Housing Crisis: Rural and Coastal Communities

Baroness Taylor of Stevenage Excerpts

Monday 24th July 2023 Lords Chamber

[Baroness Taylor of Stevenage (Lab)]

My Lords, when we spoke earlier in the Chamber, I failed to welcome the noble Baroness, Lady Swinburne, to her place, and correct that now and welcome her to the Dispatch Box and her new role. I thank the right reverend Prelate the Bishop of Exeter for initiating this very important debate and all noble Lords who have spoken.

I, too, regret the huge black hole in the Secretary of State’s statement today about housing that did not anywhere touch on rural and coastal housing. Councillors see the catastrophic failures in government housing policy on a day-to-day basis, as we deal with the front line of homelessness, lack of availability of social-rented or affordable private rented homes and a housing market that is incredibly skewed, especially in rural and coastal areas, to investors looking for second homes or holiday homes to let out for profit, pushing prices right out of the reach of local people. The right reverend Prelate gave some startling figures for Devon, and I am sure they are true for other areas. I really welcome the Archbishop’s commission’s report, which was thorough and got right to the point of the problem.

My noble friend Lady Warwick set out the context of the overall housing crisis in which this rural housing dilemma sits. It is heartbreaking for people who live in rural and coastal areas to see them increasingly hollowed out as they lose their shops, pubs, schools and medical centres because of the transient nature of a population much of which is there for only part of the year, with high house prices meaning that local workers just cannot afford to live there, as so clearly illustrated by the noble Lord, Lord Teverson, in respect of Cornwall.

The APPG on Coastal Communities provided clear evidence in its report of 2022 to show that rural and coastal areas were hardest hit by the global financial crisis of 2008 and slowest to recover, with many still not having recovered when the pandemic arrived. Of course, the nature of economies in rural and coastal areas has a fundamental impact on the ability of local residents to afford the housing they need, and it impacts on investment in existing housing too, with rural and coastal areas, as pointed out by the LGA, likely to be older and in poorer condition. How will the Minister ensure that new social housing regulations reach rural areas too?

The National Housing Federation, together with the Rural Housing Alliance, has produced an excellent rural housing five-star plan, to which the right reverend Prelate referred. It outlines a very clear strategy for each of the next five years. It calls for Homes England to have a specific target for the delivery of rural homes. We have learned that Homes England, the Government’s own agency, has posted losses of £148.3 million arising from bad loans in 2022-23, and in the year to 31 March, there was another £230 million of bad loans, up from £51 million two years ago. Will those losses impact on Homes England’s ability to deliver more housing altogether, but particularly in rural areas?

Affordable, sustainable housing should be a right, wherever you live in the UK. If we continue to ignore its vital importance to our rural and coastal areas, they will continue to hollow out, and the vital place that rural and coastal communities have in our culture will be diminished. I look forward to hearing the comments from the Minister.

[Baroness Swinburne (Con)]

I thank all noble Lords for their contributions to the debate. I am pleased to respond to it, not least because I grew up in, and my family are still part of, a rural coastal community in Ceredigion, west Wales, and I recognise many of the issues raised by your Lordships in today’s debate.

In particular, I thank the right reverend Prelate the Bishop of Exeter for bringing forward this important subject. I am aware that he met my ministerial colleague, my noble friend Lord Benyon, alongside other noble and right reverend Prelates, where the housing challenges that rural and coastal communities face were discussed, and I am grateful to have this chance to talk to them directly.

This Government fully appreciate the importance of delivering more of the right homes in the right places for people to buy and rent. That is right at the centre of our mission to level up growth, opportunity and pride throughout the United Kingdom. Your Lordships will have heard from the Secretary of State for Housing earlier today the detail on our long-term plan for housing. That commitment very much includes affordable, attractive, greener housing for rural and coastal communities. However, we recognise that there are bespoke challenges that those communities face, as outlined in today’s contributions. They are complex and multilayered by virtue of the communities’ more remote locations and range from limited availability of affordable homes to barriers to home ownership when up against the opportunities provided in more urban areas

People should not be priced out of the places where they grew up and where they have family, friends and livelihoods. Local businesses should not have to rely solely on a local workforce in order to be able to expand, grow and serve their customers. Of course, their growth will make their communities stronger and more sustainable. That is why we are working tirelessly in our steadfast commitment to increase the supply of affordable homes, which build those strong, sustainable communities, while preserving and enhancing the unique character and beauty of our cherished countryside and coastlines.

