Housing and Planning Bill

Baroness Valentine Excerpts

Tuesday 26th January 2016 Lords Chamber

[Baroness Valentine (CB)]

Over the past decade, house prices in London have doubled, while private rents have increased by more than a third. But prices are the symptom, not the cause. The problem, as we all know, is that supply is not keeping up with demand. London is expanding by a population the size of Birmingham every decade.

It is a Conservative Party mantra, evidenced in this Bill, that home ownership is good. And lest I be thought to be knocking the Government, I should stress that I wholly support an aspirational culture that encourages people to climb the economic ladder, challenging the mindset that says you have to remain impoverished, whether by facilitating starter homes or encouraging the right to buy. But let us face it, having homes classified as starter, social or affordable is not the point. Housing will remain rationed while we fail to build enough, and we are simply talking about who gets first dibs while the underlying price keeps going up. If we take starter homes in London, Shelter has estimated that you would need to be earning £75,000 to afford a mortgage on a starter home. The average London salary is £28,000.

As chief executive of London First—and I am on the board of Peabody Trust—we are so worried about the lack of housing in London that we have launched a new campaign, Fifty Thousand Homes, which will seek to hold the new mayor to account on not just talking about doubling housebuilding, but doing it. We will solve this crisis only by turning on all the policy taps at once, whether that is availability of land, allowing councils to borrow or supporting housing associations.

Let us look at the consequence of the Government’s approach. First, they seem to be very free with other people’s assets. After many shenanigans, the housing association right-to-buy scheme has become voluntary, but the poor old local authorities have to sell assets to supply the discount. And then they still have to build two houses for one in London. I would be interested to see the audit trail on whether these two-for-one houses end up being net additional. Perhaps this is something the National Audit Office could investigate.

Furthermore, the amount of social housing under Section 106 agreements will potentially reduce to subsidise starter homes, thus providing no net benefit. When it comes to housing associations, I quote a Moody’s announcement of July last year:

“Sector outlook turns negative due to adverse policy decisions”,

which followed the announcement of the 1% annual reduction in social housing rent. This makes it more difficult for housing associations to raise the money they need to build the homes we want. The Government are, though, right to put more pressure on public bodies to sell off underused land for housing. The Bill before us introduces a requirement for public bodies to prepare reports of surplus land, which I welcome. However, it needs to go further.

Given what a complicated business getting housing built is, I believe that local government, in the form of the Greater London Authority for London, but also in Birmingham, Manchester and elsewhere, should be significantly empowered to make the complicated judgments between starter, market, affordable and social housing, and should be given the role of taking this land to market, with the right conditions on it. The Chancellor introduced the London Land Commission last year. All cities with housing shortages should have their own land commissions and the surplus assets should be passed to these cities, which know best how to provide housing for local needs.

Speed is critical. Round the corner from me, Putney Hospital closed in 1999. It took 11 years before the council bought it, in 2010, with the intention of building a school and flats. Demolition did not begin until 2014 —15 years after the closure.

The Government need all the help they can get in increasing housebuilding, including making sure we have the skills to build. No one participant can solve it. I encourage the Government to do all they can to make friends with people who want to help them solve the problem. I cannot say that that is where current policy has led them.