Levelling-up and Regeneration Bill

Lord Thurlow Excerpts

Committee stage
Wednesday 3rd May 2023 Lords Chamber

Debate on Amendment 292 resumed.

[Lord Thurlow (CB)]

My Lords, I want to make a brief comment on the subject of hope value, following the very interesting observations by a number of Peers. I fear there has been a bit of a misunderstanding about the concept. Market value for property is simply what someone will pay for it, no more and no less. If that happens to include a bit of a bet that there might be an uplift for a change of use or for a planning consent or development, they may take that risk, and they may or may not be rewarded. It is a subjective matter, not something a valuer can readily simply calculate, with the usual variables. It is a risk.

What has not been mentioned in this part of the debate is that the infrastructure levy we are discussing will reduce hope value. The means by which this will occur are simply that when the infrastructure levy arrangements become clearer, the cost of the levy to a developer in that example, which is the one we have been talking a lot about, will be deducted from the price offered for the land—the farmer’s field or whatever it may be. I agree with the noble Lord, Lord Carrington, that it cannot be right to force a sale at something less than the property is worth. It is a fundamental human right, a principle of the rule of law. So, I just want that to be more clearly understood: hope value is not some evil thing; it is a risk and it may or may not be taken by a purchaser.

Levelling-up and Regeneration Bill

Lord Thurlow Excerpts

Committee stage
Thursday 20th April 2023 Lords Chamber

Lastly, I reference Amendment 262, about national parks and areas of outstanding natural beauty. The noble Baroness, Lady Taylor of Stevenage, raised them, and I agree with what she said. If we are to retain the landscape value, which is the purpose of these definitions, we must enable local people to have homes that they can afford—hence the amendment in my name. With that, I look forward to what the Minister has to say on this very important debate.

[Lord Thurlow (CB)]

My Lords, before we conclude this group, I start by saying that I do not know how any Government with a social conscience could listen to our debate for the last couple of hours without feeling an urgent desire to scrap the right to buy.

I support Amendment 438 in the name of the noble Lord, Lord Best, concerning the sale of higher-value council residential properties. We must not forget that a lot of them are very old, they may have a lot of bedrooms, and they may be under-occupied, as we understand it, and very expensive to maintain—all good reasons for selling them. But we have a chronic shortage of housing. We all know that; we have heard it repeatedly today. If you geometrically increase that to the chronic shortage of social housing, or affordable housing, it is a crisis. The proceeds of all council residential property sales should be reinvested into social housing and affordable housing. They are not, as we have heard again and again. The failure to replace the units lost by the right to buy—the noble Lord, Lord Stunell, referred to it very eloquently—is a disgrace.

The private developers, who build large numbers of residential units for private sale are under an obligation to provide an allocation under the Section 106 agreements for affordable housing, but this is abused by developers—everyone in the industry knows that. The affordable housing obligation is subject to something called a financial viability appraisal. The bigger developers are frequently huge, multi-million-pound public companies; they have the resources, expertise and firepower to employ legal advisers at the highest and most expensive level to provide the financial viability assessment that suits their purposes. There is no possibility of local authorities being able to take on this challenge, partly because they would have to do it so frequently, and partly because they are short of funds in the first place and hardly able to challenge planning applications even on a private level from time to time. I am afraid that there is very little likelihood of the numbers of social or affordable housing being increased in the short-term. I conclude that—

[Lord Stunell (LD)]

I thank the noble Lord for giving way. Does he agree that a compounding factor is that the calculations of viability studies are kept secret and that, if they were more transparently available, some of the abuse that he quite rightly refers to would be reduced?

[Lord Thurlow (CB)]

I thank the noble Lord for his comment. I agree entirely with what he says. Without being able to challenge line-by-line a financial viability appraisal, it becomes an impossible task. A lot of the elements of financial appraisals are subjective, and value is therefore very much in the eye of the beholder. I absolutely agree with the noble Lord’s comment. However, until developers are required to provide sufficient social housing, together with the contribution from government sources, I unconditionally support the amendment tabled by the noble Lord, Lord Best.

