Property Market

Debate between Lord Harrington of Watford and Alison Seabeck

Tuesday 25th January 2011 Westminster Hall

[Richard Harrington]

My hon. Friend makes a valid point on a subject that I intended to mention later. The Financial Services Authority is reviewing the mortgage market and, from all the indications that we have received, it intends to bring in, with the intention of protecting the consumer, various restrictions, such as appraising customers and reducing the type of mortgage available, that will significantly reduce the supply. I know that Ministers are aware of that, and I hope that they will bring as much pressure to bear on the FSA as they can. It is fair to say that the lending side is definitely a short-term constraint, but for the purpose of this debate, I will put it to one side. However, I am not trying to reduce its validity.

The core of my argument concerns the supply side of housing—the availability of land with planning permission to build social and private houses. Although I fully support the Localism Bill and its core values of local people and their representatives being responsible for their own actions, I believe that in respect of planning, it could significantly adversely affect the supply of land for housing. If the incentives on offer do not outweigh the anti-development sentiments of residents and their elected representatives, we are in real trouble.

Indeed, the Localism Bill will liberate local communities from stifling Labour targets, especially the well-intentioned but misdirected regional spatial strategies, because it is clear that they have not worked. New homes are being built at the slowest rate since the war.

[Alison Seabeck (Plymouth, Moor View) (Lab)]

Does the hon. Gentleman not acknowledge that since the Secretary of State’s letter went out saying that people could ignore the RSS and everything attached to it, planning applications, and therefore the build for housing, has actually gone off a cliff?

[Richard Harrington]

I agree to an extent with the hon. Lady, and I hope that my position will become clearer a little later.

Watford, like many constituencies in the south-east, is badly in need of housing supply; there is no dispute over that. Even during this recession, there has not been an overhang of unsold properties. If development does not come to such regions, a whole generation of people may find themselves priced out of the market for years to come.

The Localism Bill fails to address a serious issue with regard to policy and planning. A YouGov survey, commissioned by the New Homes Marketing Board, revealed that more than eight out of 10 people believe that Britain needs more housing for sale and rent, especially for first-time buyers. That is very much like a “hands up all those who are against sin” argument. The survey also showed that far fewer people—just about 50%—welcome the construction of more homes in their immediate neighbourhoods. Such a view is significantly understated, because when I send out surveys to my local residents, stopping nearby developments comes back as an important priority.

--- Later in debate ---

[Richard Harrington]

May I make a little bit of progress first? I am not trying to ignore the hon. Gentleman; I am just trying to get my flow going.

I am against the centralised approach of the past. I am asking only for effect to be given to a measure proposed in the open source planning document as well as the Government’s Green Paper. We have to carefully monitor the incentives that we are introducing, such as the new homes bonus, to ensure that they in fact do what they are intended to do. If development targets continue to be halved by local authorities, surely we have to consider other ways to encourage the increase of supply that we all believe necessary. It would be much better if the powers were put in place now, rather than when the problem manifests itself, when it might be too late.

It is very clear to me that the Bill must contain a presumption in favour of sustainable development, so that if the local community has not drawn up its own plan for development, businesses can get involved. The economy is a very important reason for increasing the supply and taking the initiative, but obviously it would have to be proved that the proposals were sustainable. I am most impressed by the presumption in favour of sustainable development. It was one of the most far-sighted proposals in last year’s “Open Source Planning” Green Paper, and was reaffirmed with even more vigour in the local growth White Paper later in the year. It is really important that it is brought into effect as soon as possible.

[Alison Seabeck]

I thank the hon. Gentleman for giving way during his very thoughtful speech.

The presumption in favour of sustainable development is not in the Bill, and a number of witnesses have raised concerns about that in the Bill’s first public evidence session.

[Richard Harrington]

I thank the hon. Lady for her intervention, and I hope to sit in on some of the future public sessions of the Bill Committee.

In the Minister’s opinion, does the Bill remain in step with the White Paper statement about its three functions? The White Paper states that those functions are to allow people to shape their own communities—which I think it clearly does; to provide sufficient housing to meet demand; and to support economic development. I am not sure whether the new homes bonus is enough in respect of the second and third functions, and I think that the Government should create a back-up plan to ensure that development continues.

I should like to take this opportunity briefly to consider shared ownership schemes, which are a very important way of increasing home ownership, and of helping the demand and supply sides to meet. On 21 October, I submitted a written question to the Minister for Housing and Local Government about the Government’s plans to increase shared ownership and low-cost home ownership schemes, which, as I have seen in my constituency, are a very affordable and attractive prospect at the present time. The response was very positive:

“We announced in the spending review almost £4.5 billion investment…a new delivery model is expected to deliver up to 155,000 new affordable homes”.—[Official Report, 2 November 2010; Vol. 517, c. 671W.]

To the best of my knowledge, the details that we have been promised have not yet arrived, and I encourage the Minister to give us some information on that. I very much support what the Government are trying to do with shared ownership, and would like to see progress on that as soon as possible.