Building Safety Bill

Lord Best Excerpts

2nd reading
Wednesday 2nd February 2022 Lords Chamber

[Lord Best (CB)]

My Lords, my contribution to this debate relates to the new homes ombudsman, the scheme that will be established by the provisions in Part 5 of the Bill. I declare past interests as the previous chair of the Property Ombudsman and chair of the Government’s working group on regulation of property agents.

Among the catalogue of criticisms of this country’s major housebuilders, redress for buyers of defective properties and victims of shoddy workmanship, scams and dodgy deals deserve our urgent attention. We are all familiar with the long list of ways in which the volume housebuilders have let us down—building safety, yes, but also poor design, low space standards, soulless estates, broken promises to provide affordable homes, exorbitant profits and bonuses for bosses, leasehold scams, sales agreements that contain unfair conditions and excessive charges, lack of investment in training, skills, and apprenticeships, building on greenfield sites when brownfield development would be far more appropriate, and building out only at a speed which ensures continuing scarcity and ever-higher prices. We need also to confront housebuilders’ defective workmanship and dreadful consumer/customer service in responding to entirely justified complaints by home buyers. It is excellent that the Government are seeking in this Bill to address this issue.

The proposal for a new homes ombudsman came from two reports by the All-Party Parliamentary Group for Excellence in the Built Environment, supported by the Construction Industry Council. I declare my interest as a vice-chair of that APPG alongside my noble friend Lord Lytton. Our first report, in 2015, entitled More Homes, Fewer Complaints, commended the idea of a new homes ombudsman. Our second inquiry, in 2018, spelled out how an ombudsman could drive up standards and improve consumer rights. It was skilfully chaired by Eddie Hughes MP, who is now the very Minister responsible for implementing the initiative. He says in his foreword to our report:

“I have been contacted by many MPs with despairing constituents who have implored them to help achieve redress from housebuilders refusing to rectify poor workmanship … Consumers desperately need greater leverage to drive a change in this culture”.


Submissions received by the inquiry from home buyers described how builders failed them, making buying a new home, as one first-time buyer said,

“the worst decision of their life.”

Surveys show that well over 90% of home buyers have experienced snags or defects when moving in, and in over 70% of those cases the problem has never been fully resolved. We are a very long way from zero-defect construction. It is quite extraordinary that the new house buyer has to expect snagging difficulties, problems with doors and windows not fitting properly, leaks and cracks. If cars—vastly more complicated things than houses, with thousands of working parts and the capacity to travel safely at speed—can be purchased without defects then why not static, solid, basic houses?

So it is very good news that we are now to have an ombudsman to whom the home purchaser can turn. There have been concerns over the suggestion that the industry-based New Homes Quality Board, rather than the Secretary of State, might appoint the ombudsman and write their code of practice. This could undermine public trust and lead to accusations that the housebuilders were pulling the strings.

My short list of questions today to the Minister, whom I congratulate on bringing forward this legislation, relates to the powers that the new homes ombudsman will possess. In essence, I am asking: will the ombudsman have real teeth?

First, could the Minister confirm that the new homes ombudsman will have the power to expel a housebuilder from the redress scheme—for example, for non-payment of compensation to a buyer—and that this would mean, quite properly, the ombudsman having the power to stop any further sales by a builder since they could not continue to sell homes if no longer in the scheme?

Secondly, will the ombudsman be able to award high enough levels of compensation to deter bad practice?

Thirdly, in common with many ombudsman schemes, will this ombudsman have the power to undertake own-initiative investigations around issues likely to justify multiple complaints, without each complainant having to make a separate case, and will it be able to publish guidance accordingly?

Fourthly, to avoid sharp practices and eliminate detrimental clauses in the small print, will the ombudsman be able to require the use of standardised sales contracts?

Fifthly, can it be that the ombudsman will have jurisdiction only for the first two years after a purchase, bearing in mind that defects often emerge after that date and that warranty providers exclude all the builder’s smaller defects that can make life miserable? The Legal Ombudsman, for example, can take action up to six years after a problem has been identified.

Sixthly, will the ombudsman be able to specify that builders use only approved warranty providers that have passed a rigorous assessment?

