Lord Taylor of Goss Moor
Main Page: Lord Taylor of Goss Moor (Liberal Democrat - Life peer)Housing and Planning Bill
Lord Taylor of Goss Moor Excerpts
Lord O'Shaughnessy (Con)
My Lords, I am grateful to the noble Lord, Lord Beecham, for moving this amendment—not, unfortunately for him, because I support it, but for the opportunity to spend a little time, I hope not too long, considering an underappreciated and potentially very important part of the Bill. I am also grateful to the noble Baroness, Lady Bakewell, for giving us an example about how it might work in practice.
In previous sittings of the Committee, my noble friend Lord Horam said that what we always need to remember in this debate is that this is a housing crisis caused by lack of supply, and it is through that lens I am thinking of how custom and self-build could contribute to solving that problem. This is an area of great potential. According to the impact assessment, only 8% of English homes—just 5,000 to 8,000 a year—were built under custom or self-build under the current regime compared with about 30% in the US and 50% in some parts of Europe and Scandinavia. At the moment, it is a cottage industry, but, as other countries show, it could be a game-changer. It could be the biggest deliverer of housing in the country. Critically, it offers an opportunity for a diversity of design that is much more sympathetic to local surroundings than perhaps is the case with some of the big builders, which produce houses to a template. One of the main reasons that people object to local housing is because it does not fit into the local vernacular.
According to Ipsos MORI, around 1 million people would like to take action to build their own homes. That might be a little optimistic, but it is an indication that there is a real groundswell out there. Indeed, the housing vanguards that the Government have established seem to have been quite popular, with an average of 80 people signing up to the registers of land to build on within the first four months of their opening, which I think coheres with what the noble Baroness, Lady Bakewell, was saying. Some interesting examples are given of what that has meant.
If this is what we want to see happen, we have to will the means as well as the ends. The truth is that the crash has been brutal to SME housebuilders who will ultimately deliver many of these houses. They declined by 49% between 2006 and 2013, and as the noble Baroness, Lady Bakewell, said, they find it difficult to access finance because they are undercapitalised. This is a really critical aspect which I think is underappreciated. There is also the factor of planning delay. The FMB 2015 House Builders’ Survey of the Federation of Master Builders showed that 68% of respondents said that planning delay was significantly impacting on their ability to deliver houses. So that is the backdrop against which we are looking at this part of the Bill.
Turning to the amendment, I feel that at best it is not necessary because there are provisions for making sure that serviced plots are made available with the costs recovered by the local authority. That is my reading of it, but it would be useful to have clarification from the Minister. At worst it could become another barrier, and I think we need to be very conscious of building extra barriers into the process when we are trying to liberalise the system. We need to make it easy for local authorities to embrace the idea, and indeed make it easy for potential homeowners to take this opportunity.
My one concern with where we are in the Bill is about the timetable for compliance by local authorities, or rather the lack of it. I would like us at least to consider whether the timetable ought to be on the face of the Bill, but we have been told that it will be set out in secondary legislation. It would be useful to understand what the timetable might look like so that we know that local authorities will be held to account for their performance in delivery. If the timetable is not tough enough, I am sure that is something noble Lords will want to consider while we are looking at the primary legislation. It would also be interesting to hear about what the Government are doing to provide capital support for SME builders. When we talk about self-build, it is not literally self-build. While there will be a few handy people who can build their own walls, most will commission a local architect and builder, but as we know, there are not enough of them. A variety of schemes are available to help the big builders capitalise, but not enough for the smaller ones. What will the Government do in that area?
As I say, the Government are providing the right mechanisms, but we need to will the means for this to happen. There is a right for citizens, which is fantastic, but we need a time-bound obligation to be put on local authorities as well as some financial support or at least underwriting to help the builders. I look forward to hearing the Minister’s comments.
Lord Taylor of Goss Moor (LD)
My Lords, I want to associate myself with the comments just made and those of others who have spoken to this amendment. My own view has long been that in looking at the underprovision of housing in this country, the primary issue is not enough land being made available for the homes we so desperately need. Particularly for large parts of the market, the unaffordability of a home is generated by the cost of land in a market which has been so rationed and underprovided; the cost has escalated out of all proportion. Many people in this country can afford the bricks and mortar of a home because they do not cost that much. It is the price of the land that has made those homes unaffordable.
