Albert Owen
Main Page: Albert Owen (Labour - Ynys Môn)(8 years, 8 months ago)
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Chris Philp (Croydon South) (Con)
I beg to move,
That this House has considered affordable housing in London.
[Interruption.] We seem to have been attacked by some sort of ghost in the acoustic system.
As long ago as 1946, Anthony Eden laid out a vision of a property-owning democracy, describing ownership of property as
“a reward, a right and a responsibility that must be shared as equitably as possible among all our citizens.”
I hope that both Government and Opposition Members agree with that sentiment. Demand for housing in London is at record levels. The population of our city recently exceeded the pre-war high of 8.6 million, overtaking the peak in 1939. It is growing by 100,000 people per year. That rate is forecast to continue, and by 2030 the population of our city will exceed 10 million. That population growth means that each and every year we need to build 50,000 more homes in the city to keep pace with population demand. I ask Members to keep that number in mind as we continue the debate.
The challenge that our city faces is that for the last 20 years or so we have been building only between 15,000 and 25,000 new homes a year, meaning that each and every year we are building fewer houses than required to meet population demand. That situation is clearly not sustainable. I have done some calculations for the period since 2000: in that time, we have built about 300,000 fewer homes than required to meet population demands, so we have that accumulated under-supply in our city. As a consequence, there are enormous pressures on the availability and affordability of houses in this city, as Members know from their constituency casework. [Interruption.]
Albert Owen (in the Chair)
Order. We have a problem with the acoustics. Will you try switching your microphone off? [Interruption.] I am told there might be no recording, so please turn it on again—we need a report. We shall carry on.
Chris Philp
As Members know from their constituency postbag, there is enormous pressure on the affordability and the availability of housing in our city. That is why 25% of 20 to 35-year-olds are still living with their parents. As the father of two-year-old twins, I very much hope that that is not the case in 18 years’ time. The average age of a first-time buyer in this city has risen to 37, so there are real challenges to do with the availability and affordability of housing.
Some people, such as the hon. Member for Islington North (Jeremy Corbyn), may talk about rent controls and so on, but at the most fundamental and basic level the issue is one of supply and demand: demand is exceeding supply. The demand side of the equation— population growth—is hard for the Government to regulate, and the only component that they can influence is probably immigration, which is clearly a big driver of housing demand in London, so it is right that the Government should want to get immigration under control. The other side of the equation is supply. By increasing supply we can alleviate the pressures to which I have referred.
Albert Owen (in the Chair)
Order. Before I call the next speaker, Helen Hayes, I remind Members that I will call the first of the three Front-Bench speakers at 10.30 am, so Members have about five minutes each. If everybody keeps to that, there will be no need for a time limit.
Dr Rupa Huq (Ealing Central and Acton) (Lab)
We are hearing a list of questions for the Minister, and I just want to throw in a few of my own, because although I am new here, even I am getting a sense of déjà vu. I led a similar debate almost exactly two months ago, and we did not have any answers then, so I just want to throw in three questions from then.
Albert Owen (in the Chair)
Order. I will do my best to fit the hon. Lady in at the end, but she must follow procedures. Make an intervention by all means, but do not ask a list of questions.
Zac Goldsmith (Richmond Park) (Con)
It is a pleasure to speak under your chairmanship, Mr Owen. I congratulate my hon. Friend the Member for Croydon South (Chris Philp) on having initiated one of the most important debates that we can have in London. I want to echo a point made by my hon. Friend the Member for Ruislip, Northwood and Pinner (Mr Hurd), who talked about the changing dynamic in his constituency. I have no doubt that that is echoed all the way around London. When I was selected in 2008 to be the Conservative candidate for Richmond Park and north Kingston, the main emphasis in the hustings, in the open primary, that decided it in the end was who was going to fight off the inappropriate development best—who was going to take it to the developers. And the very same people, just a couple of months ago in the run-up to the most recent general election, were asking in the hustings, “How on earth are our children going to get on the housing ladder? There is no prospect of it at all.” There has been a sea change in public attitudes, and I do not think there is any doubt that housing is the No. 1 concern in London. The population is soaring and will continue to soar. We expect the population to hit 10 million over the next 15 years and we are not building anything like enough to match that demand, so volume does matter.