Seventhly, will the ombudsman be able to ban non-disclosure agreements—“gagging orders”—which some builders, for fear of gaining a poor reputation, have insisted on from buyers whose homes have been subject to remediation?

Eighthly, will the ombudsman publish its decisions, to name and shame offenders and exonerate the others?

Lastly, will the ombudsman be able to extract a sufficient levy from the housebuilders to resource all the work necessary to deal with what I suspect will be a multiplicity of complaints from all over the country?

I look forward to hearing the Minister’s response and, I hope, to being able to support this important ingredient in the Bill.

Regulation of Property Agents Working Group

Lord Best Excerpts

Wednesday 20th October 2021 Lords Chamber

[Lord Greenhalgh (Con)]

My noble friend should note that the Government welcome the final report of the independent Regulation of Property Agents Working Group, chaired by the noble Lord, Lord Best. The Government have been clear about the need to raise professionalism and standards among property agents, which is why we tasked a group of experts from across industry, led by our highly experienced chair, to advise on the best way to secure this objective. The working group’s report and recommendations are an important development towards ensuring that all consumers are treated fairly and all agents work to the same high standards.

[Lord Best (CB)]

My Lords, as noble Lords have mentioned, I chaired the Government’s working group on regulation of property agents. I am very grateful to the noble Baroness, Lady Hayter, for her sterling ongoing work on this issue. Bearing in mind that the leading industry bodies for estate, lettings and managing agents were all on our working group, as well as consumer experts; our recommendations for a regulator of property agents were unanimous and favourably received by Ministers; the cost of a regulator would fall on the industry rather than on the Government; and I delivered our report over two years ago, may I press the Minister to confirm that there will at least be news of the necessary legislation within six months?

[Lord Greenhalgh (Con)]

I take this opportunity to pay tribute to the work undertaken by the noble Lord on the wide-ranging recommendations contained in the final report from his working group. I am grateful to him and to all those who contributed. However, he will appreciate that this is a complex area with many interdependencies. Having paused work on it at the height of the Covid-19 pandemic, we continue to consider the recommendations in the noble Lord’s report.

Leasehold Reform (Ground Rent) Bill [HL]

Lord Best Excerpts

Committee stage
Wednesday 9th June 2021 Grand Committee

Moved by

[Lord Best]

4: Clause 2, page 3, line 7, at end insert—
“Retirement homes where development has begun prior to commencement
(12) A lease is an excepted lease if it is a lease of a retirement home, and—(a) a contract to purchase the land to develop retirement homes was agreed before 1 April 2021, and(b) development of the homes began before the relevant commencement day under section 25(4).(13) A lease is a lease of a retirement home if—(a) it is a term of the lease that the premises demised by the lease may be occupied only by persons who have attained a minimum age, and(b) that minimum age is not less than 55.”

[Lord Best (CB) [V]]

My Lords, I thank the Homes for Later Living group for its briefing on the issues that I shall raise. I greatly welcome the Bill, and congratulate the Government on taking the bold step of getting rid of ground rents. I know there is more to come in this space, and I look forward to further legislation to assist existing leaseholders in the future.

This amendment is intended to tidy up an anomaly in the Bill relating to the provision of retirement housing. I declare my interest as co-chair of the APPG on Housing and Care for Older People, and chair of the five inquiries flowing from the so-called HAPPI initiative—Housing our Ageing Population Panel for Innovation.

I shall set the amendment in context. Retirement housing is an important but very small part of the housing scene. It seeks to meet the needs of older people who want to “rightsize”, usually from a family house and garden to somewhere easy to manage and inexpensive to heat, with space and light and without stairs and obstacles, where care can be delivered if need be—and, importantly, with the opportunity for company and companionship, in these times when loneliness is a problem for so many.

By moving in later life, older people not only avoid the struggle and cost of maintaining a large property, and prevent the need for an expensive and unpopular move into residential care, but bring a much-needed family home on to the market. The house buying and selling chain that follows means that a young family, too, can access the home they need. The nation gets two for one. Yet in the last year before Covid, of around 200,000 homes built, only about 7,000 were tailor-made for later living—down from 28,000 in the recent past. That output is far short of the numbers needed, with surveys indicating that nearly 4 million people over pension age would be interested in downsizing—or rightsizing—if the opportunity were there.

