Housing and Planning Bill

Lord Palmer of Childs Hill Excerpts

Tuesday 26th January 2016 Lords Chamber

[Lord Palmer of Childs Hill (LD)]

My Lords, shortage of housing is largely due to the slowness of developers in bringing land into use. I hope the Minister, when replying, will deal with the problem of large holders of land for development, often with full planning permission, who are slow to develop the properties.

Are there any examples of developers developing for sale on a single site of more than 150 homes per annum? I understand it is said that you cannot sell out a large site due to the absorption problem of sales of 100 to 150 per annum. This does not happen, of course, on small sites. You can see their logic: it is about being certain of sales and keeping up the price of their built stock. We need the Bill to tackle how to make it uncomfortable and unprofitable for hoarders of housing land. Without these actions, all the smooth words will not deal with our shortage of accommodation. Developers build to demand; they do not build and then find demand. Developers will have seen two or three downturns and other developers go bankrupt. In that climate, I reckon that few will rise to meet the demands.

It has been reported that the four biggest companies in the industry in this country account for more than 450,000 of the plots. It is not that they have insufficient funds: they are sitting on £947 million in cash and declared or issued more than £1.5 billion in payouts to shareholders in 2015. It was further reported that the nine housebuilders in the FTSE 100 and FTSE 250 hold 615,152 housing plots in their land bank. This is four times the total number of homes built in Britain in the past year.

How are the Government going to address the scandal that our biggest housebuilders, the ones I mentioned, possess enough land to create more than 600,000 new homes? This is not a scenario that will provide 300,000 units across the country, or the 63,000 said to be needed in London.

The theme running through the Bill is to make everyone homeowners. Not only is this impossible, not only are there vast numbers of people in London who will never be able to afford a £450,000 starter home; the Government, in describing unaffordable starter homes as affordable housing, are guilty of a dereliction of duty to provide social rented housing. The description of “affordable” reminds me of the words of Thucydides, writing about the Peloponnesian war:

“To fit with the change of events, words, too, had to change their usual meanings”.

Thus, the Government are driving a coach and horses through what has been and is the true definition of affordable housing.

Other noble Lords have spoken about the interaction of starter homes and Section 106 contributions to affordable housing. I hope the Minister will elaborate on how they will interact. Surely the discount on starter homes should be more permanent, as other noble Lords have mentioned.

The Government are apparently convinced that home ownership is good but home rental is bad. Not everybody wants the permanence of home ownership, which by its very nature harms the economy by making the labour force less mobile and less likely to move to work. London has always been a city where rich and poor live close, or fairly close, together, which is the strength of mixed communities. I have heard it compared recently to Paris, where poor people are in the banlieues on the outside and richer people live closer to the centre.

What is needed in the Bill is incentives against land banking by developers, enforcement of expiry dates for planning permission and, on renewed application, no certainty that planning permission will be granted. Many developers think that even when their planning permission expires, they can come back for renewal. I have sat on a planning committee, and the planners say, “Oh, well, they were given permission a year or two ago. You therefore have to agree to renew their planning application”, because the objections were always overturned at the time. That is what developers do: they sit on the land until the price of property goes up, while there are not enough houses in this land. If none of that forces land into development, we need an annual land tax on undeveloped land so that it becomes unprofitable not to build the homes that we need.

Other noble Lords have talked about the lack of published regulations relating to the Bill. I suspect that that is because they have not even been written yet. It is a disgrace to bring a Bill to this House at that stage. This Bill fails on many fronts, and a lot of work needs to be done on it in Committee.