Housing Market

Lord Lilley Excerpts

Thursday 17th November 2022 Lords Chamber

[Lord Lilley (Con)]

My Lords, I congratulate the noble Baroness, Lady Warwick, on securing this debate and on her introduction to it. It is strange how rarely we discuss the housing crisis in this country, since I believe it is the root of most of our social problems and many of our economic ones. I have tried to raise it from time to time and have found that there has been a tendency to ignore the issue.

I once made a speech in the House of Commons which was reported in the local newspaper with the headline, “MP says cure for housing crisis is to build more houses”. I have often complained about the inaccuracy of headlines relating to speeches I have given, but I have to say that this was spot on. That was exactly what I said, and what I want to say today: the cure to the housing crisis is building more homes. I thought this was uncontentious, but the headline sparked controversy in the columns of the St Albans Observer, with people writing in to say, “How can our MP say anything so stupid as to argue that the cure to the housing crisis is building more houses? Everybody knows that it is about simply keeping house prices down, because they are artificially high”—no, they are high because there are not enough houses. It is not that the shortage is caused by the houses being expensive.

Others said that the cause of the problem was mortgage interest rates or deposits. No—however much we fiddle around and subsidise or regulate mortgage interest rates or deposits, that does not create a single extra home for anyone. We cannot by changing the price of a bottle get a quart into a pint pot. We have to build more homes.

Others said that there are plenty of affordable homes in the north of England, the regions or the nations of the United Kingdom. Even if that is true, in most of our regions the price of houses relative to incomes in those areas is still exceptionally high compared to what it was historically. Even if they had a point, who is going to force people to move to the north, Northern Ireland, Scotland or Wales? When I gently suggested to people in my old constituency that perhaps they were volunteering to move themselves, they were shocked. That was another vote lost.

We have to face these arguments and ask ourselves why we have such high house prices in this country and at this time, especially given that the rate of births is below the rate of deaths. We are not creating more households domestically to create this demand for housing. Until recently, the main driver of demand for housing was that households were becoming smaller. As people left home earlier or lived longer after their children had left home, so that there were only two instead of four in the household, or after their partner had died, so that there was only one instead of two, average household size was coming down. This was also aggravated by the sad break-up of families through divorce or separation. That used to mean we had to add 0.5% to the housing stock every year to cope with smaller households.

That has come to an end. Young people are now unable to leave home and are leaving later. In 1999, 2.4 million adults aged between 20 and 34 lived at home with their parents. By 2019, 3.5 million people in that age group lived at home with their parents. So what is the reason?

The main reason, which I suspect no one else in this debate will mention, is not migration into the south of England or London from the rest of the United Kingdom. That is often the reason given, but in the last two or three decades there has been a net outflow from London and south-east England to the rest of the UK. The inflow is from abroad. We have seen mass immigration into this country on a scale never before seen in our history. We know that the official figures from the last decade understate the numbers coming here. We found, when we asked European residents to register, that there were 2 million more of them than we knew about. Over the last decade, the official figures show a net increase to our population of 2 million from those coming to settle here from abroad.

That is equivalent to our having to build cities the size of Nottingham, Derby, Leicester, Middlesbrough, Carlisle, Oxford, Exeter, Portsmouth and Southampton, every decade, just to keep up with the net inflow from abroad. They are predominantly young people of childbearing age, so they soon have families. That is a great joy for them, but it means that the demand for housing increases. I am talking about legal migration into this country, not the boat people, whose numbers are very small compared to the scale of legal migration into this country.

We have to be honest about this and recognise that we have a simple choice. Either we continue treating this country as if it was like Canada, Australia or America, with large open spaces to populate, or, if we allow a continued net inflow of 200,000 or 300,000 into this country, we have to build extra houses on top of the demand of the domestic population that is already here. We can strive to reduce the inflow, but we will still have to build a lot of houses and there will still be a lot of objections to that housebuilding. I do not mind which side of the debate people take, as long as they are honest about it. If they say, “We want to see mass immigration into this country and we are prepared to build all those extra properties every year—the equivalent of all those cities every decade”, that is fair enough, but they may oppose that.

In my constituency, I invariably found that the Lib Dems both criticised me when I raised the issue of immigration and opposed every building project in the constituency. Before the last election in which I stood, the great and good 1,000 people who belonged to the civic society in my constituency threatened to run a candidate against me, specifically on the issue of housing, if I did not agree to oppose all new housebuilding in the constituency.

This is the sort of pressure which Members of Parliament face. I stood up to it. They eventually backed down on the condition that I held a big public meeting during the campaign, at which they would organise opposition to housebuilding in the area and expose me as someone who would not oppose it. I was with the other candidates, and I opened by saying that this was a moral issue. Did we want homes for our children somewhere near to where we live, or not? Did we think the next generation had to live at home until it was probably too late for them to form a family, or not? We have to accept the building of houses and find the least bad places in which to build them. We must not put our heads in the sand and pretend that they are not necessary. Because I took a moral position, the rest of the candidates were forced to follow suit. By the end of the evening, 400 people who had arrived at that hall, screaming that we should not have any more housebuilding, had largely accepted that we should.

We have to face up to this opposition to housebuilding, and we have to be honest about it. I believe too that we need to reduce the net inflow from abroad if we are to make the problem manageable. We cannot do what too many people try to do, pretending we can have massive immigration into this country and not build the extra homes this will require.