Housing Market (London)

Andy Slaughter Excerpts

Tuesday 18th November 2014 Westminster Hall

[Ms Abbott]

I entirely agree with my hon. Friend, although I would say that it is a question not just of long-term tenancies, but of rent stabilisation. It has become completely impossible for people to manage in a rental market in which there is no stabilisation and rents continue to spiral. I have spoken at some length about the New Era situation, because it reflects the way in which Londoners’ homes are becoming pieces on a chessboard for multi-billion-dollar international property developers.

[Mr Andy Slaughter (Hammersmith) (Lab)]

That reminds me that the Financial Times scoop today is that the Qataris intend to buy up the High Speed 2 sites. One of those is in my constituency, where 24,000 homes are planned, but of course those 24,000 homes will be exactly those sky-high-priced luxury flats, because that is what the Mayor of London wants. Let us not ignore the fact that this is not happening by accident or because of market forces. It is a deliberate policy of this Government, Conservative councils and a Conservative Mayor to price my constituents out of London so that international developers can make a profit there.

[Ms Abbott]

I am grateful to my hon. Friend. There is no question but that we are seeing a process that is partly about how private developers are being facilitated and partly about what is happening with the Government’s so-called welfare reforms, which, as I said, is resulting in a form of social cleansing of zones 1 and 2 in London. That does not make for a sustainable community. How are hospitals, the fire service, local authorities and the public sector generally to recruit if ordinary people coming into the housing market for the first time increasingly can afford neither to buy nor to rent in zones 1, 2 and even 3? As my hon. Friend said, that is not by chance—by accident. When we have a Mayor who says that affordable means 80% of private sector rents, which is way out of the reach of anyone on an average salary in London, and who seems loth to intervene in what is happening, Londoners have to face the grim reality that a city that has always prided itself on its diversity and cohesiveness will see that diversity and cohesiveness torn asunder as we move towards social cleansing at the centre. If nothing is done about the current situation, London will become a place where people living in zones 1, 2 and 3 either are extremely wealthy or are serving the extremely wealthy. That is the only way people will be able to afford to live there.

As I said, there are a number of remedies that we need to look at. First and foremost, councils need to be able to borrow to build. We need some form of rent stabilisation. We also need to do something about rental agencies and the charges that private sector renters find themselves paying.

However, there are also a few things that we should not do. It has been suggested that one solution to London’s housing crisis lies in building on the green belt. As someone who spent most of her childhood on the edge of the green belt in Harrow and who now lives in the inner city, I do not believe that building on the green belt is the remedy. It is what developers always want, because building on the green belt is easier for them. They build executive houses that they can sell easily. But houses on the green belt are of no use to young professionals in the centre of the city, who want to be within reasonable commuting distance of their work. They are of no use to families in the centre of the city, who want family-sized housing that, again, is within commuting distance of their work. I therefore say very firmly that anyone proposing to build on the green belt is simply falling into a trap set for them by developers. We should look at the more than 50,000 brownfield sites in London and incentivise development on those sites. The truth is that London’s housing issues must be addressed primarily within the M25, because it would defeat the primary objectives of the green belt—to check urban sprawl and to support biodiversity—if we fell for what the developers are telling us and started to build on it in any great numbers.

London is the greatest city in the world. It has never been more energetic, more exciting or more prosperous, but I put it to the Minister that without urgent action to address the housing crisis, London’s future is at risk. The housing crisis is not just a question for young renters, people who cannot afford to buy and people in social housing and council housing, who are being forced out of London in some cases because of the cuts in housing benefit. It is also a question for older people who are themselves well housed but who look at their children, who may have professional jobs, and realise that they will never be able to afford to buy inside the M25. It is also a question for employers. As I said, it has become increasingly difficult for London employers to recruit because of excessive housing costs.

How does the Minister propose that a city such as London can function if teachers cannot live within commuting distance of the schools that they teach in, if nurses cannot live within commuting distance of the hospitals that they work in and if even policemen find themselves living way outside the communities that they police? The state of the housing market in London is our most pressing issue. What is happening on the New Era estate in the constituency of my hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier) illustrates predatory property developers at their worst.

I am grateful to the House for the time allotted this afternoon to raise these important issues and I look forward to hearing the Minister’s response and his comments on what he and the Government are doing to address this state of affairs.

--- Later in debate ---

[Brandon Lewis]

We sometimes also see British institutional investors—British companies—investing in the private rented sector overseas. In places where that has happened, they tend to be grateful to have good management. I want to see good management, good landlords and good institutional investment coming into the private rented sector. The Mayor of London has recently launched a mayoral concordat on new homes in the capital. Key developers have been contacted and asked to commit to selling new homes on every development to Londoners before, or at the same time as, they go to overseas buyers.

A couple of hon. Members spoke about properties being built and left empty. The number of empty homes across England is at its lowest rate since records began. The vacancy rate in London has dropped to below 2% for the first time ever. Hon. Members have touched on the question of how we improve the private rented sector by looking at letting agents. Although landlords and letting agents are free to set their own charges, they are prohibited from setting unfair terms or fees under existing consumer protection legislation.

[Mr Slaughter]

The Minister is talking about support for affordable housing and even social housing. Can he explain why he sat on, and subsequently overturned, the Planning Inspectorate’s report on the Shepherd’s Bush Market compulsory purchase order, which will destroy social housing, a 100-year-old market and small businesses simply to build more than 200 luxury flats on the site?

[John Robertson (in the Chair)]

Order. The Minister will have to write to the hon. Gentleman.