Affordable Housing

Lord Greaves Excerpts

Thursday 25th October 2018 Lords Chamber

[Lord Greaves (LD)]

My Lords, I wish to speak on behalf of a distant land—parts of the north of England—with a different perspective, where councils want to provide more affordable and other housing but cannot do so due to local housing market conditions, and where Homes England has failed to adapt its policies to local conditions. I speak with particular knowledge of east Lancashire—Pennine Lancashire—and declare my interest as a local councillor there.

These are areas where land prices are low—some will think them unbelievably low—and where the uplift in land values when houses are built can be negative, taking into account all the costs of the land. In my ward, for example, you can buy two or three-bedroom terraced houses for between £50,000 and £100,000. They are good, decent houses that are well worth living in. Former council houses cost £75,000 or a bit more. New two-bedroom houses in my ward can be bought for £130,000. Renting costs £400, and that is for a month and not a week.

The costs of building a house or managing a rented house in these areas are nevertheless the same as in other areas. There is therefore a huge question of the economic viability of new housing. If the costs of building, including land remediation on brownfield sites, are more than can be recovered from sales or rents, it needs gap funding. It is no good providing loans, because if the housing is not viable, the loans cannot in future be repaid; it needs subsidies from somewhere.

I have with me an internal briefing from my own council in Pendle, written by the senior council officer responsible for development and given to me to use by the chief executive. It is clearly too long to read out to the House, although I would really like to do so. I have provided a copy to the Minister and ask him to pass it to appropriate civil servants and to provide some answers as to how we can contribute with regard to the need to provide housing in the whole country. There is a need for housing in our area; there is just not a financial market for it.

I shall quote one sentence: “As the HCA approach”—

or Homes England as it now is—

“has moved from a regional to a more national one, increasingly we are having problems accessing funding as we are in competition with authorities across the country who often have better housing markets and the availability of much larger sites”.

The briefing gives as an example one site, Further Clough Head in Nelson, which is suitable for 200 housing units—that is big by our standards. It needs gap funding. The council has applied under five different schemes but not yet been successful. The problem is that the methodology that Homes England now uses does not cater for areas such as ours. It requires an uplift in land values, which is not there; it places an emphasis on funding much larger schemes, which it will find easier but is no use for us; it does not cater for specific local needs; and it imposes risk in respect of these marginal sites on local authorities and their agencies, which the local authorities simply cannot take on. If Homes England is not able to share the risk, it is very difficult.

I have with me a list of government schemes over the past five or six years. There were no fewer than eight or nine, which your Lordships will all be familiar with, from which the councils tried to get funding and all we got was peanuts. There are different places and different circumstances. Can we please have different policies, so that we can contribute to providing the houses that the country needs?