As many of your Lordships have raised, housing supply is a critical issue, including increasing the supply stock. We are making good progress towards this. We are on track to deliver our target of 1 million homes in this Parliament—and we already have almost 70% of them on their way. We remain committed to our ambition to deliver 300,000 new homes a year across England, including in rural and coastal areas. In the last year, 2021-22, over 232,000 homes were delivered in England. Of relevance to this debate, more than 60,000 of them were in rural areas. This feeds into the 2.2 million homes-plus that have been delivered since 2010, with nearly a quarter of a million being affordable homes in rural areas.

We are doing this mostly through our £11.5 billion affordable homes programme, delivering homes to buy and rent across England. We are proud of this progress, but we know that much more needs to be done and we must not be complacent about the scale of the challenge. That is why we are not just delivering homes on a larger scale but supporting local communities, particularly in rural areas, to make the most of smaller sites through the rural exception sites policy. This aims to encourage small affordable housing developments in rural spots where they would not normally be permitted.

As numerous noble Lords have raised, the issue of second homes and short lets is highly relevant. We are therefore acting to empower rural and coastal communities, which have high numbers of second homes and short-term lets. We completely appreciate how much of a factor these types of homes are for coastal and rural communities. The right reverend Prelate the Bishop of Exeter, and the noble Earl, Lord Devon, among other noble Lords, raised those issues. They have highlighted how much of a negative influence—

[Baroness Taylor of Stevenage (Lab)]

We have a unique opportunity in the Levelling-up and Regeneration Bill to bring some of these measures forward. Do the Government intend them to come forward in that Bill?

[Baroness Swinburne (Con)]

I will come to my levelling up contribution shortly, and if it has not satisfied the noble Baroness at that point, I will happily come back in writing to her.

With regard to those communities in Devon, particularly when it comes to social housing supply, please know that we have listened and are taking everything into consideration as we look to level up prosperity and opportunity, as well as bolster community cohesion. We recognise that rural areas have more limited affordable stock than other places. As well as the affordable homes programme, my right honourable friend the Secretary of State for Environment, Food and Rural Affairs has announced £2.5 million of funding to provide a network of rural housing enablers across England, which will help to identify development opportunities and secure the support of local communities. Homes in rural protection areas are also exempt from both the right to acquire and the right to shared ownership schemes.

We are therefore introducing measures to strike the right balance between boosting local tourist economies and the availability of affordable homes for local people, giving councils the power to apply a council tax premium of up to 100% on second homes through the Levelling-up and Regeneration Bill, and introducing higher rates of stamp duty for second properties and new measures to close the tax loopholes on holiday lets—alluded to by a noble Lord—that came into force in April.

With respect to the regulating of holiday lets, we propose to introduce a planning use class for short-term lets and a registration scheme for all such properties. The consultations on these have just closed and we will give an update in due course. Through the Renters (Reform) Bill we will change the way that the short-term lets market interacts with the private rented sector. By abolishing no-fault Section 21 evictions, as well as removing the existing ground (3), landlords will be unable to evict a long-term tenant to convert their home to a holiday let and maximise profit during the peak summer season. We do not think that it is right that landlords can do this and we will end the practice.

Turning to the planning reforms, alongside having enough homes to go around, we want to see them well designed and in keeping with their surroundings—a particular priority for rural and coastal communities. We are proposing planning reforms to create a quicker, modernised planning system that will be to all these communities’ benefit. These are all set out in the Levelling-up and Regeneration Bill and in a consultation on changes to the National Planning Policy Framework that ran earlier this year. In this, we specifically explored opportunities to unlock small-scale sites as well as strengthening the significant untapped potential of community-led development to meet housing need in rural and coastal areas. We are carefully considering the consultation responses—there were nearly 26,000—and hope that our response will provide some real potential for positive outcomes for our countryside and seasides.

Turning to the infrastructure levy, we launched—

--- Later in debate ---

[Baroness Swinburne (Con)]

I will need to get my noble friend the Minister to respond to the noble Lord in writing on that specific issue.

[Baroness Taylor of Stevenage (Lab)]

I am sorry to intervene once more on a brief point, before the Minister moves on to infrastructure levy. In relation to the council tax premiums, we are very grateful for the provisions in the levelling-up Bill that introduced them, but how will we make sure that it is the tier of local government that is responsible for delivering housing to which the funds will be generated. The danger is that they will get split between the various tiers of local government and not go where they are needed to provide housing. We could even use the levelling-up Bill to delegate the powers of right-to-buy. Can the Minister think about that as well?

