Housing: Spending Review

Lord Taverne Excerpts

Thursday 4th November 2010 Lords Chamber

[Lord Taverne]

My Lords, I shall make a brief comment on intermediate housing. I must declare an interest because I have a son-in-law who is active in a company that provides low-cost housing in the private sector.

There is a very large gap between the provision of social housing and private housing in the open market. There is a very large cohort of people who do not qualify for housing benefit but who cannot buy. In London, for example, in October 2009, the average cost for a first-time buyer was £248,000. An LSE study shows that the main reason why teachers in London schools leave is housing. Overall, 35 per cent of working households aged 20 to 39 find themselves in this category. One of the results is that there are some 3 million people aged 20 to 34 who now live with their parents and in addition some 2 million people aged over 18 live rent-free with their families or friends, a figure that is four times higher than 10 years ago.

One of the needs is houses to buy for those on modest incomes who cannot afford market prices and who do not qualify for housing benefit. In London, it has been possible to persuade a number of councils to sell plots for development at below market prices since they provide a start on the ladder of owning a house for key workers such as teachers, nurses and the police, and for those on modest incomes in the private sector. There is a limit on the earnings of those who qualify under this scheme. In London, as a result of this attitude by councils, it has been possible to provide one-bedroom flats in Camden, Hounslow and Ealing to be sold for £190,000 compared with the market cost in Camden of £305,000. Who are the beneficiaries? Their average income is some £30,000 per year. The average deposit they pay is some £20,500 and their average age is 31. It seems clear that where this has been achieved, it is of considerable benefit to society. The Government could help here. One obstacle is the planning process. At present, there is no focus on intermediate housing as a use class in its own right, so I hope the Minister will take note and initiate the appropriate action.