Lord Kennedy of Southwark
Main Page: Lord Kennedy of Southwark (Labour - Life peer)Housing and Planning Bill
Lord Kennedy of Southwark Excerpts“( ) A grant made under subsection (2) must include a condition that, if the dwelling to which the grant is applied is sold under the right to buy, money equivalent to the market value (disregarding any discount) of the dwelling is spent by the private registered provider on the provision of affordable housing in the same local authority area or London, including at least one new home replacing that sold which is—(a) of the same tenure, and(b) located in the same local authority area or London borough,in accordance with assessed local housing need.”
Lord Kennedy of Southwark (Lab)
My Lords, the amendment is in my name and that of my noble friend Lord Beecham. It would make a grant made to a private provider conditional on the equivalent market rate for the property sold under the right to buy being spent on the provision of affordable housing in the same local authority area, including at least one replacement home of the same tenure and in the same locality.
We have heard a lot from the Government about this policy not reducing the number of affordable homes, but I am not so sure. One problem we must grapple with when debating this Bill is the term “affordable housing”, because I think it means different things to different noble Lords. When many noble Lords from the government Benches speak, they see affordable housing through the prism of a discounted rate of up to 80% of the market value. In many parts of the country, especially London, such housing would more accurately be described for people on low and modest incomes as unaffordable. There are not many noble Lords on the government Benches, with the exception of the noble Lord, Lord Horam, who have so far put the case for social housing and the need to build more of it. That is why we make specific reference to “tenure” in our amendment, otherwise we would be letting the Government off the hook when they say, “Everything is fine. We have provided so much more affordable housing. Haven’t we done a good job?”, when, in fact, if we look in more detail at what has happened, I fear that we will see an erosion of social housing, of council housing, and its replacement with “affordable housing” that is a very different product.
Amendment 60, in the name of the noble Baroness, Lady Bakewell of Hardington Mandeville, and other noble Lords, will be spoken to shortly and has the full support of these Benches. It would put in the Bill a mechanism to ensure that the tenure of a replacement property was the same as that of the property sold, unless on the basis of local need a different tenure could be justified. This seems a good, sensible example of delivering a national policy with an element of localism included. I will probably intervene again as the debate progresses. I beg to move.
Baroness Pinnock (LD)
My Lords, I shall speak to Amendment 60, to which the noble Lord has just referred and said he will fully support, as will colleagues on his Benches—so I start off from a good place. Before I do so, I draw attention to my entry in the register of interests: I am vice-president of the Local Government Association and a councillor in the metropolitan borough of Kirklees, which, for those who do not know, is in West Yorkshire.
I am very pleased to be able to support Amendment 60, because looking back at the evidence from the right to buy of former council properties during the past 35 years is very instructive in determining whether there is any genuine, realistic hope of like-for-like replacements.
The example that I would like to share with noble Lords is from Kirklees. Prior to the right to buy, there were nearly 40,000 council properties in Kirklees. Now there are fewer than 24,000. Only a very small minority have been replaced by what we now call social housing. Indeed, in the last two years and within the period when councils have had the ability to enable replacements —which is rather different from ensuring that they are enabled, of course—403 homes in Kirklees have been sold under right to buy and only six have been built to replace those that have been lost. What provision is being made to ensure that we can get like-for-like replacements? Without them, we are pushing many people, particularly families, into private rented accommodation.
The provision of decent-quality housing for rent is vital. A particular case was brought to me by a local family. It illustrates why I am particularly concerned about the diminishing stock of social housing for rent. A young family with four children was renting a former council house which was subsequently run by a private landlord. It had what I would describe as 2.5 bedrooms and was semi-detached. It was about 50 years old. The rent was £600 a month—this is in West Yorkshire, not London and that is a lot of money in West Yorkshire.
The other half of the semi next door was still in council ownership under the ALMO that was set up when I was leader of the council, I am pleased to say. It was rented out at £320 per month, so the private rented accommodation was nearly double the price. That was not the only difference. The council house was in a good state of repair. The ex-council house had a leaking roof, which was why it was brought to my attention. The roof had been leaking for a while and the walls were damp, there was mould and the wallpaper was peeling off. The children had health problems, which the GP determined were partly caused by the state of the house. Obviously my first question to the mother who brought this problem to me was, “Have you spoken to the landlord? They should keep the house in a good state of repair. They have a responsibility to do that”. “Yes”, she said. “The only problem is that he lives in South Africa”, and getting action through the agent to the owner was well-nigh impossible, despite the so-called responsibilities and duties of the landlord to do so. Fortunately, I was able to help her find good-quality social housing for her to move into.
