Housing

Lord Teverson Excerpts

Thursday 8th July 2010 Lords Chamber

[Lord Teverson]

My Lords, it is a great pleasure and privilege to congratulate the noble Lord, Lord Gardiner of Kimble, on his first speech. One of the great things about maiden speeches is that we old lags or people who have perhaps been here too long—not me, of course—can learn some of the important principles. We should talk about something of which we have authoritative knowledge; we should show that we practise what we preach; we should be concise and clear; and we should not tempt the Front Bench to stand up and remind us of the time. It was a very clear and excellent speech. It also shows why it is important that the noble Lord, Lord Gardiner, is here. His experience from being deputy chief executive of the Countryside Alliance will mean that rural affairs are strongly advocated here, which is extremely important.

I come from Cornwall myself and, too often, such areas are forgotten. The Teverson family comes from Suffolk, so we know that area as well. I know the noble Lord also has great political experience, maybe not from the green or red Benches, but from having been adviser to, or worked closely with, several Members of this House, including the noble Lords, Lord Fowler, Lord Baker and Lord Patten of Barnes. He has great experience and we very much look forward to his future speeches and contributions.

I was also pleased that the right reverend Prelate the Bishop of Gloucester mentioned Stonehouse in Gloucestershire. I once lived there. Stonehouse was the first ward in which I ever stood for public election. I was well and duly truly defeated. It put me off so much that it was another 25 years before I was elected to a local authority, although I served in the European Parliament on the way. Gloucestershire is a great county and, like so much of the south-west, faces a big issue in rural housing. That is why this debate that the noble Baroness has brought forward today is so important.

If the House will indulge me, I will deal with a very small area of this subject. I declare an interest as a member of a housing authority, namely Cornwall unitary authority. I will not talk about Cornwall in particular, although it has problems as great as those of any other rural area. The area that I want to talk about is one that I have not had a problem with. I am very lucky. I have a beautiful house in a rural area of Cornwall. More importantly, perhaps, I have a mortgage on it. This is the burden of the middle classes but it is something that it is very difficult for many people to get hold of these days. That is true of young people and the general population who are trying to buy ordinary houses, but purchasing affordable houses is almost impossible at present.

There are two factors. One is the credit crunch, which makes the availability of finance difficult. One of the outcomes of that in a market system—a good system, generally—is that mortgages are given to the people and properties that it is easiest to give them to. Those properties definitely do not have Section 106 agreements or other restrictions. Mortgages are given to families who can prove that they have good incomes and can put down a large deposit on the relevant property. However, the same does not apply to affordable housing. Very few building societies or banks are keen to lend money to people to buy affordable houses. Certainly in Cornwall there is often a protracted negotiation about the detail of the Section 106 agreement attached to an affordable home. That means more time is required and someone has to pay for changing the Section 106 agreement. It acts as a great barrier. But even if people have the necessary deposit, if a house has a covenant which restricts its resale if the worst should happen and the mortgage is defaulted on, they will pay a higher interest rate and a larger deposit. The people who are asked to pay that are the less well off and those least able to pay.

I first encountered the chains of a mortgage back in 1975, when we bought our first house for about £11,300, if I remember correctly. However, at that time a range of sources of finance were available. One of them was local authority mortgages. I looked up this species of loan on Google—I am sure that other noble Lords never do their research on Google, but I am afraid that I do—to see what had happened to it. Following its demise in the 1980s, I was pleased to see that it had had a slight revival. I pay tribute to the previous Government for starting to ease some of the interest rates that could be charged on these instruments, thus making them a little more affordable and commercial within the market if local authorities could afford to offer them.

I am certainly not advocating that we should go back to the old local authority mortgages which could be used for any type of housing. However, I would be very interested to hear about the coalition Government’s policy in this area, if there is one. There is no reason why there should be one yet, but surely there is a strong case for local authorities again to provide finance for affordable housing—not ordinary housing—whether that is through loan guarantees or the provision of the money itself off-balance sheet. They could provide administration and guarantees or allow standard financial institutions to do that. That would be a tremendous step forward. At the end of the day, the finance is at the end of the supply chain. Even ordinary private developers building affordable housing as part of a broader scheme will not build it if they cannot move the bricks and the mortar of the affordable housing area. They will be put off the whole scheme if that is the outcome. Noble Lords have raised other important issues but I think that there is a role for local authorities in enabling finance to happen so that families—particularly those in rural areas—who need housing and cannot afford it, as the noble Lord, Lord Gardiner, mentioned, can move forward, cross that barrier and obtain a house for their families, as most of us have done throughout our lives.