In other parts of Europe and indeed around the world, self-build or commission-build is more common. There is confusion about these terms: we are not necessarily talking about people putting in the time and labour themselves, because they may well commission an architect and a builder to design and build the home of their dreams. If they can get a plot, not only can they get the design that is right for them but such designs often have much higher environmental qualities than would otherwise be delivered. Furthermore, this takes out the profits made by speculative land developers and large housebuilders. Small local housebuilders will be prepared to build at rates of profit that the big firms would not even consider.
As I say, in the rest of the world a much higher proportion of high-quality homes are being brought forward in this way, precisely because land is accessible and available. When my former secretary from when I was an MP retired, she and her husband sold an old farmhouse outside St Austell and looked to build a home appropriate to their needs in old age, on a plot anywhere around St Austell. They were unable to get a single plot on which they could build such a home because the housebuilders who owned the plots said, in many cases, that they were not prepared to have them build their own home to the high environmental standards they wanted. Others said, “You can build a home for yourself there, but it has to be our design. It has to look exactly like all of the other houses”. They ultimately ended up building a home of their own in France. The big difference was that land was in ready supply.
What the Government are seeking to do is right. My view—the Government are well aware of this—is that, to do it on the scale we need at land prices that will be affordable for many people, we need to enable people to have serviced plots in fantastically well-designed new settlements, where the value of the land has been captured in making a great place, rather than taken by the landowner for their place in Bermuda—or, if it is on a large scale, their helicopter and island near Bermuda.
The amendment touches on an important issue, and the Government are right to go down the route of making it easier for self-build and commission build to take place. To do that, we need serviced plots. It is right that this should be part of the obligations on local authorities to bring land forward. But that will not by itself answer the question of affordability for the many people who will want to do this if we cannot find ways to make land available at a price that will allow those who may have only modest means, but can afford the bricks and mortar of a home, to get a plot on which they can afford to build.
Viscount Younger of Leckie (Con)
My Lords, we have debated with some intensity in Committee so far the need to build more homes, covering a range of tenures. There can be no doubt about the Government’s commitment. Promoting and supporting self-build and custom housebuilding is important in delivering that commitment. Doubling the amount of self-build and custom housebuilding by 2020 will not only result in more homes, but provide much-needed business for the smaller householder and housebuilder. More custom build housing will help drive innovation in alternative building techniques, and support and create new jobs.
We have made a positive start. The Self-Build and Custom Housebuilding Act 2015, which was guided through this House by the noble Lord, Lord Best, will come into force on 1 April this year, when local planning authorities must hold a local register of people seeking land for self-build and custom housebuilding, and have regard to that register when carrying out their housing, planning, land disposal and regeneration functions. This Bill is the next step: its self-build and custom housebuilding provisions will provide a much-needed definition, establishing that the essential criteria of all self-build and custom housebuilding is that the individuals have a significant input into and choice over their finished home, and intend to live in it as their main or sole property.
I know that one of the most significant barriers preventing more people building or commissioning their own home is access to land. As the noble Lord, Lord Taylor, pointed out, this is very much an issue. We appreciate his general support for this part of the Bill. These provisions will place a new duty on local authorities, requiring them to give development permission—suitable for self-build and custom housebuilding—for enough serviced plots of land to match the demand on their register. But I recognise that there may be some areas where the demand for self-build and custom housebuilding will far outstrip the available land supply. So, to ensure that we continue to protect the environment and build only sustainable developments, we must be able to exempt relevant authorities that are simply unable to permission sufficient land to meet demand for self-build and custom housebuilding.
As a result, Clause 10 will insert a new section into the Self-Build and Custom Housebuilding Act 2015, which will enable relevant authorities to apply to the Secretary of State for an exemption from the duty to permission sufficient land to match demand for self-build and custom housebuilding in their areas. The detail of the exemption will be set out in regulation.
Lord Horam
I am sure that the noble Baroness will raise the issue if she wishes to. I will certainly not stop her from giving one of her very eloquent speeches.
