Baroness Williams of Trafford
Main Page: Baroness Williams of Trafford (Conservative - Life peer)Housing and Planning Bill
Baroness Williams of Trafford Excerpts
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Williams of Trafford) (Con)
My Lords, I thank the noble Lord, Lord Foster of Bath, for voicing Lib Dem support and enthusiasm for right to buy—the first party to do so. I thank all noble Lords for their amendments and for taking part in the debate. I fully understand their desire to ensure that affordable housing is not lost from an area through the sale of properties under the voluntary right to buy, and the particular concerns relating to rural areas.
Amendment 57, in the names of the noble Lords, Lord Kennedy and Lord Beecham, will limit how housing associations are able to use the proceeds from sales under the voluntary right to buy by requiring the replacement to be of the same tenure and in the same area as the property sold. I thank noble Lords for their comments on this matter. However, we think it is important that housing associations should have flexibility and not be restricted in replacing like for like when this may not be the best solution for the area. One for one has never been on a like-for-like basis. We have always given that flexibility. By seeking to constrain housing associations’ discretion from Whitehall, we are limiting their ability to manage their assets to deliver their business and charitable objectives. We believe that these decisions are best taken by housing associations in the light of local conditions and need. My noble friend Lord Horam mentioned Westminster, which is very cognisant of its key workers, and the interventions it is making in conjunction with its local housing associations. This is the type of freedom we wish to see.
The noble Lord, Lord Kennedy, said that the replacement homes will not be affordable. Not everyone can live in exactly the location they wish to regardless of cost, be they social housing tenants, private renters or home owners. The best way to make homes affordable is to build more. I do not think any noble Lords disagree on that point. Our reforms will ensure that social housing is prioritised for those who need it most. Obviously, tonight we are talking about one-for-one replacement but there are all sorts of tenures of housing—for rent, for purchase, for low-cost rent—and housing associations will take all those issues into account when determining what types of houses to build.
Noble Lords asked whether we had achieved one for one, and made the point about two for one in London. In 2013 there were 3,054 sales under right to buy and by 2015 there were 4,017 starts, so I think noble Lords can agree that that was on an approximately one-for-one basis in terms of sales and new constructions. In London in 2012-13 there were 632 sales and in quarter 2 of 2015-16 there were 1,240 starts. I appreciate that noble Lords will immediately pick up the three-year time difference but under that agreement there were three years in which to replace the houses sold. In the rest of the country that figure has been achieved and in London it has been exceeded.
The noble Lord, Lord Kennedy, said that the flexibility around the tenure of the replacement units will erode the housing stock. Housing associations should be free to replace the properties sold with alternative tenures—they have done and they will do, I am sure—where this may be appropriate for the community they serve. This can include shared ownership, which we talked about in previous debates. Obviously, a much lower deposit is required for a shared-ownership property.
The question was asked: what does the deal mean for London and social housing in the capital? The largest London housing associations have all signed up to the agreement. As with the rest of the country, receipts from the sales will be reinvested in the delivery of new homes. I will say again that these are additional homes and, as noble Lords have said, the homes sold remain homes for the people who have bought them.
I now turn to Amendment 60. I fully understand the desire of the noble Baronesses, Lady Bakewell and Lady Pinnock, to ensure that the replacements promised under the terms of the voluntary agreement are realised. This amendment would also require the replacement property to be in the same area and of the same tenure as the property sold. The agreement reached with the housing association sector is that, nationally, for every house sold a new one will be built—I am happy to confirm that again—which will increase the overall number of much-needed houses in this country. However, the type of home and where it should be are decisions that are best taken by those housing associations, many of which will be local and will want to replace those homes locally.
Lord Kennedy of Southwark
Does the noble Baroness think it is regrettable that if this carries on, we will lose social housing in the centre of London? The risk is that it will go to the outer London boroughs, and here in the centre of London there will be less social housing for rent.
Baroness Williams of Trafford
My Lords, we have been through the various types of social housing products that are available for housing associations to bring forward. Obviously, shared ownership schemes may be very attractive for them to build. The figures that I gave noble Lords about starts and replacements in London demonstrate that over the last three years, the delivery has been two for one. I would imagine that local housing associations, including those in London, will want to provide a mix of tenure. I do not deny the point the noble Lord is making about London being so expensive.
Lord Kennedy of Southwark
The noble Baroness mentioned the figures for starts. Does she have the figures for where those starts are in London? They may not be available now, but it would be very helpful if she could provide them.
Baroness Williams of Trafford
I do not know by borough where those starts are but will, if I can, provide the noble Lord with the figures. It would be interesting to see exactly where they are.
Baroness Hollis of Heigham
The Minister emphasised, perfectly sensibly I think, that housing associations should have some discretion in how they meet local needs and what types of housing they provide. I also take the point about shared ownership. Will she extend that same freedom so that housing associations can replace housing with social housing at social rents rather than at affordable rents, given that affordable rents are nearly double social rents? At the moment, they are not allowed to by the Government. Given this new localist agenda for housing associations, will she restore their freedom to them?
