Housing Associations

Lord Best Excerpts

Thursday 8th February 2018 Lords Chamber

[Lord Young of Cookham]

The noble Baroness will know that, for any given sum of public investment in housing, you can build either more houses at slightly higher rents or fewer houses at slightly lower rents. In 2010, her party and mine decided to go for the higher-output option. That was the right decision at the time to make faster progress in adding to the stock of good-quality, permanent homes for rent. In October last year, the Prime Minister announced an extra £2 billion for affordable housing and made it clear that a big chunk of that should be redirected towards social housing, as the noble Baroness suggests. We have listened to the representations from housing providers. The £2 billion will be available for social rents as opposed to affordable rents, and by lifting the cap on what local authorities can borrow we are enabling local authorities to build more council houses.

[Lord Best (CB)]

My Lords, the Minister knows that tens of thousands of affordable homes have been produced by requiring the housebuilders to include a percentage of affordable housing in all their big new developments. He will also know that over recent years the housebuilders have found a loophole—the so-called viability test, a specious argument—to renege on those obligations. Can he reassure the House that the Government are going to close this loophole, which is just a scam to enable the housebuilders to get out of the agreements that they have already made and increase their profits?

[Lord Young of Cookham]

The noble Lord makes a valid point. We are concerned at the way in which certain housebuilders use the viability test to reduce the percentage of homes on their sites for social housing. We are reviewing the viability test with a view to increasing the original intention on these sites to have a fixed percentage of social housing units.