That account paints a picture of what is going on. So when the noble Lord, Lord Porter, says, “Don’t worry. We’ll gain one when one is lost because the house is still there”, yes, but what he did not say is that the tenure of that house can be just as important. The selling off of housing association homes will start once this Bill wends its way into law, and the experience of selling off council houses shows that we are pushing families who cannot afford to buy into private rented accommodation. Despite what the Minister and other noble Lords on that side have said, which is that it is important for people to have the right to home ownership, someone needs to explain to me how families that in my experience are often—not always—pushed into poor-quality and poorly maintained private rented properties will ever be able to own their own home. If that conundrum can be explained, I might have more faith in what is being done here. But currently all I can see is that those at the bottom of the income pile are pushed into low-quality accommodation, paying high rents that are not always covered by housing benefit, with little opportunity to put down roots in the community because the length of the lease is short and they have to move on. I know that we passed a Bill which said that if you complain you would not be pushed out, but it does not seem to have worked. I hope that the Minister will be able to explain that conundrum away for me.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Williams of Trafford) (Con)
My Lords, I thank the noble Lord, Lord Foster of Bath, for voicing Lib Dem support and enthusiasm for right to buy—the first party to do so. I thank all noble Lords for their amendments and for taking part in the debate. I fully understand their desire to ensure that affordable housing is not lost from an area through the sale of properties under the voluntary right to buy, and the particular concerns relating to rural areas.
Amendment 57, in the names of the noble Lords, Lord Kennedy and Lord Beecham, will limit how housing associations are able to use the proceeds from sales under the voluntary right to buy by requiring the replacement to be of the same tenure and in the same area as the property sold. I thank noble Lords for their comments on this matter. However, we think it is important that housing associations should have flexibility and not be restricted in replacing like for like when this may not be the best solution for the area. One for one has never been on a like-for-like basis. We have always given that flexibility. By seeking to constrain housing associations’ discretion from Whitehall, we are limiting their ability to manage their assets to deliver their business and charitable objectives. We believe that these decisions are best taken by housing associations in the light of local conditions and need. My noble friend Lord Horam mentioned Westminster, which is very cognisant of its key workers, and the interventions it is making in conjunction with its local housing associations. This is the type of freedom we wish to see.
The noble Lord, Lord Kennedy, said that the replacement homes will not be affordable. Not everyone can live in exactly the location they wish to regardless of cost, be they social housing tenants, private renters or home owners. The best way to make homes affordable is to build more. I do not think any noble Lords disagree on that point. Our reforms will ensure that social housing is prioritised for those who need it most. Obviously, tonight we are talking about one-for-one replacement but there are all sorts of tenures of housing—for rent, for purchase, for low-cost rent—and housing associations will take all those issues into account when determining what types of houses to build.
Noble Lords asked whether we had achieved one for one, and made the point about two for one in London. In 2013 there were 3,054 sales under right to buy and by 2015 there were 4,017 starts, so I think noble Lords can agree that that was on an approximately one-for-one basis in terms of sales and new constructions. In London in 2012-13 there were 632 sales and in quarter 2 of 2015-16 there were 1,240 starts. I appreciate that noble Lords will immediately pick up the three-year time difference but under that agreement there were three years in which to replace the houses sold. In the rest of the country that figure has been achieved and in London it has been exceeded.
The noble Lord, Lord Kennedy, said that the flexibility around the tenure of the replacement units will erode the housing stock. Housing associations should be free to replace the properties sold with alternative tenures—they have done and they will do, I am sure—where this may be appropriate for the community they serve. This can include shared ownership, which we talked about in previous debates. Obviously, a much lower deposit is required for a shared-ownership property.
The question was asked: what does the deal mean for London and social housing in the capital? The largest London housing associations have all signed up to the agreement. As with the rest of the country, receipts from the sales will be reinvested in the delivery of new homes. I will say again that these are additional homes and, as noble Lords have said, the homes sold remain homes for the people who have bought them.
