Lord Kennedy of Southwark
Main Page: Lord Kennedy of Southwark (Labour - Life peer)
Lord Kennedy of Southwark (Lab)
My Lords, I open my remarks by thanking the right reverend Prelate the Bishop of St Albans for putting this Question down for debate today. It comes at a most opportune moment, so I and all the House are grateful to him. I should also declare an interest as a local councillor.
I have no objection to the right to buy per se but I do have concerns about how this proposed scheme is to be funded and operated through the sale of the most expensive properties that local authorities have, and about the process for replacing the homes sold, given the time it will take to replace them. When I was previously a councillor in the 1980s and 1990s, we used to have hard-to-let properties. In 2015, there is no such thing as a hard-to-let property as the pressures to provide social housing have grown enormously. We are in the midst of a housing crisis in both our rural areas and our towns and cities. Rural areas face particular challenges. I have great concerns that the Government’s proposals run the risk of making it more difficult to provide a proper supply of social housing at rents that people can afford in rural areas. The noble Baroness, Lady Gardner of Parkes, made an excellent point about affordable housing in her contribution.
Earnings, on average, are lower in rural areas than urban areas. There is much less housing association and council housing generally in rural areas, so what there is is a precious resource making up just 8% of rural properties, as other noble Lords said. The right reverend Prelate made the point very well about the deal and its effect on smaller rural associations. I am in complete agreement with him there.
Rural areas face particular problems to get the right mix and balance of housing types to ensure that their communities thrive and prosper. The noble Lord, Lord Taylor of Goss Moor, referred to exceptions in this agreement and I look forward to seeing them in more detail. I hope they will offer the protection he referred to. However, if it could take up to three years initially to replace a home sold under this scheme, that seems a very long time to me. The fact that housing associations will have great flexibility about where the replacement home will be placed means that rural areas could be changed very quickly—and not for the better, as communities lose all or most of their social housing. The right reverend Prelate the Bishop of St Albans again made that point in his contribution this afternoon.
My noble friend Lady Hayter of Kentish Town focused on the charitable status of housing associations and the problems this policy will cause them, and I am completely in agreement with the point she made.
It is difficult in a short contribution to cover all the points one would want to make, but I would be grateful if the Minister answered a few questions for me now or perhaps wrote to me and other Members after the debate. What assessment have the Government made of the effects of the loss of large parts of social housing, in particular in hamlets or villages, and the replacement for that lost housing asset being put elsewhere? Does she expect, or will she require, housing associations to put the replacement property in the same rural local authority area it came from, funded by the sale of authority assets? Or is that not to be considered, so that the associations can put the replacement house anywhere?
Have the Government had any discussions on how a replacement property could be provided more quickly than those initial three years? What assessment have the Government made of how many properties will be bought under this scheme? How will they incentivise landowners to release land for affordable housing, rather than keep it for other opportunities? What consultations has the Minister had with organisations such as the pub is the hub, the Association of Convenience Stores or the National Federation of SubPostmasters on the possible long-term effects of this policy on rural communities? Their members need communities to remain vibrant so that their businesses can remain operational and thrive in future. I again thank the right reverend Prelate for his contribution today.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Williams of Trafford) (Con)
My Lords, I thank the right reverend Prelate for initiating this timely debate. I also pay tribute to the church and the work it has done in providing rural housing, and to all the other landlords who have done the same thing philanthropically to preserve and sustain their local communities. Perhaps I could start with the context; then, I am very keen to answer noble Lords’ specific questions.
In 2010 we inherited the lowest peacetime rate of housebuilding since the 1920s, a dysfunctional planning system and levels of housebuilding that were tumbling. Today, we are growing faster than any other major advanced economy and our job creation is the envy of the developed world. Now, we are meeting the aspirations of people to own their own homes.
On affordable rural housing, this Government believe that meeting the housing needs of rural communities is very important: since 2010, more than 85,000 affordable homes have been delivered in rural local authorities in England. Some communities have gone over and above their commitments. I pay tribute at this point to Willersey in Gloucestershire, which has done just this. But we know that more are needed and we are committed to delivering 275,000 affordable homes over this Parliament in rural and urban areas. The 2015 to 2018 affordable homes prospectus makes it clear that where a particular scheme, for example in a rural location, involves higher than average costs, the HCA will wherever possible seek to take account of such genuine comparators. Our intention is that bidders will not be systematically disadvantaged where there are some higher costs or higher grant bids within their proposed programme.
Local authorities should plan to reflect local needs, particularly for affordable housing, including through rural exception sites. They should also consider whether allowing some market housing would facilitate provision of significant additional affordable housing. Through the Rural Productivity Plan, we will review the planning and regulatory constraints facing rural businesses, including how permitted development rights can better support the provision of new homes, jobs and innovation.