I have been anxious to see whether the Bill assists or undermines the already very low level of new home building for older people. As it stands, there is a danger that it will have a negative effect on that sector, because ground rents currently play a special and different role in such schemes. The specialist developers of retirement housing have had a tough time competing with the volume housebuilders, which make bigger profits, and so pay more for sites, by concentrating on younger buyers who are less discerning and often desperate to move.

Retirement housing cannot take advantage of Help to Buy subsidies, or the ongoing stamp duty relief for first-time buyers. Importantly, retirement accommodation must include extra space for communal facilities—a clubroom, a garden area and a range of other facilities in assisted living and extra care schemes, such as a restaurant, a treatment room, accommodation for care staff and a guest room. Space for those items can add up to 30% of the total cost of a residential development.

The cost for a scheme of 40 apartments is likely to be between £1 million and £2 million. This is where ground rents come in. They have not been, as they are in other housing schemes, payments of “something for nothing”. When capitalised and sold to investors, they have been the means of funding the extra capital costs of the communal spaces inside and out. As I said at Second Reading, they have been “something for something”, and have represented an alternative to a higher purchase price, which would be entirely justified, but which can put off buyers in this sensitive marketplace and debar those unable to afford the extra cost.

Why, you may ask, cannot service charges cover the capital costs in retirement housing, instead of using ground rents? The existing rules on what goes into a service charge—which can, of course, cover the ongoing revenue costs of communal facilities—mean that it is impossible to use a service charge to pay for these extra capital costs. This is as it should be.

--- Later in debate ---

[Lord Best (CB) [V]]

My Lords, I am grateful for all the contributions to the debate on the amendment. Perhaps I may respond to them all.

The noble and learned Lord, Lord Mackay, and the noble Lord, Lord Naseby, asked whether an age limit of 55 is sensible. It was chosen by the Government and is the age chosen by a number of retirement housing schemes. I agree entirely with the sentiments expressed by the noble Lords on that. Having had some responsibility for developing such schemes, I know that people actually move in in their 70s, not their 50s. The sometimes vain hope is that the scheme will attract a few younger people in order to get a mix of ages throughout. Indeed, sometimes people with disabilities who are in their late 50s are ideal people to move in. But the reality is that despite an age restriction of 55, people will only actually move in in their 70s. However, the flexibility has worked quite well also.

Other noble Lords were more sceptical. I hope that perhaps if they have a good look at Hansard, they might be convinced that there is a “something for nothing” versus a “something for something” debate here and that this particular kind of housing has achieved something for something with ground rents in the past and the transition to a future in which it has to do without that will present some problems.

As the noble Lord, Lord Lennie, and the noble Baroness, Lady Grender, said, it is probably the case that, in the longer term, there will be more transparency in a higher purchase price. It means that people will have to fork out more at the beginning—they cannot spread it over a period of years with a ground rent—but it will be more transparent. If some people cannot afford it, that is a casualty along the way, which I am sorry about, but it will lead to greater transparency in the longer term.

In the meantime, there are developments in the pipeline that are a cause of actual concern and difficulty. I am grateful to the Minister for his comments. He made it clear that this sector was given quite a clear steer back in 2019 that it could carry on as it was with new developments because this ban on ground rents would not affect it and it would be exempted. I agree with the change of mind that followed. It is right that all people are dealt with the same, younger and older alike, and that there will be no ground rents in the future.

I am happy with that, but it does leave the providers of later living housing rather high and dry. Although they have been given until April 2023—a similar period to that for housebuilders building for younger households—it is a fact that they need a bit more time. The buyers in this particular marketplace are right to be discerning, but it does take longer and there will be a problem for the relatively small number of 180-odd developments and about 4,200 homes affected, for which the transition is just not long enough. We will have weird situations where there are two kinds of occupier in the same development, some paying ground rents and some not, and the producer of the scheme having some financial and management difficulties accordingly. It would be quite simple to help them on their way and encourage this sector to develop, rather than discourage it, which I fear is the outcome at the moment. However, I am happy to withdraw the amendment at this stage and thank all noble Lords who participated in the debate.