The point I wanted to make was that, historically—the noble Baroness, Lady Royall, is right—there has been a disproportion between the number of houses replaced and the number lost. However, that has changed in recent times and we are now getting one for one. As I was saying, the noble Lord, Lord Cameron, is right that this whole exercise is designed to galvanise housing associations into doing very much better. We know from the experience that we have had with housing associations that some are very good, some are very large and some are quite small and sleepy. Frankly, to some extent, there should be some merging in the housing association world, and there should certainly be a greater degree of activity than has sometimes been the case in the past. I look forward to that.
Finally, I agree with the point that the noble Lord, Lord Best, made, that there is a danger of overregulating in this area simply because of the “Office for National Statistics problem”, if I may put it like that, of it being part or not part of the public sector. I doubt very much whether any amendments of the kind that have been tabled here would be welcomed by the federation and housing associations, and I doubt that they would be appropriate. It would certainly not help them to get out of the Government’s clutches. The Government want them to leave their clutches and they want to get out of them, otherwise it will lead to all sorts of problems.
What I hope will happen is that, as a result of this debate, noble Lords’ concerns will be heard not only by the Government but by housing associations, and we will in effect be nudged—if I may put it like that, using the psychological term of the nudge factor—into recognising that these issues are of concern to people in both rural and urban areas, and I hope that housing associations will take them fully into account, as I expect they will. None the less, I believe that the Government are right to proceed down the path that they are following.
Lord Taylor of Goss Moor
My Lords, I draw noble Lords’ attention to my list of interests but I declare a couple in particular. One is that I am president of the National Association of Local Councils, which has a particular interest in rural communities. The second is a past but recent interest in that I was chair of the National Housing Federation for six years until September, therefore covering the period during which the voluntary agreement was negotiated with the Government.
I particularly associate myself with the comments of the noble Lord, Lord Cameron, and especially with those of the noble Lord, Lord Best, about some of the background to this issue. I was disappointed when the Conservative Party put forward the right-to-buy policy in the run-up to the general election and was even more disappointed to see it feature in its manifesto. However, I have to accept that it featured in the manifesto and, inevitably, the policy will be delivered. My disappointment stems from the fact that, if the Government feel that they have those kinds of sums to spend—or, more accurately, are going to require local authorities to sell houses in order to have those funds to spend—there are better ways of investing the large sums involved than giving a one-off benefit to a particular tenant who, at a particular time, happens to be in a certain property. There are many others who cannot afford a home and who are not in that privileged position.
None the less, that was not the context in which the voluntary agreement was negotiated. It was negotiated in the context of a Government with that manifesto commitment and a clear intention to deliver it, and they would always be able to see it through the Commons with their majority. I do not think that this issue would divide Conservative Members of Parliament in principle but they might have concerns about elements of it, and it is a particular element that we need to address today.
I take the view of the noble Lord, Lord Best, that it is extremely important that this House always defends the principle that the charities that are housing associations —the great majority are charities—are independent organisations. There are many reasons for defending that principle of independence. It is extremely important to the organisations themselves. It bears on their history and on their ability to do what is right for their tenants and their communities. It has produced enormous diversity and, through that diversity, has allowed them to face many different challenges. The negotiations around the voluntary agreement were above all intended to preserve that principle of independence but they also achieved an important series of exceptions in principle. Those were acknowledged and therefore there was no question that housing associations would be able to make decisions about whether, in particular circumstances, a right to buy was appropriate.
The portable discount is an important element of that. If tenants in general have a right to buy and the discretion to refuse is with the housing association, it seems to me that that discretion cannot lead to a particular tenant being disadvantaged compared with other tenants. Therefore, I accept the principle of the portable discount in the circumstances in which we are now.