I now turn to Amendment 60. I fully understand the desire of the noble Baronesses, Lady Bakewell and Lady Pinnock, to ensure that the replacements promised under the terms of the voluntary agreement are realised. This amendment would also require the replacement property to be in the same area and of the same tenure as the property sold. The agreement reached with the housing association sector is that, nationally, for every house sold a new one will be built—I am happy to confirm that again—which will increase the overall number of much-needed houses in this country. However, the type of home and where it should be are decisions that are best taken by those housing associations, many of which will be local and will want to replace those homes locally.
Lord Kennedy of Southwark
Does the noble Baroness think it is regrettable that if this carries on, we will lose social housing in the centre of London? The risk is that it will go to the outer London boroughs, and here in the centre of London there will be less social housing for rent.
Baroness Williams of Trafford
My Lords, we have been through the various types of social housing products that are available for housing associations to bring forward. Obviously, shared ownership schemes may be very attractive for them to build. The figures that I gave noble Lords about starts and replacements in London demonstrate that over the last three years, the delivery has been two for one. I would imagine that local housing associations, including those in London, will want to provide a mix of tenure. I do not deny the point the noble Lord is making about London being so expensive.
Lord Kennedy of Southwark
The noble Baroness mentioned the figures for starts. Does she have the figures for where those starts are in London? They may not be available now, but it would be very helpful if she could provide them.
Baroness Williams of Trafford
I do not know by borough where those starts are but will, if I can, provide the noble Lord with the figures. It would be interesting to see exactly where they are.
Baroness Williams of Trafford
I thank the noble Baroness for that statistic. One of the points that we made back in the group of amendments on rogue landlords was that the vast majority of landlords are decent landlords.
Lord Kennedy of Southwark
My Lords, I thank all noble Lords who have contributed to this short debate. It highlighted the problems we have with this part of the Bill. The noble Lord, Lord Horam, said that we are not like Paris or New York where people have been priced out of parts of those cities. They are unable to live there because they cannot afford to be there. I agree that we are not there, and I would never want us to get to that situation. London is one of the greatest cities in the world, and it works because you have rich and poor people living on the same street, living side by side and getting on very well together. That is how London works. It may not be the Government’s intention, but the Bill could create a situation where people are driven out of whole parts of London, which would be bad. We cannot have everybody doing key-worker jobs or in modest or lower-paid jobs all living in outer London boroughs. That would not be right. It worries me that we will get to that situation with the policy we are pursuing today.
We will come back to this on Report. I look forward to the information on housing starts that the Minister said she will send us. It will be very interesting to know where those starts are.
Baroness Williams of Trafford
My Lords, I did promise the noble Lord information on starter homes. I will be bringing it forward in due course, but I have not got it ready for today. I have not forgotten my commitment to him.
Baroness Williams of Trafford
My Lords, I thank the noble Lord, Lord Kerslake, for both his endeavours and his amendment, which proposes an equity loan scheme for housing association tenants in place of the voluntary right-to-buy discount. I understand that part of the reason for introducing this amendment was to reopen the debate about the funding of the right-to-buy discount.
An equity loan, by its nature, is not a discount and has to be repaid by the tenant. This is a very different offer—more akin to the Help to Buy scheme than to an extension of the right-to-buy scheme. This will inevitably make home ownership less attractive to the very tenants we are trying to reach: those on lower wages who are being priced out of home ownership because of high house prices.
We had a clear manifesto commitment to extend the right to buy to housing association tenants, and the voluntary agreement with the sector will give 1.3 million families the chance to purchase a home at right-to-buy level discounts. Our extension of the right to buy is about offering housing association tenants the same opportunity as council tenants. Providing equity loans to tenants, as proposed under this amendment, would not provide the same offer to them. We have been clear that housing associations will be fully compensated for the right-to-buy discounts offered to tenants and that this would be funded through the sale of vacant local authority high-value assets. They will be fully compensated. There are billions of pounds locked up in local authority housing assets. It is only right that when they become vacant they are sold, enabling the receipts to be reinvested in building new homes and supporting home ownership through the right to buy.
Lord Kennedy of Southwark
Why is it only right that they are sold? They should be used for other families who need social housing.
Lord Kennedy of Southwark
In your remarks, you said that it is only right that these houses are sold to provide receipts. Why are they not just used for other families who need a large council house?
Lord Stunell
My Lords, I hope that the Minister did not get the impression that, if a high-value house becomes free in Stockport, it is then not ready to be let to another tenant on the waiting list. It is not surplus property, it is empty property in the course of transition from one tenant to another. If the incoming tenant is to be told that the property is not available because it is being sold to participate in some government confiscation scheme, that does not provide the social welfare outcome which this House wants.
