Housebuilders

Baroness Neville-Rolfe Excerpts

Thursday 11th January 2018 Lords Chamber

[Baroness Neville-Rolfe (Con)]

My Lords, I congratulate the noble Lord, Lord Best, on securing this fine debate and pay tribute to his lifelong work on social housing. Although I do not agree with some of his detailed points, I do agree that the present situation is unsatisfactory and has been for far too long. To my mind, to understand what has gone wrong we need to look at both demand and supply.

I start with the demand side, because it always receives much less attention. In 1960, the population was 52 million; by 2000, it was 60 million; and today it is 66 million and growing rapidly. The scale of growth has been very fast, mainly because of the scale of immigration, especially since Labour gained power in 1997 and the opening up of eastern European borders following enlargement. This growth was encouraged by the Government of the day for political reasons, as insiders have since admitted, but its scale was not admitted at the time, nor planned for, despite the party’s advocacy of planning.

Secondly, the average household size has reduced from 3.01 in 1960 to 2.33. Thirdly, add in our ageing population and, fourthly, the purchase of many properties in the south-east by overseas investors and one can understand why we face difficulties. Demand has also been exacerbated by the assistance the Government are giving, notably Help to Buy, and I fear will be further exacerbated by much of the generous £44 billion of support in the pipeline from 2017 to 2022—I cite that from the excellent Library note produced for this debate.

That brings me to supply and some findings from a fine report that Chris Philp MP recently produced for the Centre for Policy Studies. In the 38 years from 1970 to 2007, housing starts averaged 234,000 a year. They declined to 125,000 in 2009 and were still only 192,000 in 2016-17. There is a huge shortage of housing in London and the south-east that has built up for nearly 20 years, with a cumulative undersupply estimated at 439,000 homes. There are now 1 million more people living with their parents than in 2000 and all too frequent cases of immigrants living 10 to 15 in a small house.

Housing costs are very high, especially in and around London and, as has been mentioned, it takes 10 years for a first-time buyer to save for a deposit. Yet home ownership remains a near universal aspiration, and the net present value of owning compared with renting is materially better on all reasonable assumptions, so young people are right to feel anxious.

So what should our Housing Secretary do? He needs to show unwavering leadership and build trust between the key stakeholders: notably between government departments, metro mayors and local government. He needs to use the funding made available to better effect. To take one example, the thinking behind the national productivity investment fund for roads was that it could free up land for housing as well as eliminate blackspots, but the bureaucracy around the funding is delaying investment. He needs to engage the major housebuilders, but I agree with other speakers that we sorely need the small housebuilders, who have melted away since the plan-led system came in in 1990. I have called before for a tax break for small builders, and I do so again. He needs to identify and tackle the barriers to success. Like other speakers, I single out the weakness of construction skills among the UK population and our slowness to develop modular homes.

Planning has got a bit easier, but it is bureaucratic and difficult, and I believe in easing restrictions rather than just imposing duties on councils—for example, planning around stations, motorways and public buildings with build-out clauses in the sale of land to accelerate the process, and allowing taller buildings and schemes on low-density housing estates. Two ideas from the CPS report are to require new developments over 20 units to be 50% purchased by UK residents, and requiring mortgage lenders to extend offers to 12 months for first-time buyers, so that they can buy new homes off plan.

The ministerial team needs to review and report on how it is doing and learn from success and failure. The Budget target of 300,000 homes is a good start, but it needs to grow. Above all, the plan needs to be simple and well communicated. I wish my noble friend the Minister and all those charged with this important task every success.