The average price for the first-time buyer in London is, as has been said, more than £400,000. That requires a deposit in some cases of about £100,000 and an income of about £75,000 or £76,000 to manage the mortgage. Rent is more than double the national average. Even in the least expensive postcodes in London, renters on the London living wage can expect to spend more than 40% of their income on rent, which means that they have no chance of saving for a deposit in order to get, eventually, on to the housing ladder. Therefore, Londoners are already being priced out of their own city. That is hurting families, but also our competiveness as a city.
There is no single answer, but a lot can be done. In the two or three minutes that I have left, I will not be able to talk about some of the really meaty, interesting issues such as devolution of property taxes, which was touched on in the last speech, or another issue that I do not think has come up, which is putting empty homes back on the market. There are about 80,000 empty homes in London that should not be empty. The current Mayor has done more than, I think, any other British politician in living memory to bring empty homes on to the market, but we have a long way to go and we can be more robust.
However, the bottom line is, whether we like it or not, that we need to build more—45,000 to 50,000 homes every year just to avoid a crisis. The question then is how we do that. There is the problem of land banking, which has been raised. There are more consents to build than developments actually happening, but it is not just the private developers that are land banking. As has been mentioned, there is an enormous amount of publicly owned brownfield land—it is owned by the public sector. TfL alone owns the equivalent of 16 Hyde parks. The NHS owns an enormous amount of land that it is not using. A typical local authority can own up to one third of the land in its borough. We can deliver the homes that we need in London without even touching the green belt—without encroaching on our green spaces at all. I strongly welcome the initiative by the Mayor and the Government. The London Land Commission will provide the inventory that we need. We do not have the information at the moment, but we will shortly.
However, to get building we also need to address a problem in the development sector, which is that it has increasingly become an oligopoly. A very small number of mega-developers account for the vast majority of the building that we see in London and, in turn, demand unrealistic levels of return based on often spurious “viability tests”. There is a need to open up the viability test and to help local authorities with the expertise they need to deal with the developers and with that process.
To build new homes, we need three things—I am aware that I have only two minutes left, so I am going to rush. We need land, which we have. We need planning, which, between the local authorities and the Mayor, we have. It is possible to de-risk development with the powers that the Mayor and the local authorities have between them. And we need finance. It is not difficult to get that finance, for precisely the reason that we have heard from a number of hon. Members. There is an overwhelming appetite among people around the world to invest in London. At the moment, that is causing serious resentment, because buildings are being built and then bought by people who have no intention of living in those buildings. “Safety deposit boxes in the sky” is how they are often described.
That appetite is there, but it does not have to be a negative; it could be a positive. If we channelled that investment in order to deliver the homes that Londoners need—affordable homes for purchase and for rent on publicly owned, publicly available brownfield land—we could turn that negative into an overwhelming positive. We could create a pan-London investment vehicle designed to attract that investment. There are people who, because of the volatility and dangers in the world around us, want to put their money somewhere safe—that is, in London property. We could create that investment opportunity for them and for the pension funds, which want nothing more than long-term investments—low risk and medium return. This is ideal for London property. We need to find a way of creating that vehicle to attract and then channel that funding in such a way that it does good.
I note the comments made by my right hon. Friend the Member for Cities of London and Westminster (Mark Field). I very much agree with the thesis that he put forward. We need to look carefully at the ideas that he suggested, some of which I think absolutely do need to be implemented.
In my remaining minute, let me say that one huge opportunity we have is to redevelop some of the poorly designed estates that were put up in the ’50s and ’60s. My hon. Friend the Member for Ruislip, Northwood and Pinner mentioned Create Streets, an organisation that has been looking closely at this. It takes the view that if we were to redevelop about half of London’s 1950s and 1960s estates, we could increase density even while lowering the height of these buildings, which would improve their attractiveness and quality. By doing so, we could potentially provide the affordable homes that we need for the next 10 to 15 years. There is an enormous amount of work to do there, and it is a massive opportunity.