Baroness Williams of Trafford
My Lords, affordable rent for low-cost houses is certainly a lot cheaper than market rents, but I will take that particular point away and perhaps we can return to it on Report. I will need to think about it.
Lord Foster of Bath
I am very grateful that the Minister has agreed to look at that issue. She will be aware that the current default tenure for new rental properties is the affordable rent model, under which the rent is about 80% of the market rent, whereas social rent is about 50% to 60% of the market rent. The concern of many of us is that if we do not have some control over this, all social rent properties will just disappear.
Baroness Williams of Trafford
That is the point that I am going to take away and confirm with the noble Baroness. However, I am making the assumption that if local housing associations felt that there should be some property for social rent, they would be at liberty to provide it. I will take the point away and come back to the noble Baroness and the noble Lord.
Lord McKenzie of Luton (Lab)
Perhaps the Minister could help me out on this. Great faith is being placed in housing associations. I accept that—they have a great track record—but in reality there will not be enough housing to deal with all the need in every area of the country. How does she expect housing associations to deal with that constraint?
Baroness Williams of Trafford
The noble Lord is right: in different parts of the country, there will be entirely different needs across different types of tenures. Housing associations will make a judgment on that, probably in consultation with the council, residents and possibly the local plan. I suspect that there are a number of mechanisms through which they will consider the types of housing to provide in that area. That is how they usually operate, and I do not see this to be any different. I promised to get back to noble Lords on the point about socially rented properties.
Lord McKenzie of Luton
That is helpful, but in so far as they do not fully cover the position, the residual risk and obligation will fall on the local authority to pick up the homeless, those who are disadvantaged and those who cannot access properties via housing associations. Is that right?
Baroness Williams of Trafford
There was a Question yesterday about homelessness. There are a number of government grants, some of which are directed through councils, either to prevent homelessness or to aid those who are homeless. Various mechanisms, including grants, already provide for certain types of housing, and I assume that that will continue.
Lord McKenzie of Luton
On the basis of our discussion before the dinner break, we identified that councils were picking up the tab for this policy. It seems that they will also have to pick up the tab when it fails people who have housing need.
Baroness Williams of Trafford
I would expect councils to work with the Government, housing associations and through the planning system to identify where needs are emerging. The noble Lord is absolutely right: there will be people in crisis need who the council will deal with through the various payments that they receive, such as discretionary housing payments. I would expect all those providers to be involved in meeting the needs of those in their area.
We should not be trying to constrain the freedom of housing associations to make sound business decisions about how to deliver their part of the agreement, or judgments about what is needed in various communities. Neither should we require them to identify replacement before a property is sold, because that would slow up the process for the tenant and in many cases would be impractical at the point of sale.
The noble Baroness, Lady Pinnock, made a point about right to buy at the expense of other tenures. I have made the point that we remain committed to build more affordable housing over this Parliament than from many years, including shared ownership and other forms of affordable housing. It is really important that hard-working people can buy affordable houses and get on the housing ladder. She also made a good point about the quality of the private rented sector. As we discussed under the rogue landlords clauses, the vast majority of landlords in the private rented sector are decent, law-abiding people who want to provide decent-quality accommodation for their tenants. I have a statistic here: 84% of private renters are satisfied with their accommodation. I appreciate that that means that 16% may not be but, generally, the private rented sector provides good-quality accommodation.
Baroness Hollis of Heigham
I do not know how the Minister can say that when more than 30% of private rented sector accommodation is below the decency standard.
Baroness Williams of Trafford
I just made the point that 84% of tenants are satisfied with their accommodation. I do not know where the noble Baroness gets her figure from.
Baroness Hollis of Heigham
It is probably 31% rather than 30%. I think it is from the house condition survey.
Baroness Williams of Trafford
I thank the noble Baroness for that statistic. One of the points that we made back in the group of amendments on rogue landlords was that the vast majority of landlords are decent landlords.
Lord Kennedy of Southwark
My Lords, I thank all noble Lords who have contributed to this short debate. It highlighted the problems we have with this part of the Bill. The noble Lord, Lord Horam, said that we are not like Paris or New York where people have been priced out of parts of those cities. They are unable to live there because they cannot afford to be there. I agree that we are not there, and I would never want us to get to that situation. London is one of the greatest cities in the world, and it works because you have rich and poor people living on the same street, living side by side and getting on very well together. That is how London works. It may not be the Government’s intention, but the Bill could create a situation where people are driven out of whole parts of London, which would be bad. We cannot have everybody doing key-worker jobs or in modest or lower-paid jobs all living in outer London boroughs. That would not be right. It worries me that we will get to that situation with the policy we are pursuing today.
We will come back to this on Report. I look forward to the information on housing starts that the Minister said she will send us. It will be very interesting to know where those starts are.
Lord Campbell-Savours
Talking about looking forward to information, last week we were promised some statistical information on starter homes, but we have not received it. I wonder what is happening.
Baroness Williams of Trafford
My Lords, I did promise the noble Lord information on starter homes. I will be bringing it forward in due course, but I have not got it ready for today. I have not forgotten my commitment to him.