Amendment 4 withdrawn.

Social Housing

Lord Best Excerpts

Monday 24th May 2021 Lords Chamber

[Lord Greenhalgh (Con)]

My Lords, we have set out a distinct part of the programme to deliver more social rented housing. We are looking to deliver some 32,000 units over the course of the programme.

[Lord Best (CB) [V]]

Has the Minister considered the Affordable Housing Commission’s proposal for a fund to enable private landlords who want to exit the market to sell to housing associations or councils, which can carry out the necessary upgrading and re-let the property at affordable social rents, thereby achieving a much-needed increase in social renting and saving public funds spent on unsatisfactory temporary accommodation, while rescuing private landlords who want to sell up?

[Lord Greenhalgh (Con)]

My Lords, the Affordable Housing Commission’s September report proposed a fund to support social housing landlords to acquire both existing private sector stock and new-build stock from private developers. Through the affordable homes programme, we already allow social housing providers to use grants to acquire from developers market-sale properties that are above their existing planning requirements.

Leasehold Reform (Ground Rent) Bill [HL]

Lord Best Excerpts

Monday 24th May 2021 Lords Chamber

[Lord Best (CB) [V]]

My Lords, I congratulate the Government on bringing forward this Bill, with its central proposition to get rid of ground rents for leaseholders. These charges represent payment of “something for nothing” and, when capitalised and sold on, have netted an undeserved windfall bonus for the housebuilders. As the Minister noted, some of the housebuilders have exhibited greed and a complete lack of transparency in charging ground rents that escalate alarmingly.

My maiden speech in your Lordships’ House, nearly 20 years ago, was in the Second Reading debate on what became the Commonhold and Leasehold Reform Act 2002. I expressed the view that this legislation would mean that commonhold would, in time, largely replace conventional leasehold, to the great benefit of occupiers. How wrong I was. Commonhold has never taken off because the oligopoly of volume housebuilders has prevented its growth by offering only leaseholds with ground rents that give them spurious additional profits.

I greatly welcome the imminent end to ground rents. This will enable a much-needed reawakening of the commonhold model, and I am delighted that the Minister has set up a task force to explore the next steps for commonhold. Of course, ground rents will remain problematic for existing leaseholders, so we must look forward to the Government introducing measures to help these occupiers too.

I have two, more specialist points. First, there are some different considerations relating to ground rents for developments exclusively for older people. I declare my special interest as co-chair, with Peter Aldous MP, of the All-Party Group for Housing and Care for Older People. There is a dearth of purpose-built accommodation designed specifically to provide the manageable, accessible, comfortable and sociable retirement accommodation for older people wanting to “right-size” and avoid loneliness and isolation. I am keen, therefore, not to undermine those companies selling well-designed new retirement homes.

Although I know of serious complaints in times past about service charges from the less reputable of these housebuilders, their ground rents can represent “something for something”. When the freeholds are sold on to investors, the sum raised can pay for the capital costs of more spacious communal areas: perhaps a meeting room with kitchen facilities, shared garden areas and so on. While these capital costs could be funded by a higher purchase price, there is a sensitivity that the total price may then deter some purchasers. Moreover, as I read it, the Bill means that these extra costs could not be covered by any form of ongoing charge, any addition to the service charge. So meeting the additional costs of extra space and amenities could be problematic.

This is compounded by the issue of timing for sales of retirement housing schemes. Because the Bill provides a breathing space right through to April 2023, most of the homes where a site has already been acquired will be sold before the ban on ground rents becomes law, so, in negotiating the land purchase, the developer can take account of the absence of any ground rent. But the sales process is often very slow for retirement properties, as I know from experience in housing associations that have sold retirement homes, because older people are much harder to please than young buyers. They will take their time before committing themselves to a purchase. Almost always, and very properly, they want to inspect their potential home when it is fully finished, rather than buying in advance after seeing a show home. They may even want to meet up with the scheme’s manager before taking a final decision.