However, I believe that the circumstances of rural communities and villages are exceptional. In 2008, I conducted a review of rural planning for the then Government. One thing that I particularly focused on was the delivery of affordable housing in small rural communities, and the importance of that was clear. Many of these communities had seen affordable housing stock lost—not just council houses which had been sold but old farmers’ cottages. In the past these cottages had often been rented out by landowners but they were gradually sold off at very high values to people who might be retiring to the community or might have a holiday home there. Unlike what had traditionally been the case with those more affordable properties, the people who bought them did not work on the farms or in the school, the shop, the pub or the local businesses. They did not have children who would go to the local school and they did not spend money in the shops and the pubs. Therefore, the risk was that these rural communities would become more and more unsustainable. They were becoming enclaves of wealth and retirement and enclaves of holiday homes, and they no longer supported a living, working countryside.
I observed that that had become of huge importance to many villages and parishes. We saw a transformation in the willingness to address the problem through the delivery of affordable housing. Increasingly, we saw communities support small numbers of affordable homes on exception sites, often with the support of the landowner, who would get little, or in some cases nothing, for the land. Places that traditionally had always opposed development were willing to support it for the delivery of affordable homes. In the Living Working Countryside report, I argued that we should extend that principle further and empower these communities to take those decisions through the parishes—in effect, neighbourhood planning. We have encouraged that and I very much welcome the fact that the last Government empowered communities in terms of neighbourhood planning.
I talked about empowering communities because it was evident that when people looked at their own issues, such as keeping the school open, how the children would be able to live and work within the community, and how the pub and the shop would be sustained, they recognised the central importance of people on lower incomes—working people within rural communities —being able to live within those communities. On sustainability grounds, frankly it makes no sense that these communities have become places for retirees—places where the land that gets farmed at all is farmed by people who live in the town because they cannot afford to live in the village. If care is provided at all, it is provided by people who live in the town because they cannot afford to live in the community. Therefore, that principle seemed to me on every ground absolutely fundamental, and local communities supported it.
However, above all local communities supported one principle, which was that the homes should be affordable for the community in perpetuity. They supported that because the landowner would not make land available if someone was going to make a profit from the sale of a house a few years later and it was going to become just another retirement home or just another done-up cottage to be used as a holiday residence. The community would not extend its support for that sort of planning through neighbourhood plans and, in the past, parish plans. I saw communities go through the process of finding the right site and welcoming the homes that were built, but it was always understood that these would be affordable in perpetuity.
Some of those homes were guaranteed to be affordable in perpetuity because the landowner was wise enough to put a clause in the contract on the sale of the land. In other cases, the landowner was far-sighted enough to include it as a planning condition. However, in many communities that was not the case. The houses were understood to be affordable in perpetuity, and it was understood that there was no right to buy. There was some discretion but a process with the regulator had to be gone through if the sale of a home was to take place. However, without the discount there was no great incentive for it, and these homes were not sold off.
We now have a different circumstance in two respects. First, the discount offer makes it infinitely more likely that tenants will come forward, if not with an eye to making money for themselves, very often with an eye to wanting to secure the home for their children—an understandable human response. Secondly, with the rent cuts and the falling away of grants, housing associations will inevitably be aware that if a sale takes place, it is unlikely that it will fund one-to-one replacements; it will actually fund a multiple of that. Therefore, if they sell one house, the truth is that it will, as a result of the rental streams and so on, allow multiple investments in new housing, potentially somewhere else.
Lord Taylor of Goss Moor
I want to be absolutely clear on this point: the National Housing Federation has never supported the requirement on local authorities to sell their stock to fund this. The offer that was on the table prior to the agreement was that there would be a statutory obligation on housing associations to sell and no statutory obligation on government to put in place the funding of the discount. The change was that there was no statutory obligation on housing associations to sell, but there was a statutory obligation on government to fund any discount. That was the change that was negotiated and that change protected the position of housing associations and altered in no respect the government requirement on local authorities to fund it, because that was in place in either case.
Lord Taylor of Goss Moor
Will the Minister reflect further with her colleagues on the contradiction in what she has just said? She spoke about neighbourhood plans and local communities setting the tenure, but the housing associations would make a decision on the sale without any reference back to the community. The engagement between the housing association and the community is important in that circumstance.
Baroness Williams of Trafford
My Lords, maybe I did not articulate it properly. The engagement between housing associations and councils with neighbourhood and local plans adds to the mix of a happy community or one that feels imposed upon. Local housing associations are very good at knowing what their communities want and what future tenures will look like.