The Government are committed to reforming the housing market and boosting the supply of much-needed housing. Housebuilding starts have more than doubled since 2009 and planning permission was granted for 242,000 houses in the year to June 2015. Almost 800,000 new homes have been delivered in England since 2009. Completions are up and housing starts are at their highest annual level since 2007. More than 260,000 affordable homes have been delivered since 2010 and, with nearly 186,000 affordable builds, we have exceeded our 2011-15 target by 16,000. Over this Parliament, we will ensure the fastest rate of affordable housebuilding in the last 20 years, with 275,000 new affordable homes by 2020.
The right reverend Prelate the Bishop of St Albans asked whether there should be a wider definition of rural. The Government would be willing to revisit the definition if evidence can be provided that this would convincingly increase new housing supply. He also made the point that many new starter homes will not be affordable to people in rural areas. A number of noble Lords also made the point that starter homes may be a threat to rural affordable housing supply. Starter homes are a new form of low-cost house ownership to help young first-time buyers on to the property ladder, including in rural areas. The definition of affordable housing will be expanded to include starter homes, and a consultation on that will take place shortly.
The August 2015 rural productivity plan announced that starter homes will be encouraged through the use of rural exception sites to help villages thrive. Young first-time buyers face significant affordability pressures in many rural areas, so we want the development of starter homes to make a significant contribution to housebuilding in those areas.
The right reverend Prelate also asked what safeguards are in place to ensure one-for-one replacements locally. Under the agreement with the National Housing Federation, there is a clear commitment to all properties sold being replaced with an additional home. Rural areas will benefit from that and there is a clear exemption for rural housing under the agreement, whereby housing associations can decide not to sell those homes.
Both the right reverend Prelate and the noble Lord, Lord Taylor, asked about situations where landlords donate land and want it kept for the specific purposes for which they originally intended it. The agreement we have in place includes examples of types of property that associations may decide they do not want to sell to the tenant, including supported housing, historic legacy stock and homes in rural areas. It also includes rural properties that are protected by clear restrictive covenants in existing residence contracts. That should give a good basis for housing associations to engage with local landowners and their wishes on the issue.
The right reverend Prelate also asked what the Government will do to deliver affordable rented accommodation in rural areas. That is a very good point. Affordable rent was introduced in 2011, and rents can be set at 80% of local market rents. More than 260,000 affordable homes have been delivered since 2010, as I said, of which 85,000 have been provided in England in 2014-15. I cannot provide more specific figures because of the spending review.
The noble Baroness, Lady Hayter, asked about community land trusts being excluded. They are included in the agreement and are one category where properties can be exempted. She does not look convinced, but perhaps I can meet her afterwards.
My noble friend Lady Gardner of Parkes asked for the definition of affordable housing. It is set out in the National Planning Policy Framework and the Housing and Regeneration Act 2008. The NPPF defines it as:
“Social rented, affordable rented and intermediate housing, provided to eligible households whose needs are not met by the market. Eligibility is determined with regard to local incomes and local house prices. Affordable housing should include provisions to remain at an affordable price for future eligible households or for the subsidy to be recycled for alternative affordable housing provision”.
The Housing and Regeneration Act 2008 defines social housing as “low cost rental accommodation” and “low cost home ownership accommodation”. In the Act, a low-cost rent is simply defined as below market rate. Low-cost home ownership is defined by availability for occupation on a shared ownership or equity percentage basis.
My noble friend also asked about sinking funds. Registered providers are generally required to make provision for a sinking fund, for example to meet future costs in shared ownership developments.
The noble Lord, Lord Taylor, asked about landowners selling land above market price. It has to be at discount of market price, otherwise they will not qualify. He also asked about the 10 units limit on Section 106 orders—we discussed this last night—the small sites threshold. A judgment was issued on 31 July this year quashing the Section 106 small sites threshold. Increasing the number of homes is a top priority, and our policy was aimed at securing it by helping small builders and developers to contribute. Section 106 requirements can be very burdensome and prevent developments actually being built. We now have permission to appeal against the judge’s decision.
The noble Baroness, Lady Hayter, said that this was being forced through and was a waste of money. The Government had a clear manifesto commitment to extend right to buy, and we are very pleased that the sector has come forward with a voluntary offer, rather than needing to legislate. The policy will boost not only new home ownership but supply through replacement.
The noble Lord, Lord Best, asked about the impact of high-value council sales in rural areas. We are legislating to require local authorities to pay the Secretary of State a sum in line with the anticipated receipt from the sale of high-value council housing. Councils will be able to retain some of that fund to support new housebuilding in their area.
The noble Lords, Lord Taylor and Lord Kennedy, talked about house prices versus wages in rural areas. It is a particular problem in rural areas; we recognise that there can be that gap. That is why we allocated £1.4 billion through the 2015-18 affordable homes programme in both rural and non-rural areas.
In conclusion, we want to support people who aspire to buy their own homes, and to support young families who sign up for a starter home. As much as possible, we want to support their aspirations by building homes in every part of this country.
Lord Kennedy of Southwark
Obviously, I asked a number of questions that the noble Baroness has not responded to. I assume she will write to me and perhaps place a copy in the House.
Baroness Williams of Trafford
I was about to conclude by saying that I recognise I have not covered everybody’s points, and I will write to them in due course.