This means that there will be some retirement housing developments that have not been fully sold out by April 2023, but for which the land had been bought in good faith, with planning consent, before the Government’s decision to end all ground rents was announced in January 2021. In these cases most of the apartments in a retirement development are sold, but a handful are yet to go. Where that happens there will be the anomaly of most occupiers continuing with a ground rent, but later purchasers living next to them not paying these charges. Could the Minister see whether it might be relatively simple to incorporate an amendment to the Bill that exempts from the ban on ground rents that small number of retirement apartments where the developer/housebuilder had started construction works by January 2021 but has still not sold all the apartments by April 2023?

My final issue concerns the property agents handling leaseholds: the estate agents who sell them and the managing agents who collect the ground rents. I had the pleasure of chairing the MHCLG working group on regulation of property agents—RoPA—which, as requested by the then Housing Minister, reported in July 2019. We raised concerns about leasehold and freehold charges, and we made recommendations to government for improvements to this unregulated sector to protect consumers and raise standards.

Improving the lives of leaseholders depends not just on the legal framework, of which the ground rent issue is an important aspect, but on the performance of the property agents who, day by day, manage the properties. Indeed, these managing agents are in the front line of the new arrangements for fire and building safety, for which other legislation is before Parliament and which will involve spending billions of pounds, much of it public money, on leasehold property. Although there are some highly professional and thoroughly commendable firms of managing agents, shocking tales abound of managing agents who behave badly, often with leaseholders ignorant of the misdemeanours because of a lack of clarity, transparency and accountability on the part of the agents.

The RoPA report spelled out exactly how this sector could be properly organised and regulated to protect consumers by licensing agents, requiring qualifications and adherence to a code of practice. Our report was unanimous and came from a group representing the key professional bodies, trade associations and consumer representatives. I believe that the Government remain committed to professionalising this sector, and it would be very helpful if the Minister could tell the House where his Ministry has got to in progressing the RoPA 2019 recommendations.

In conclusion, it is great that the Government are now on the case and taking forward significant improvements for leaseholders. This is the start of an important journey, with more yet to come.

Rent Arrears: Covid-19

Lord Best Excerpts

Thursday 20th May 2021 Lords Chamber

[Lord Greenhalgh (Con)]

My noble friend is quite right. I have asked my department to do that. My officials carefully studied the Scottish and Welsh schemes to support tenants with rent arrears. I understand that a relatively small number of loans have been made by these schemes. Indeed, the Government continue to believe that it is right to provide non-repayable financial support rather than encouraging further debt.

[Lord Best (CB) [V]]

My Lords, I declare my housing interests as on the register. Has the noble Lord’s ministry been able to study the outcomes of the tenant loan scheme operating in Spain? Has this enabled tenants to pay off Covid-related arrears successfully and avoid the traumas and cost of widespread evictions? If the scheme is working well in Spain, why not here?

[Lord Greenhalgh (Con)]

My Lords, we continue to review other examples of support, including that in Spain, as well as those in the devolved Administrations in the United Kingdom. We will consider what impact they might have, but we will continue with the policy we have about not encouraging further debt.

Queen’s Speech

Lord Best Excerpts

Monday 17th May 2021 Lords Chamber

[Lord Best (CB) [V]]

My Lords, I declare my housing interests as on the register and will use my time today to address the housing issues raised in the gracious Speech. If we did not know it before, we certainly know after the Covid experience that the widest divisions, the greatest inequalities in our quality of life, are found in our housing circumstances. For those of us in a comfortable home, maybe with a nice garden, the pandemic has been infinitely more bearable than for our fellow citizens in cramped, overcrowded, insecure, poor conditions. We can appreciate more than ever the space indoors, the access to green space outside and the security that comes from owning our home. For so many others, life during Covid has been made utterly miserable by accommodation where there is no room to play, no room to work, and by the impossibility of home schooling and the insecurity that comes from the threat of losing even the poorest quality flat because earnings from an insecure job may be lost.

Covid has revealed the impact of acute shortages of affordable housing, not least in the huge numbers of children living in temporary accommodation, which has followed the halving of social housing—of housing association and council housing—from a third to just 17% of all homes, and the hazards of our dependency on a fragile private rented sector. Does the gracious Speech contain the ingredients to fix these problems, which are causing such damage to our physical and mental health while undermining the wider economy?