[The Parliamentary Under-Secretary of State, Department for Levellin Up, Housing & Communities (Baroness Scott of Bybrook) (Con)]

My Lords, I thank my noble friend Lord Young of Cookham for his explanation of the difficult decisions that social landlords must navigate through with the competing requirements on their rental amounts. That is really important; it is not just about building other properties—there are many other pressures that we continue to put upon them.

Amendment 241A, and Amendments 242 and 242ZA, tabled by the noble Lord, Lord Stunell, relate to the definition of affordable housing. It is right to raise the importance of ensuring that affordable housing meets the needs of those who require it. Before addressing the amendments specifically, I assure noble Lords that the Government recognise the need to increase the supply of the most affordable type of affordable housing—that is to say, let at social rent. That is reflected in our commitment in the levelling-up White Paper to increasing the amount of social housing available over time to provide the most affordable housing for those who need it. A large number of new houses to be delivered through our £11.5 billion affordable homes programme will be for social rent.

The consultation that we published before Christmas on the NPPF also recognised the need for more social rent homes. Subject to the outcome of that consultation, we are proposing to make changes to the NPPF to make it clear that local planning authorities should give greater importance in planning to social rent homes when addressing their overall housing requirements in their development plans and making planning decisions. However, we also recognise that local authorities need flexibility to deliver exactly what is needed in their area, and this may vary depending on local circumstances. We want to ensure that, when there is innovation in models for the delivery of much-needed housing to meet the needs of those who require it, we can flex the system to incorporate such innovation.

So, we are aiming for a “Goldilocks zone”. If we define affordable housing too strictly either within the Bill or the NPPF, we risk stripping local authorities of their flexibility to decide what is appropriate in their area. But, if we leave the definition of affordable housing entirely to local authorities, we risk losing the levers to drive important government ambitions, including those relating to the increased delivery of social rent. That is why we are keen to maintain the existing approach, in which the Government set the direction through policy and regulation, while also allowing space for local authorities to shape this approach to best meet local need.

It is for that reason that I am concerned that Amendments 241A, 242 and 242ZA, which are all concerned with linking the definition of affordable housing to a specific measure of income, would be too restrictive. In the National Planning Policy Framework, affordable housing is described as housing for sale or rent to those whose needs are not met by the market and which complies with one or more specific definitions. Those specific definitions encompass several different types of accommodation, to meet the housing needs of a range of people in different circumstances and housing markets.

This includes affordable rent as well as social rent homes. Affordable rent was introduced in 2011 to make it possible to deliver a larger number of affordable homes for a given amount of public investment. This has helped to support the delivery of over 632,600 affordable homes since 2010. Of that total, more than 440,000 were homes for rent and, of these, more than 162,000 were for social rent.

The definition in the National Planning Policy Framework, to be read alongside relevant Written Ministerial Statements and guidance, also encompasses a range of options, including shared ownership and First Homes, that offer routes into home ownership for households whose needs are not met by the market. These options are typically available at a price below market value. Eligibility can also be assessed in relation to overall household income, or in reference to local incomes and house prices.

In relation to shared ownership specifically, the Government understand the need to maximise the scheme’s affordability both at the initial point of purchase and over the longer term. That is why shared ownership is specifically designed to enable prospective buyers to purchase the right percentage share of their home for them, based on an affordability assessment conducted by an independent financial adviser. By linking shared ownership status as a form of affordable housing to a specific measure of income, we would be removing this much-needed flexibility to tailor the scheme to the individual circumstances of prospective buyers.

In relation to compulsory purchase orders and the community infrastructure levy—and its replacement, the infrastructure levy—the definition of affordable housing is linked to the definition of social housing in the Housing and Regeneration Act 2008. This definition encompasses both “low-cost rental accommodation” and “low-cost home ownership accommodation”. There is flexibility to add other descriptions of housing via regulations.

This ensures that regulations can then be amended so that definitions for the purposes of the community infrastructure fund can also be updated. This approach has been maintained in the Bill for those areas which touch on developer contributions: the infrastructure levy, street votes and community land auctions.