Let me end by saying that whichever route we take, it is essential that we build well; that we work with, not against, communities; and that we build homes that enhance communities. We know how big the challenge is, and if we build badly—if we dump hideous buildings and disproportionate developments on communities—we will exhaust Londoners’ appetite for the level of development that we will need if we are to have any chance of delivering the required number of homes.
Albert Owen (in the Chair)
Order. This debate has been oversubscribed, and just to be fair, the Minister has agreed to give two minutes at the end to the mover of the debate.
Albert Owen (in the Chair)
It will be down to one minute. The Minister has offered two minutes, and we are using up time arguing over a minute or two. The hon. Member for Ealing Central and Acton (Dr Huq) and the right hon. Member for Tottenham (Mr Lammy) will each make a two-minute contribution. If the Front-Bench spokespeople keep their contributions to eight minutes each, we will get everybody in. David Lammy—two minutes, and you will be cut off.
Mr David Lammy (Tottenham) (Lab)
For the last time, the hon. Member for Richmond Park (Zac Goldsmith) is cutting my time short. He demonstrates well why he should remain in this House.
I want to emphasise solutions. It is important to recognise that there has been a collapse in London for those who require social homes. If the average income is £32,000 in London, many Londoners will never be able to own a home of their own. If the Government continue to extend right to buy to housing associations, more social homes will come off the market. If they do nothing about those who exercise the right to buy, which for many is effectively a discount of hundreds of thousands of pounds from the taxpayer on social homes, there will continue to be a collapse in social homes. It is of concern to me that despite quite a lot of cross-party consensus, little is said by the current Government on social homes and where we will see them.
We need new solutions. What we heard from my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) was absolutely right—prefab, discount homes for young people at prices that they can afford. That is why, in my bid to be London Mayor, I have suggested that we issue bonds and enable people to build at a discount on public land. We cannot build in such a way on public land if we continue to sell it at best value to the highest bidder. TFL land and Scotland Yard have been sold off to the highest bidder. Local authorities are selling off land to the highest bidder. That is public money and public land, so it should absolutely be used to build discount homes that people can properly afford. We need a bond issue. Finally, we need to revisit green-belt designation.
Dr Rupa Huq (Ealing Central and Acton) (Lab)
I want to raise some questions that remained unanswered when we debated the subject in July, and I wonder whether we will have better luck with this Minister than we did with the previous one. I congratulate the hon. Member for Croydon South (Chris Philp) on securing this vital debate.
The average age of an unaided first-time buyer in London is now 37, and at the debate in July I asked what the Minister predicted that would be by the end of this Government’s term in office. I also raised the question of affordability. The hon. Member for Croydon South talked about Old Oak Common, where 24,000 dwellings are coming on stream. The Mayor of London’s definition of affordable is 80% of market rent, but is that realistic or desirable? Can we change it? I had no reply to that question.
The right hon. Member for Cities of London and Westminster (Mark Field) made some interesting comments about overseas matters. I remember asking in the previous debate whether we would soon be “turning Japanese”. In that country, people bequeath a mortgage from generation to generation. Do we foresee that happening? Regarding overseas investors, I asked the Minister who responded to the debate in July whether he would consider including a provision in his next housing Bill banning overseas and off-plan investors from buying future new builds, so that local London first-time buyers would at least have a chance. That was the No. 1 thing for me as a candidate, and it is the No. 1 thing in my postbag and inbox as an MP.
Recently, I posted a picture when I was door-knocking in Stephenson Street, NW10—a cobbled road of terraced housing that is often used in period dramas, and that was in the video for “Our House” by Madness. I posted it to say what a fantastic cultural heritage we have in East Acton ward, and somebody posted underneath asking, “Have you looked at what these are going for? The last one sold went for half a million.” Those houses were not meant to be for rich people. I fear that London will experience a brain drain, and that in time it will be only for the oligarchs and the super-rich.