Government have provided excellent Covid-related emergency help by enabling local authorities and voluntary bodies to secure accommodation for those sleeping rough, by restoring part of the recent cuts in the benefits for housing help, and by requiring landlords to postpone evictions, but the nation’s underlying housing problems remain. The Queen’s Speech mentions forthcoming measures to enhance tenants’ rights and to support leaseholders. I look forward to the Bills introducing these helpful changes, but the Government’s main proposition for ending housing shortages—thereby stabilising prices and improving affordability, as well as reducing homelessness in its different forms—rests on reforms to the planning system to make it quicker and easier to gain planning consent. The downside of this would be the much-reduced opportunity for input by local communities and their local planning authorities. I understand the Government’s frustration that local opposition can delay new home building, but objectors fearing the worst have often been proved right.

The Government hope to prevent their new arrangements being abused, and instead to improve design and quality by strengthening the rules governing the behaviour of the notorious volume housebuilders. However, it seems unlikely that these planning reforms will achieve a big increase in housebuilding and, disastrously, they could mean fewer affordable homes. Planners have already been releasing land on an extensive scale, but house prices are still rising faster than incomes. The LGA estimates that enough land has been allocated to develop over 1 million homes that have not yet been built. We know from the seminal report from Sir Oliver Letwin that the main reason the housebuilders take their time is so that the speed of sales is slow enough to maintain high house prices.

Sir Oliver called for the nation to take back control of housing development from the oligopoly of major housebuilders to ensure that this country’s precious land resource fulfils society’s needs. He advocated local authorities setting up development corporations to acquire larger sites, paying landowners a reasonable price, underpinned by CPO powers, and then producing master plans that would meet local needs, with plots parcelled out to several housebuilders and to social housing providers, with green spaces, community facilities and so on. Coupled with a real increase in the grants that enable social landlords to make their homes truly affordable, the Letwin proposals for capturing land value for the public good could represent the fundamental change that is so badly needed.

Sadly, the Queen’s Speech suggests that the Government are not yet ready to take the really robust action needed to address the underlying causes of this most pressing national need. Any reassurance from the Minister that there is more to come would be greatly appreciated.

Planning: Net Zero Emissions Targets

Lord Best Excerpts

Monday 19th April 2021 Lords Chamber

[Lord Greenhalgh (Con)]

My Lords, we recognise the importance of encouraging retrofit. That is why, as part of the Planning for the Future reforms, we are looking at making it easier to support changes of use and improvements to existing buildings.

[Lord Best (CB) [V]]

My Lords, as the Minister knows, there are two ways of getting housebuilders and developers to achieve higher standards: the national building regulations and the local planning requirements. Is the noble Lord’s Ministry looking at how these sometimes conflicting approaches could be harmonised and how the weak enforcement of local planning requirements could be better resourced to prevent housebuilders evading their responsibilities?

[Lord Greenhalgh (Con)]

My Lords, we recognise the interdigitation between the national standards and other forms of regulation. That is why we started with the implementation of an interim 2021 Part L uplift for new homes as swiftly as possible, in advance of the 2025 new home standards. We are working closely with local government to ensure that consistency.

Inclusive Society

Lord Best Excerpts

Wednesday 14th April 2021 Grand Committee

[Lord Best (CB) [V]]

My Lords, I thank the noble Baroness, Lady Lister, for initiating this important debate and for her powerful opening speech. I draw attention to my housing interests on the register.

Perhaps I could preface my comments with a word of appreciation for the little-known but invaluable housing role played by His Royal Highness the Duke of Edinburgh. As patron and then the very active president of the National Housing Federation throughout the 1970s and 1980s, he gave the housing association sector much needed credibility and status. He chaired our AGMs, opened innumerable housing developments and chaired our rural housing inquiry in 1976 and then the influential inquiry into British housing from 1984 to 1992. His unsung support for better housing deserves widespread recognition.

Covid has certainly exposed the housing divide. Those of us in secure homes with space for home working and home schooling, with gardens, or at least balconies, and some green space outside, can hardly imagine life during the pandemic in insecure, overcrowded, claustrophobic flats, month after month.

Covid has also identified how housing circumstances cause poverty and increased inequalities. In particular, the pandemic has magnified the problems of the much-enlarged private rented sector—its lack of security, its higher levels of unhealthy conditions and overcrowding and its rent levels that can drive families into poverty.