It is right to preserve this flexibility, alongside our proposal that national planning policy should place much greater value on homes for social rent. I therefore hope that the right reverend Prelate and the noble Lord, Lord Stunell, will not press their amendments.

I turn next to Amendments 262 and 500 in the names of the noble Baronesses, Lady Pinnock and Lady Taylor of Stevenage. These amendments seek to enable local authorities to mandate that new housing under their jurisdiction be affordable; to define “affordable” for that purpose; and to enable Ministers to set legally binding targets for the construction of social housing.

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[Lord Shipley (LD)]

My Lords, I agree strongly with what the noble Lord, Lord Carrington of Fulham, just said about Amendments 312G and 312H, as well as with what the noble Baroness, Lady Andrews, said about them. This is a particularly serious matter and I hope that the Government will pay due attention. A range of issues has been raised in this group, the comments made by the noble Lord, Lord Carrington, on timelines might be a possible way forward for discussion and prove productive.

I have had concerns for some time about permitted development rights, feeling that in some cases they are simply too loose. My previous concerns have related, for example, to conversions of offices to residential flats for sale, which often reduces the total number of places where people can go to work and increases the distances to where their place of work may then have to be. Very often, permitted development rights are used for short-term development reasons but where those reasons may not be in the long-term interests of a local area, and we need to remember that long term.

I have put my name to Amendments 312G and 312H alongside those of the noble Baroness, Lady Andrews, and the noble Lord, Lord Carrington of Fulham, because there is another aspect of permitted development rights that I believe needs reform in the interests of maintaining our heritage. According to the Royal Institute of British Architects, approximately 50,000 buildings are demolished each year. Many of them may well be unfit or unsuitable for the modern age, and demolition is understandable in those cases where they are going to be replaced with something better.

However, that is not always the case, as we have heard from previous speakers. The Victorian Society has produced evidence that high-quality historic buildings are being demolished when they still have a useful purpose. Many buildings are not listed when they could be. I have concluded that there is a gap in our regulations, which should require that older buildings, at least, that are not listed, should have to undergo a further test. That test is, I suggest, the planning system, which could consider demolition as part of a redevelopment application. If there is no redevelopment application, there is no obvious reason to demolish the building, where it is safe. That could end up with an empty site for a long time, or a later application for a worse development than the building demolished.

These arguments relate to Amendment 312G, but Amendment 312H is also critical. It requires planning permission to demolish locally listed buildings. These lists exist for a reason, and demolition should not be treated lightly. Strangely, not all local councils have local lists anyway, which is another concern.

It should not be possible for buildings on a local list to be demolished without planning permission if they are outside a conservation area—rules currently apply if they are inside a conservation area. I ask the Minister: what is the point of a local list otherwise? Local lists need protection from poor, short-term decisions on demolition which are contrary to our long-term heritage interests. This is about buildings that matter to local people and future-proofing our heritage, and I very much hope the Minister will concur.

[Lord Thurlow (CB)]

My Lords, first, I simply put right a matter of record. I failed to declare my interests in our debate before lunch. I have two buy-to-let properties, as marked on the register.

I now briefly reference Amendment 247B from the noble Lord, Lord Cormack, ably introduced by the noble Lord, Lord Carrington of Fulham. I refer to our heritage assets in the context of properties, as well as statues and artwork. In the UK, a disproportionately small minority can cause heritage assets to be removed from public view, whether they are in public or private ownership or locations.

Furthermore, the world we live in of modern development seldom includes a requirement on developers to contribute to what I think is referred to as the public realm. Most larger developments, as we have heard from the noble Lord, Lord Carrington, are built to minimum cost. We must not forget that good architecture and good design—itself expensive—is a great contribution to the public realm. The presence of statues and monuments, and good building design is a really important contribution to society. Planning applications should have a public realm box, simply to ask whether they are making any contribution to the public realm and heritage assets. The amendment of the noble Lord, Lord Cormack, should also refer to heritage assets which are stored out of sight and yet are in public ownership.

