Housing: Affordability and the Underoccupancy Charge

Baroness Bakewell of Hardington Mandeville Excerpts

Thursday 31st October 2013 Lords Chamber

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, it is a privilege to be able to address your Lordships’ House on a subject so dear to my heart, and I thank the noble Baroness, Lady Quin, for presenting us with the opportunity. Like many before me, I suspect, I am somewhat surprised to be here at all in the first place. I thank my sponsors, my noble friends Lady Brinton and Lord Ashdown, whom I worked with for 10 years, for their patience and continued support in helping me to settle in. Everyone who has entered this noble House in the past has commented on the warm welcome they have received and the help and directions given by the staff. I add my name to that list. I also want to place on record my gratitude to my husband, daughter and son for their tremendous support and encouragement throughout my political career.

Next year is the 40th anniversary of when I joined the Liberal Party. During my political career I have been the leader of Somerset County Council and a vice-chair of the County Councils Network. I remain involved with the Local Government Association as a trustee of the leadership centre. I am now a councillor on South Somerset District Council, leading on troubled families, and chair its strategic partnership, so I am aware of the impact of the lack of affordable housing in rural areas.

I was born in a bomb-torn Bristol after the Second World War. Returning servicemen such as my father found that there were no homes for them to buy for their growing families. My parents, like others, lived with a parent, accumulating points to move up the list to buy a house. When I was three, we moved into a road of newly built houses taken entirely by young families. Today the issues are more complex and, in Somerset, the rising demand for housing and number of waiting applicants is growing. The average house price is many times the average wage. It would be extremely helpful if the Government saw fit to introduce an improved grant regime to support further investment for those unable to afford home ownership. It is important for the planning system to be pro-housing. The economic case is proven; the contribution, regionally and nationally, brought by housing associations building new affordable homes is £6 for every £1 of government grant. These developments create jobs, skills, apprentices and support local supply chains.

The consequential impact of the additional burden of ending the spare room subsidy may not have been adequately assessed before its introduction. There has been a disproportionate focus on the out of work, when the reality is that a high proportion of those affected work in low-wage economy areas, such as south Somerset, some in part-time employment, because full time is unavailable, or on zero-hours contracts, relying on housing benefit top-up to balance their budgets. The gap between the haves and have-nots has widened. This is unacceptable in Britain in 2013.

There appears to be a misconception around the difference between a house and a home. Creating a home requires effort and investment which will be made only if there is some certainty about the future. I am sure that the Government do not wish to destroy any idea of investing in homes or communities except for those able to afford a mortgage. In April, the number of households in arrears with one of our registered social landlords was 65. This has now risen to 397 for those affected by the charge. Most have managed to make some payment, but debt and arrears are rising, as, sadly, is the demand for emergency charitable food parcels.

It is important that the DWP considers whether there is a sufficient supply of appropriately sized properties available to those wishing to downsize. Those requesting to downsize have combined with those seeking to enter the affordable housing market, creating a high demand at one and two-bedroomed level. Meanwhile, families with a comparatively low-level need are being housed in three-bedroomed properties. Where no suitable property exists, there is the option of leaving affordable housing and moving to private rented property. However, rather than reducing the housing benefit bill, this is generally leading to an increase.

Rural exception housing in our smaller villages is largely two or three-bedroomed homes to ensure this meets the long-term needs of the community. Many communities make their homes in villages for life yet now some will be required to leave if they are unable to pay for underoccupancy as children leave home. Allocation of these houses is ring-fenced to those from the community or surrounding villages. Families with two children of different sexes, say aged seven and eight, will not be eligible for a three-bedroomed property in their village and may be forced out, while the three-bedroomed property they will require in two years’ time would be allocated to a family from outside the area.

Another impending contributing factor to the housing supply is the recent, welcome announcement on Hinkley Point C. According to EDF, the construction of Hinkley Point C will involve 5,600 construction workers and a further 20,000 to 25,000 support jobs over the seven years plus of the project. Of those, 5,000 jobs will be filled by existing Somerset residents. Beyond temporary accommodation for some construction workers, a high proportion will be housed within the existing rental market and through holiday accommodation. The impact across a 90-minute travel-to-work area will be marked, as the higher wages of EDF workers impact on the local housing market. EDF’s gain could mean the collapse of the private rented market for local people. Already, rents in this area are rising and will continue to rise as the low-wage economy of the region is priced out by the high-wage economy of Hinkley Point C. I look forward to speaking to my right honourable friends the Housing Minister, Stephen Williams MP—himself a Bristolian—and to the Secretary of State for DECC, Edward Davey, to see what solutions might be found to these local issues.

I fear that I have painted a somewhat gloomy picture but felt it wise not to underestimate the issue. It is only by realistically assessing the situation that we can find suitable solutions to take us forward.