Unsurprisingly, with so many PRS tenants paying over 40% of their pre-pandemic income in rent, several hundred thousand have now fallen into debt and rent arrears. A national homelessness disaster created by Covid has been only temporarily averted by the Government regularly extending the ban on evictions, not least because of the huge backlog of repossession cases in the courts.

In recognition that the PRS is simply not suited to housing all those who must now turn to it, the Affordable Housing Commission has called for a rebalancing of rented housing to enable social landlords, councils and housing associations to buy the properties of private landlords now wanting to exit the market and to pursue a programme of new, truly affordable homes of around a third of the Government’s overall target of 300,000 homes a year. Sadly, the £2.5 billion per annum in direct grants for more affordable homes cannot achieve the scale needed.

This may seem the worst time ever to be seeking a major increase in government investment in affordable housing. Government has never been deeper in debt. The decarbonisation of existing properties and the rectification of cladding and other defects are both requiring billions more from housing budgets. But this may also be the best time. Long-term government borrowing has never been cheaper. Investing in the rebalancing of rented housing pays back handsomely in health and social care savings, in an end to housing benefit costs rising exponentially, in improved productivity and economic revival and, most of all, in redressing the inequalities and miseries that Covid has so starkly laid bare. This is the way literally to build a more inclusive society.

Housing Strategy

Lord Best Excerpts

Wednesday 24th March 2021 Grand Committee

[Lord Best (CB) [V]]

My Lords, I declare my relevant interests as in the register, including as chair of the Affordable Housing Commission and as a Church Commissioner for the Church of England. I congratulate the most reverend Primate the Archbishop of Canterbury on establishing this housing commission and thank him for his inspiring presentation of its findings today, and I thank its chair, Charlie Arbuthnot, and the commissioners, for bringing together an excellent analysis of this country’s severe housing problems and their potential solutions. My comments are in two parts: first, a ringing endorsement of the commission’s main conclusions, and then a commentary on the specific recommendations to the Church of England on the use of its land assets.

I greatly welcome the commission’s housing policy recommendations. Its core conclusion is that

“the primary issue with the housing sector is not just a lack of housing”—

the lack of housing to which the noble Lord, Lord Lilley, rightly refers—

“but instead a lack of truly affordable housing, particularly for those on low incomes.”

This chimes with the theme of the Affordable Housing Commission, organised by the Smith Institute and funded by the Nationwide Foundation, which reported last year. We showed that, in large parts of the country, even if a landlord is willing to offer you a place, the rent is likely to absorb so much of your income—40% or even 50%—that you will end up in poverty, in debt, in arrears or, at worst, homeless.

I cite as an example the official statistics for poverty from Brent Council’s Poverty Commission, which I had the privilege to chair last year: before housing costs, 17% of households and 22% of children in the borough were classified as living in poverty; after housing costs were taken into account the figure rose to 32% of households and 43% of children. So the housing costs doubled the numbers living in poverty, to say nothing of so many being in the overcrowded, insecure and unhealthy conditions that have been shown up by the disproportionate impact of the pandemic on these communities.

Our Affordable Housing Commission noted that so many more households are struggling with housing costs because of the switch to the private rented sector, with its market rents, which has doubled in size in less than 20 years, to 20% of the nation’s housing, while the social housing sector—housing association and council housing—with its much more affordable rents, has halved to just 17% of our homes. The solution is for the Government to support councils and housing associations to increase their output of so-called social rented housing to around a third of the Government’s target of 300,000 new homes per annum.

I turn to the special ingredient in the commission’s recommendations which relates to the Church of England itself in addressing the housing crisis. The report highlights the wonderful work done at the local level by members of faith groups in social action that helps homeless people and engages with housing support of different kinds. The commission sees a special opportunity for practical assistance to extend this commitment through the use of land and buildings in the Church of England’s ownership. This is enormously important because the price and availability of land is perhaps the greatest stumbling block to producing the affordable housing we need. However, this is by no means a straightforward matter, as my three years as a Church Commissioner, under the skilful and sensitive chairmanship of the right reverend Prelate the Bishop of Manchester, have taught me.