Corri Wilson (Ayr, Carrick and Cumnock) (SNP)
It is a pleasure to serve under your chairmanship, Mr Owen. I thank the hon. Member for Croydon South (Chris Philp) for securing the debate and bringing the matter to the House for discussion.
As a new MP looking for a flat in London, I encountered some of the problems that have been talked about today. The number of people living in London has increased by a fifth, while the number of homes available has not increased at the same rate.
As the third-party representative summing up the debate, I would like to share some points from north of the border, if I may. The right to buy will end for all council and housing association tenants in Scotland on 1 August 2016. In 2013, 185,000 people were on the waiting list, while only 54,000 council houses were available to let. Although the right to buy has driven up home ownership in Scotland, it has contributed to an acute shortage of social housing. The abolition of the right to buy will keep 15,500 homes in the social sector for the next decade.
Albert Owen (in the Chair)
Order. I remind the hon. Lady that the topic under discussion is affordable homes in London. I would appreciate it if she addressed that. I understand that she wants to make comparisons, but that is the subject that we are discussing.
Corri Wilson
Absolutely. In Scotland, we have shown that investment in affordable housing can keep costs down, create jobs and, importantly, help people to live better lives. As has been mentioned, it is not only about buying. We have actually taken over abandoned properties, repaired them, brought them up to housing standard and let them out. The SNP MPs in Westminster will push for a funding boost for affordable housing from the UK Government to help build more homes in Scotland and across the UK. Specifically, we will call for the UK Government to put in place a new target to build 100,000 affordable homes each and every year.
Mr Francois
My hon. Friend knows a lot about the subject and his point is well made.
The Mayor’s London housing strategy includes a commitment to double the number of First Steps homes —the single brand for shared ownership products in London—delivered in the capital by 2020, and to double it again by 2025, helping 250,000 Londoners into home ownership.
Several hon. Members mentioned planning. The Localism Act 2011 gave the Mayor strategic housing and regeneration powers and enabled the establishment of mayoral development corporations to support the regeneration the Queen Elizabeth Olympic park—it is very fitting to mention that today—and Old Oak Common and Park Royal. Since then, the Government have invested more than £3 billion and housing delivery has increased. In 2014, 52,000 homes were granted planning permission in London, up from 45,000 in 2013. Those figures include both minor and major schemes and are consistent with the national total of 253,000 for 2014.
The Government have helped to unlock major regeneration sites in London to deliver new housing. Those include the Greenwich peninsular, with 10,000 new homes, including approximately 3,270 affordable homes for rent or part-rent, 600 student beds, and 3.5 million square feet of commercial floor space. Of the 10,600 new homes at Barking riverside, 31% will have three or more bedrooms and more than 40% will be affordable. Of the 10,000 new households at the Queen Elizabeth Olympic park, around one third will be affordable housing, with many built for long-term rent, as well as to buy. Five new neighbourhoods provide play areas, schools, nurseries, community spaces, health centres and shops, with places to relax, play and exercise all within easy walking distance.
Some hon. Members mentioned changes in rents and the pressure on housing associations. It is important to bear in mind that housing associations generated a surplus of about £2.4 billion in 2014. The sector is financially robust and will be able to deliver the efficiency savings that the change in rental costs implies. To help them further, the regulator will be on hand to help housing associations consider how they can deliver greater efficiency and value for money.
In the few minutes that I have had, I hope that I have managed to outline the number of initiatives under way to increase the supply of affordable housing in London. The Mayor has an extremely proactive programme of attempting to do that. There is a step change in the number of affordable houses being aimed for in London. He is rolling that programme out and making progress. It is incumbent on us all in this debate, which has been conducted in a relatively non-partisan manner, to encourage the Mayor and his successor—whoever they may be—to continue the programme of providing affordable housing in London and giving the people who live in our great capital city a good place to live. On that point, I will keep my word and give just over one minute to my hon. Friend the Member for Croydon South to conclude the debate.