[The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord Parkinson of Whitley Bay) (Con)]

My Lords, this group of amendments relates to heritage, assets of community value and permitted development rights for demolition of buildings. I am pleased to be responding as Minister for Heritage, and I am very happy to discuss these matters with individual noble Lords, as I speak for the first time on this Bill.

Amendment 243, tabled by the noble Baroness, Lady Taylor of Stevenage, and moved by the noble Baroness, Lady Hayman of Ullock, would require the Secretary of State to publish a review of local heritage lists and the results of the 2018 review of the non-statutory guidance on assets of community value. That review was undertaken to shape the future direction of the policy in the levelling-up White Paper that His Majesty’s Government committed to and explore how the existing community asset transfer and asset of community value schemes can be enhanced. We will continue to make funds available to groups through the community ownership fund.

Regarding the review of local heritage lists, the Government recognise the importance of identifying and managing those parts of the historic environment which are valued by their community. We have given £1.5 million to 22 places across England to support local planning authorities and their residents to develop new and update local heritage lists. Our intention is that the lessons learned from that work will be shared with other local authorities so that they too can benefit from the good practice that is building up in this area. As part of the development of the new national planning policy framework, we will also develop new proposals for statutory national development management policies, including policies to protect local heritage assets. Such proposals will be subject to future consultation; we would not want to pre-empt the outcome of that consultation by taking steps such as those envisaged in this amendment right now.

Amendment 246, also tabled by the noble Baroness, Lady Taylor, would require draft legislation to reform assets of community value to be published within 90 days of Royal Assent of this Bill. Community assets play a vital role in creating thriving neighbourhoods. The assets of community value scheme enables communities and parish councils with the right to register a building or piece of land as an asset of community value if the principal use of the asset furthers their community’s well-being or social interests and is likely to do so in future. The scheme has been successful in helping community groups to identify important local assets at risk of loss. As I have mentioned, the levelling-up White Paper committed us to consider how the existing assets of community value framework can be enhanced. We must ensure that any changes to the legislation are workable in practice. To do this in a meaningful way needs consultation with all the parties that it will affect, including community groups, local authorities which are responsible for listing assets, and businesses and private individuals who are property owners. An amendment such as this risks creating legislation which does not work in practice. The framework must balance community power and the ability to safeguard community assets in a way that is fair, targeted and proportionate. We are committed to exporting the scope for improvements which can maintain this important balance, but it is important that we do so in a way which gives time with those with an interest to reflect on their experience and any proposals for change.

Amendment 244, also tabled by the noble Baroness, Lady Taylor, would mean that when deciding on the correct recipient of a temporary stop notice, the authority should have regard to the tenancy status of the occupier and their level of responsibility for any works on the property. Clause 96 addresses a gap in the enforcement powers available to local authorities in relation to listed buildings, which will help to protect these irreplaceable assets for generations to come. While under the Town and Country Planning Act 1990 local authorities have the power to serve temporary stop notices, there is currently no equivalent power in relation to listed buildings. Clause 96 amends the Planning (Listed Buildings and Conservation Areas) Act 1990 to give local planning authorities the power to issue temporary stop notices in relation to unauthorised works to a listed building in England.

The noble Baroness’s amendment seeks to add a requirement for local planning authorities to have regard to the tenancy status of the occupier and their level of responsibility. Temporary stop notices are an existing enforcement tool which local planning authorities are accustomed to issuing. Those planning authorities have experience of considering matters such as tenancy status and the level of responsibility for works carried out when they serve such notices, which would also apply in this context. The Government believe that the local planning authorities do not require the additional guidance that this amendment would provide, so they do not feel that it is necessary.

The noble Baroness, Lady Hayman of Ullock, asked me how local authorities can identify the owner of the properties when sending out a temporary stop notice. They can use a variety of sources: for instance, council tax records, planning application registers, and the Land Registry are some of the open sources of information that they are already able to consult. Usually, they would do everything they can to identify to whom it should best be served, and it can indeed be to a variety of people.