The first obstacle to attempts to dispose of a piece of church land or buildings on favourable terms—for example, to a community land trust or a voluntary body working for the homeless—is the confusing legal obligation on any charity to reject all but

“the best terms reasonably obtainable”.

In reality, the definition of “best value” should not be such a problem. Indeed, the price a housing association or other voluntary body can pay will often not be appreciably lower than that obtainable from a speculative development and other benefits will more than compensate for any difference—benefits not just to society but in the wider work of the Church itself, sometimes even with the provision of a nomination right to a rented flat for a church worker, curate or a retired vicar. I hope that ongoing discussions with the Charity Commission will resolve this long-standing valuation issue. However, it is possible that your Lordships’ help will be needed for legislative change to remove this irritating obstacle.

Then there is the anxiety that disposing of church land or buildings at anything less than full open market price will diminish resources for the Church’s core ministry. Land is a highly significant part of the Church’s historic assets. In addition to the commissioners’ land holdings of over 90,000 acres, there are hundreds more sites and buildings with development potential within the Church’s 41 dioceses, with initiatives in Gloucester and Newham, for example, already showing the way.

The Church Commissioners have been highly successful in promoting ethical investment for their stocks and shares, most prominently in exerting pressure on oil companies to decarbonise and meet sustainability goals. This sets the precedent for the commissioners to be a pace setter also in respect of the Church’s investments in land. The commission calls for generous, “sacrificial” action but I see a number of good reasons why ensuring that land assets serve a social purpose need not be in conflict with the need to achieve proper returns from this source.

First, it is the obtaining of planning consent that makes a development possible and unlocks its hidden value. This requires the backing of the local planning authority. There is widespread disenchantment with the volume housebuilders because, despite making substantial profits, so often they have demonstrated poor quality, poor design, lack of space and community facilities, leasehold scams, unjustified bonuses and, prominently, an antipathy to including affordable housing in their developments. Local authorities are likely to be far keener to deal with Church bodies that exercise responsible stewardship in the use of their land assets. Similarly, the locals who protest—often with much justification—at low-quality developments with no green spaces or community components, and with few, if any, homes affordable to local people, can be brought on side when a responsible stance is taken for Church-owned sites.

If the Church nationally and at the diocesan level has the reputation of insisting on high standards and achieving public good, those vital planning consents can and should be more easily secured. I am delighted that the Church Commissioners have signed up to adopting the good behaviour of the 2020 stewardship code when selling land. This is a step in the right direction and translating this into specific outcomes, with a stewardship kitemark, is the important next move.

Secondly, doing the right thing in utilising land holdings can also be a way of improving the return from this asset for years to come. By following the example of a growing number of other major landowners—including the Duchy of Cornwall with its successful Poundbury urban extension and its new scheme at Nansledan—and being a patient investor, long-term gains can be obtained. Simply selling to one of the oligopoly of housebuilders only enriches those companies. Instead, retaining land ownership and organising high-quality, community-enhancing developments, often in partnership with smaller building firms and housing associations, can keep the development profits in the Church’s hands.

It is good to note that investigations are now being undertaken by the Church Commissioners, with top-level property experts, to explore these opportunities. I commend the Citizens UK initiative, with which the Church of England is closely associated, alongside the Methodist Church and others, for a partnership with the Government that offers land release for social housing in return for funding to cover all the initial feasibility work. The Secretary of State, Robert Jenrick, has agreed to discuss this proposition further and I hope that the Minister will also engage.

In these ways, I am hopeful that, without weakening its financial position, the Church of England, and perhaps other denominations if they see fit, will maximise its direct contribution to easing the nation’s housing shortages. By encouraging responsible action by other landowners, from Oxbridge colleges to the Ministry of Defence to academy trusts and charitable foundations, it can magnify its influence for good, just as it has done so well with its ethical equity investment policies.

I conclude by reiterating my thanks to the most reverend Primate and I hugely welcome the appointment of the new bishop for housing, Bishop Guli Francis-Dehqani, who can take forward the Church’s renewal of its historic engagement with the housing scene. I wish her every success in helping all of us to up our game in tackling this most fundamental of our society’s problems.