Affordable Housing

Baroness Bakewell of Hardington Mandeville Excerpts

Thursday 25th June 2015 Lords Chamber

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, I thank the noble Lord, Lord Whitty, for the opportunity to debate the supply of affordable housing. However, while trying not to prematurely run the debate on the right to buy that we will have later in the year, it is extremely hard not to consider the impact that this will have on affordable housing. Everyone is entitled to a home. We need mixed communities with rented properties, low-cost buying, shared ownership and market rents.

I will start with land and planning. There is a proven case for affordable housing. Some believe that Section 106 affects developers’ profits. Section 106 is not a gift from a developer; housing associations pay for the housing. In times of austerity, developers build Section 106 houses first. This is often also used to open up new sites; the Docklands development is an excellent example.

Starting developments lifts the local economy. I believe that the Government should encourage local planning authorities to enable rural emphasis in the NPPF, including encouraging the local community land-trust model. In my area two villages, Queen Camel and Norton-sub-Hamdon with Chiselborough, have been exemplars of developing community land trusts, providing an asset lock for the community and the housing associations. The Hastoe and Yarlington housing associations have provided the housing management expertise needed by the communities.

The Government should also encourage villages to take up neighbourhood plans, thus devising the balance of new market to affordable housing for their communities themselves. This process is currently cumbersome and expensive for villages. The Government could assist by reforming the system to make it far more user-friendly. Both these measures would put the community in charge of what is happening in their areas.

What thought have the Government given to tax breaks to rural landowners for providing sites and/or barn conversions for affordable housing? Many philanthropic landowners exist do not need the encouragement of a tax-break system, but others might be tempted by such a system. However, no landowner is going to sell his land at a reduced rate if the houses built on it are then going to be sold on at a discount under right to buy. This will lead only to a drying up of affordable homes, not an increase.

What of the Homes and Communities Agency? Is it not about time that the HCA had a rural quota to achieve, set within the overall programme but outside London, where rural schemes are often of a higher cost pro rata and subject to being outbid by more urban, cheaper schemes? The Government get a good return on their investment through the HCA. There is of course a cross-subsidy to affordable rents, which do not cover the costs, but the strength of housing associations is based on their past performance and individual business plans. Investors will not put money in if the asset is then to be sold off at a discount.

The Government should be encouraged to release more surplus land and buildings specifically for affordable housing. There are some very good examples around the country, such as Borden in Hampshire and redundant MoD land. Although the HCA has been set up as a clearing house for national land, many government departments have been recalcitrant in releasing land for much-needed housing; the Highways Agency springs to mind.

Park homes are another excellent example of low-cost housing that could be promoted on land released from the MoD. In South Somerset, the council leases land from the county council and provides good-quality homes at affordable rates. Are the Government considering promoting such schemes?

The Government have set 10 properties as the national threshold for affordable housing obligations. What was wrong with the localism agenda and allowing the local planning authority to set its own threshold? In a rural environment, this might be set much lower and be based on local evidence. A small infill site in a rural setting could be very lucrative for a developer and yet yield no affordable housing for the community, thanks to the one-size-fits-all approach from the Government.

Currently tenants of existing rural affordable housing become eligible for the spare room subsidy or so-called bedroom tax. Would it not be better to exempt such affordable housing, thus reducing demand from families who are forced to move as a result of the imposition of the tax? This is particularly hard where there is no suitable housing to move to within their community.

It is often said that housing associations have huge balances that are retained for the benefit of their staff. While this is the case for some, it is definitely not the case for all. The majority of housing associations exist to serve the public and those requiring housing. They reinvest their income into the business by providing housing but also by training and educating their tenants and getting them into work. This needs to be recognised, and legislation should not penalise the good because of the poor. We might be in danger of throwing the baby out with the bathwater.

I summarise the two biggest factors in the effect on supply and demand as the proposed extension of the right to buy and the imposition of the 10-homes threshold, which fits the urban context but is far more pernicious in rural areas.