[Baroness Swinburne (Con)]

I thank the noble Baroness. Not unexpectedly, I will need to pass that on to the Minister concerned. I suspect that during the levelling-up discussions that will be continuing in September, we will probably cover many of those points. I will pass them on to the department.

Turning to the infrastructure levy, we launched a consultation on a vital lever for delivering both affordable homes and essential infrastructure—the new infrastructure levy. It is proposed that the levy be a fixed, non-negotiable charge on developers, to capture more land-value uplift from new development for the benefit of local communities, to reduce delays and to ensure that developers meet their obligations. We also put forward in this consultation the idea of maintaining the approach that local authorities retain the right to seek affordable housing for smaller sites in designated rural areas. This consultation closed last month and we will publish our response once submissions have been properly reviewed.

I will try to cover a few of the questions that have been asked. If I miss any of them, I apologise. I will check Hansard and respond in writing to any of your Lordships’ questions that I miss. On the question asked by the noble Earl, Lord Devon, achieving biodiversity net gain for development has been part of planning policy since 2012 but, to ease the transition towards making it mandatory, the Government have extended the transition period for small sites until April 2024. In February, we announced £16.7 million of funding to help local planning authorities to prepare for BNG, in addition to the £4.18 million already distributed the previous year. We have also funded the Planning Advisory Service to support local planning authorities in their preparations. This will also help all those rural communities in their planning.

On the question of whether no-fault evictions will make long-term tenancies less attractive, on the contrary, our plans to ban Section 21 no-fault evictions and remove the existing ground through the Renters (Reform) Bill will stop landlords evicting a long-term tenant just so that they can convert their home into a holiday let for that peak season. On EPC enforcement, which was raised by the noble Earl, Lord Devon, we are committed to ensuring that the EPC system works as effectively as possible. We are also aware of some of the issues that he highlighted. The current regulations set the existing minimum standard of EPC E and include a number of exemptions to make sure that the costs and circumstances relating to improvements are proportionate and fair for landlords too.

The right reverend Prelate the Bishop of Exeter asked whether there would be a cross-departmental strategy. We already have cross-governmental working on rural areas. Unleashing Rural Opportunity, published on 6 June, sets out clearly the Government’s commitment to working for rural areas. Rural areas are at the heart of levelling up and Defra is the champion for rural affairs across government, publishing each year its Delivering for Rural England report.

A very large number of noble Lords asked about key workers. In their 2019 manifesto, the Government committed to bringing forward discounted homes for first-time buyers, prioritising local people and key workers. That is exactly what we are doing. Additionally, for first homes, a discount of at least 30% needs to be applied. Crucially, that discount is passed on to future purchasers in perpetuity.

I thank the noble Lord, Lord Best, for his solutions to many of the issues—it was nice to hear them rather than just all the problems—and for sharing his experience, particularly on things that are working well. I thank the noble Baroness, Lady Twycross, for her contribution on the empty homes initiative. I agree that this must be a joined-up approach, not just with government but with all local government levels and the private sector working together to deliver these matters as a priority.

The Secretary of State today announced the launch of the consultation on changes to permitted development rights, which will include proposals to give farmers greater freedom to change the use of their buildings to residential or commercial. This includes proposals on new and amended permitted development rights to ensure that such rights are fit for purpose and support further housing delivery. We are seeking views on amending the existing right for the change of use from agricultural buildings to residential use, to deliver more homes and apply to a wider range of rural issues.

With regard to all these questions, as I said, I will return in written form to any that I have not answered. To bring my words to a close—

[Baroness Taylor of Stevenage (Lab)]

My Lords, I am sorry to intervene again very briefly.

[Baroness Swinburne (Con)]

We are running out of time, so I would like to finish my concluding remarks.

To bring my words to a close on this issue, we are absolutely committed to getting Britain building in a way that delivers for our much-loved rural and coastal communities, championing affordability, home ownership, beauty and sustainability. Housing is very much an important part of this, alongside better access to high-quality jobs, efficient infrastructure and a pride in place that drives economic growth in these areas and ultimately ensures the best possible life for all in the UK. It is why we have invested £1.5 billion through the levelling up fund, the UK shared prosperity fund and the rural England prosperity fund in coastal and rural areas to date. This is levelling up; we are working to make it happen, and it is working. We completely understand the challenges for rural and coastal communities when accessing affordable homes, and I hope that everything I have covered today has addressed some, if not all, of noble Lords’ points.

However, there is a lot more that can be done. I look forward to continuing discussions away from the Chamber as we work to nurture and support these communities in our cherished countryside and coastlines.