Lord Kennedy of Southwark
I grew up in a large council house in Southwark and my family benefited very much from that. Denying other, larger families that is just wrong.
Baroness Williams of Trafford
My Lords, as I said, we are coming to the detailed mechanism of high-value assets soon and that is certainly one thing we will be discussing. It is very important that noble Lords make these points at this stage in the Bill, because they will form part of the Government’s consideration. I am not, in any way, dismissing the points made. We will need houses and dwellings of different sizes, but the mechanism of how that will work will be set out in due course.
This is probably not the best hour or the best group of amendments in which to start discussing this, but I should like to address the points of the noble Lord, Lord Kerslake, about the value for money assessment. We are clear that we have done the right level of analysis to support the decision-making at each stage and to ensure that proposals would offer good value for money. We have done an economic analysis for the right-to-buy extension, taking into account the fact that that would be funded from the receipt of vacant high-value asset council sales, which shows that there would be a clear economic benefit. We have also undertaken an analysis for the voluntary right-to-buy pilot.
“( ) In carrying out the duty to monitor compliance under subsection (1), the Regulator must make a report where a community-led housing provider, as defined in Schedule (Community-led housing schemes), or a tenant management organisation, as defined in section (tenant management organisations), has used grants made by the Secretary of State to facilitate or meet a right to buy discount.”
Lord Kennedy of Southwark
My Lords, looking at the time, I intend to be very brief in moving my amendment, your Lordships will be pleased to know. Amendments 59A and 82B in this group are in my name and that of my noble friend Lord Beecham. Amendment 59A seeks to add a duty on the Regulator of Social Housing so that, when monitoring compliance,
“the Regulator must make a report where a community-led housing provider … has used grants made by the Secretary of State to facilitate or meet a right to buy discount”.
Amendment 82B would put in the schedule exactly what is meant by community-led housing scheme, for the avoidance of doubt.
Noble Lords all around the Chamber have expressed support today for co-operative and community-led housing, but without my Amendment 59A we would have very little information about what is happening in this part of the social housing sector as a result of the policies being implemented in this part of the Bill. The group also includes a clause stand part debate. With that, I beg to move.
Baroness Williams of Trafford
My Lords, I will be equally brief. Amendment 59A, in the name of the noble Lords, Lord Kennedy and Lord Beecham, would require the Regulator of Social Housing to monitor and report where a community-led housing provider or TMO had used grants made by the Secretary of State in respect of a right-to-buy discount.
Let me be clear again that TMOs are not part of the right-to-buy arrangements. Under the voluntary right to buy, the landlord/tenant relationship is with the property-owning landlord as a registered provider, and the tenant would exercise their right to buy against that landlord. The amendment does not make sense in that landscape. If the concern is about different tenures—social tenants and owner-occupiers—being part of a TMO, there is no reason to believe that tenants and owners could not come together in this way.
I appreciate that the noble Lords, Lord Beecham and Lord Kennedy, want to protect TMOs and other community-led organisations that are not landlords so that they continue to help tenants to play an active role. The voluntary right-to-buy agreement contains protections that allow housing associations discretion not to sell properties that are important to their communities and clients.
The purpose of Amendment 82B is to create a definition of community-led housing, but there is no need to, as it is a colloquial umbrella term to cover a range of different and distinct structures and organisations, such as fully mutual co-operatives, community land trusts and tenant management organisations. The Government very much support community-led housing, and these bodies have distinct and specific legal definitions. Fully mutual housing associations are defined in Section 5 of the Housing Act 1985. Community land trusts are defined in statute in Section 79 of the Housing and Regeneration Act. TMOs are defined through the Housing (Right to Manage) (England) Regulations 2012, Part 1 Section 3.
Additionally, the organisations are different in nature. Fully mutual housing co-ops will generally own their homes, community land trusts may or may not, and TMOs will generally act as a managing agent for housing owned by a local authority. Imposing an additional overarching definition would be unnecessary. I ask the noble Lord to withdraw his amendment.
Lord Kennedy of Southwark
I thank the Minister. That is very helpful. We put the amendments down because there is concern in the housing sector about what is happening in this clause, so her comments are very useful and welcome. I am very happy to withdraw my amendment but again place on record my thanks to the Minister for the way she handled the debates today. I beg leave to withdraw the amendment.