The noble Lord, Lord Best, asked me about the Government intending to reverse the ONS classification decision. The deregulatory measures in the Bill are designed to address the reclassification of housing associations by the ONS. The Government would like the ONS to review its assessment, in due course, in the light of the effect of these measures, but it is independent and we cannot tell it what to say.
Amendment 56A, from the noble Lord, Lord Tope, and the noble Baroness, Lady Bakewell of Hardington Mandeville, would put an exemption in the Bill, but housing associations already have the discretion not to sell under the terms of the voluntary agreement—in the case of properties owned by community land trusts. This Government very much support community-led housing and we recognise the significant role that community land trusts can play in delivering locally led, innovative housing development, an issue we touched on at Second Reading. I fully appreciate that many noble Lords think that as well, but I find these amendments slightly odd. Surely, the way to protect community land trusts is to give them the freedom to manage their affairs in the way they think best for the community, rather than creating centrally driven regulations that will control the way they operate.
Under the voluntary agreement, community land trusts will be able to offer tenants access to affordable home ownership through a right-to-buy discount, the cost of which would be paid by government. This frees up capital which the trusts can reinvest, should they wish, as part of their significant contribution to the development and management of new affordable homes. I stress again: if they do not want to sell individual properties they do not have to, as my noble friend Lord Young said.
These amendments would take away the freedom of community land trusts to realise capital to reinvest, with full compensation from government for the shortfall, and the freedom to decide which properties could be sold. As with Amendment 57C, I do not believe that this would protect community land trusts. Rather, it would fetter their discretion and inhibit innovation and investment.
I thank the noble Lords, Lord Kennedy of Southwark and Lord Beecham, for their Amendment 59B on tenant management organisations and community-led housing schemes. The Government very much support community-led housing and recognise the important role that TMOs play in helping tenants to take an active part in the management of their home. The proposed new clause in Amendment 59B would mean that housing associations could not implement the voluntary right-to-buy agreement where TMOs have been set up and registered with the HCA. It would also prevent such organisations accepting payments made by the Secretary of State in respect of right-to-buy discounts. To be absolutely clear, tenant management organisations are not registered providers; they are management organisations which are subsidiaries of a registered provider. They are not, and cannot be, registered with the HCA, because they cannot own stock and are therefore not landlords. No grant funding to cover the cost of the discount will be made to such organisations under the voluntary right to buy.
My concern is that these amendments would, in effect, create a loophole in the implementation of the voluntary right to buy, whereby the setting up of a TMO would mean the voluntary right to buy could not operate. That may be what is intended but, if so, it will hinder the Government in delivering their manifesto commitment. Our aim is to ensure that social tenants can access available home ownership opportunities regardless of their landlord. It would be wholly unfair to tenants who want to take the opportunity to buy a home of their own to be prevented from doing so merely by the existence of a TMO.
Amendment 56B in the name of the noble Lord, Lord Berkeley, would exclude housing on the Isles of Scilly. I have been to the Isles of Scilly, very beautiful place that it is, and I understand the concerns about the loss of social housing on a small group of islands. But I have been clear in our discussion over similar concerns in rural areas that housing associations will have the discretion not to sell. They will be able to make this decision based on their knowledge and understanding of the needs of the local community. We want equality of opportunity for social tenants; it should not be denied to them just because they live on the Isles of Scilly.
Amendments 57A, 57B and 57D would require receipts from the proceeds of sales to be reinvested in the same area as the property being sold. We believe that these decisions are best taken by housing associations in light of local conditions and need. By seeking to constrain their discretion from Whitehall, we are limiting their ability to manage their assets to deliver their business and their charitable objectives.
Amendment 60A in the name of the noble Baroness, Lady Grender, would introduce a community right of appeal where there was local opposition to a sale under the voluntary right to buy. I cannot accept this amendment; housing associations know the needs of their local community and we believe that they will act in their best interest. As set out in the voluntary agreement, they will have discretion over whether to sell a property.
I thank all noble Lords who have taken part in this debate. I know that the noble Baroness, Lady Hollis, wants to come in, but I hope that with these assurances the noble Lord will feel able to withdraw the amendment.