Housing: Young People

Debate between Lord Lilley and Lord Best

Thursday 14th March 2024 Lords Chamber

[Lord Best (CB)]

My Lords, I thank the noble Lord, Lord Young of Cookham, not just for securing this debate and getting it off to a brilliant start, but for his decades of highly distinguished policy action in addressing key housing issues. As usual, I agree with his words of wisdom so eloquently delivered today.

This debate is very timely: the housing crisis for those with nowhere to go represents a national emergency that demands our urgent attention. It is gratifying to hear just how much we all agree on the urgency of the situation. I declare my housing interests, as on the register. Currently, I chair the Devon Housing Commission. Noble Lords may think that acute housing shortages are a problem for London and the big cities, but they could hardly be more extreme than in the beautiful county of Devon. Fewer and fewer young people brought up in the county are finding it possible to buy a home of their own—and, over recent months, they have found it almost impossible to secure a rented home they can afford. The numbers of young households having to be placed in unsuitable temporary accommodation have increased by 100% and more over the last couple of years. Nationally, the dire situation is replicated in every locality, and there are now over 140,000 children in insecure, often highly unsuitable, temporary accommodation. This is becoming an increasingly significant part of the financial troubles afflicting so many local authorities.

A fortnight ago, many of your Lordships expressed support across party lines for a national strategy to get us out of this mess, as was championed in the Church of England’s report last year. A national strategy would set a broad vision for ending the housing crisis. It could be brought together and sustained over time by a statutory national housing committee, along the lines of the Climate Change Committee. The new committee would hold government—and, no doubt, a succession of Housing Ministers—to account.

In supporting this call for creating and monitoring a long-term housing strategy, I suggest that policymakers must prioritise the housing needs of younger households in two overarching ways: first, of course, by increasing supply overall and, secondly, by ensuring that the supply reaches those with modest incomes. Supply is the problem—

[Lord Lilley (Con)]

I am grateful to the noble Lord for giving way. Will this body dealing with a long-term strategy also consider the demand for housing? Will it have any control over the massive increase in demand coming from abroad? If not, what purpose will it serve?

[Lord Best (CB)]

Is this a debate about immigration or housing? There are two debates here. We are dealing with people who live and breathe and need a home, whom we face and talk to and meet on a daily basis. We are doing something for them, and questions of immigration are for a different debate.

It is unsurprising that there is not enough to go around when the Centre for Cities has found Great Britain to have a housing deficit of 4.3 million homes, compared with the European average. Our current arrangements for achieving a sufficient supply—at least meeting the Government’s target of 300,000 homes a year—have failed. The model used for the last 30 years has relied on a handful of volume housebuilders. These developers, irrespective of the delays caused by ridiculously underresourced planning departments, will build out only at a pace that ensures that prices need never be reduced. This means cutting production now, when higher interest rates have curbed price rises, just when we need to ratchet up supply.

We are all familiar with the well-known flaws of the housebuilder model: poor design and quality; betrayal of promises for affordable housing, green spaces and amenities; building on greenfields and avoiding brownfield sites; failing to train the workforce or to innovate; et cetera. The most recent Competition and Markets Authority report is the latest voice to support the quite different approach promoted by the Letwin review. Sir Oliver advocated that, to speed up and deliver the homes we need, local authority-owned but arm’s-length development corporations should be created, with CPO—compulsory purchase—powers to assemble and buy land on reasonable terms. These corporations would adopt a comprehensive master plan, borrow privately, fund the infrastructure and parcel out sites to social landlords, SME builders, specialist players and so on. In other words, to boost the quantity and quality of supply, Letwin recommends establishing publicly accountable development bodies that take back control from the oligopoly of major developers.

Let me turn to the ways of ensuring that the supply of new homes benefits those on average and below-average incomes—the half of the population who currently can access only a fraction of new housing supply. Top of the list comes direct development of so-called “social rented housing”: this part of the housing mix has been in decline for years. Social housing is down from 34% of the nation’s homes to just 17% because of sales of council housing and the low-level programme of new build.

On 6 February, when Secretary of State Michael Gove appeared before the Lords Select Committee on the Built Environment, he said:

“We need to aim to have a net addition of 30,000 for social rent every year”.


He noted that some would regard this as unambitious, but it sets a far higher target for social rent—for the housing associations and councils—than has prevailed in recent years. What is needed is government investment to actually make this happen.

Currently, the sector faces headwinds from higher interest rates, building safety remedial work, the decarbonisation and upgrading of older stock, and management and maintenance costs rising by more than rents. But this country now has a highly professional social housing sector that is very fully regulated and can respond to the opportunities whenever government comes forward with the necessary resources.

Increasing supply by building new homes is going to take decades to achieve availability and affordability for all. In the meantime, we need a shortcut both to tackle the temporary accommodation emergency and, over time, to enlarge the social housing pool. The Affordable Housing Commission recommended a national housing conversion fund for the purchase and modernisation of run-down, privately rented accommodation. This fund would pay for itself by avoiding the huge costs of temporary accommodation in the private sector and, in the long term, would help a rebalancing between the much-diminished social sector and the greatly expanded private rented sector. I detect signs that the Government are recognising the value of this approach: a fund mostly for refugees is operating on this basis.

Investment in social housing—including the regeneration of some existing council estates and older properties—has a big payback in reducing health inequalities, alleviating fuel poverty, saving housing benefit and homelessness costs, cutting carbon emissions and supporting education and employment objectives. The National Housing Federation’s latest report shows how investing in a really major expansion of social housing is self-financing in a relatively short timescale, so boosting affordable social housing—largely ignored in the Budget—does represent incredible value for public money.

All this is not to say that the desire of younger households for home ownership should be ignored. Owner occupation means a secure home where you can put down roots and do your own thing. Acquiring and accumulating a capital asset for your later life is a big bonus, but, most significantly, your housing costs as an owner will reduce over time as your mortgage is paid off, whereas, as a renter, your housing costs will keep rising inexorably. No wonder the Department for Work and Pensions is expressing alarm at the prospect of a massive increase in housing benefit payments when a much bigger proportion of renters retires and their incomes fall, while rents keep going up.

How can the drop in home ownership levels be reversed so fewer people fall on the wrong side of the dividing line between tenants and home owners that can last a lifetime? This inequality in life chances is particularly unfair for those young people who are paying rents in excess of the cost of a mortgage but who cannot also afford to raise tens of thousands of pounds for a deposit without parental funding.

Shared ownership—with some important tweaks—provides one solution. Government mortgage guarantees can be effective and are almost cost-free, although the latest arrears figures, following interest rate rises, show some concerning increases. To underpin first-time buying in these difficult times, restoring the safety net of support for mortgage interest to its former, more generous position would be sensible.

Meanwhile, there are huge advantages for young people of planners requiring a proportion of new homes to be designed for older people. By addressing the pent-up demand for attractive, affordable homes for downsizers—“right-sizers”—two goals are met. First, older people can move to warm, accessible, convenient and companionable accommodation, achieving huge savings for the NHS and for adult care services. Secondly, this triggers a whole chain of moves, making family homes, not least precious social housing for families, available for the next generation, helping the young people with whom we are particularly concerned in this debate.

Polls tell us that almost two-thirds of 18 to 34 year-olds say that they are more likely to support a political party that invests more in affordable and social housing. Manifesto writers, take note. Let all of us in this House recognise the crisis facing younger people today and resolve to be part of the solutions we all want.