to tackle the upfront costs of the ecological and other investigations that add hugely to the pre-planning consent stage. These are upfront cash costs. Infrastructure costs are often more expensive for smaller sites. Finance houses will lend against the land asset but are much less keen to lend against a construction project for self-evident risk assessment reasons. It will be interesting during the course of the Bill to see what the Government think about how to deal with the question of small builders.

I generally welcome a lot of what is in the Bill and look forward to discussing it in Committee.