Lord Kennedy of Southwark
With that, I beg leave to withdraw the amendment.
Baroness Williams of Trafford
My Lords, I shall speak to what I think is the amendment of the noble Lords, Lord Beecham and Lord Kennedy, and I am sure that we will come back to it if I have not quite got that right.
We have already discussed today the grant-making powers. Clause 65 will prevent an overlap of provisions in respect of the payment of grant by the HCA to housing associations and it will prevent grants being required to be paid twice under separate provisions. The clause does not place any additional duties on the HCA and will help streamline existing legislation. Clause 66 will ensure that everyone is clear about to whom and to what the clauses in this chapter apply.
I thank the noble Lords, Lord Kennedy of Southwark and Lord Beecham, for their amendment. We understand the wider concerns about more homes being bought as buy to lets, made clear in Amendment 58. As noble Lords will know, we are addressing those concerns through the new rates of stamp duty, which will be 3% higher on the purchase of buy to lets.
For the reasons that I set out earlier, we do not think there is a case for specific restrictions to be put in place for properties sold under the voluntary right to buy. The right to buy is about giving individuals the opportunity to buy a home of their own, and tenants who do so should have the same freedoms as any other homeowner. They are not vultures or wide boys; they are decent people who have worked very hard and who aspire to own their own home, and it would be wholly unfair to housing association tenants who buy their home to be prevented from letting it out if they want to or need to for family, work or any other reason. It could restrict their mobility and we do not think that that would be reasonable.
Furthermore, with a commitment in the voluntary agreement to deliver additional homes through new supply, it is not necessary to impose controls of this sort or to restrict the use of the properties being sold. I therefore hope that the noble Lord will agree to withdraw the amendment.
Lord McKenzie of Luton
Can the Minister help me out? She said that the solution to stopping properties being turned into buy to let was the new stamp duty provisions. However, if somebody acquires a property under the right to buy and then in due course vacates it and enters into a letting agreement, where does the stamp duty bite on that?
Baroness Williams of Trafford
My Lords, I was referring to people who bought homes as second properties. In other words, I think the general market in second properties as buy to lets will be dampened somewhat by the new stamp duty rules.
Lord McKenzie of Luton
I accept that, but I thought the Minister was offering that as a solution to the problem that Amendment 58 outlines.
Baroness Williams of Trafford
I was in a round about way, but I do not think that the noble Lord accepts that. In a round about way I was talking about the whole dampening of the market.
Baroness Hollis of Heigham
My Lords, when the Minister has a chance—perhaps over the weekend—to look at the “Dispatches” programme, would she like to reflect on the information given to that programme by experienced housing professionals? It concerns the implications of illegal deferred sales, in which the money does indeed come from the wide boys and is given to an older person to buy, and many of these people will be pensioners. The arrangement then allows the house to be reclaimed five or eight years on when the pensioner dies. It is a malign form of equity release—if you like, a rolled-up mortgage payment. I hope that she will look at that. Socially, the housing professionals—obviously, it was a television programme and I do not know what the other side of the argument might have been—scandalise me, and I think the Minister, as a local authority person, will also be scandalised at what is being reported there.
Baroness Williams of Trafford
I certainly look forward to watching that programme, as the noble Baroness suggests.
Lord Kerslake
I will have one last go at this. The point I was making is that it is often said that we are now achieving the delivery of the one-for-one policy. We are not. That is the definitive point I am making. Indeed, that is what the NAO says. The delivery of the one-for-one policy is very difficult to achieve in its current form. You would have to change fundamentally the way you think about the financing, and you would go back to the question of whether the numbers add up.
Baroness Williams of Trafford
My Lords, I thank the noble Lord, Lord Kerslake, for both his endeavours and his amendment, which proposes an equity loan scheme for housing association tenants in place of the voluntary right-to-buy discount. I understand that part of the reason for introducing this amendment was to reopen the debate about the funding of the right-to-buy discount.
An equity loan, by its nature, is not a discount and has to be repaid by the tenant. This is a very different offer—more akin to the Help to Buy scheme than to an extension of the right-to-buy scheme. This will inevitably make home ownership less attractive to the very tenants we are trying to reach: those on lower wages who are being priced out of home ownership because of high house prices.
We had a clear manifesto commitment to extend the right to buy to housing association tenants, and the voluntary agreement with the sector will give 1.3 million families the chance to purchase a home at right-to-buy level discounts. Our extension of the right to buy is about offering housing association tenants the same opportunity as council tenants. Providing equity loans to tenants, as proposed under this amendment, would not provide the same offer to them. We have been clear that housing associations will be fully compensated for the right-to-buy discounts offered to tenants and that this would be funded through the sale of vacant local authority high-value assets. They will be fully compensated. There are billions of pounds locked up in local authority housing assets. It is only right that when they become vacant they are sold, enabling the receipts to be reinvested in building new homes and supporting home ownership through the right to buy.
Lord Kennedy of Southwark
Why is it only right that they are sold? They should be used for other families who need social housing.
Lord Kennedy of Southwark
In your remarks, you said that it is only right that these houses are sold to provide receipts. Why are they not just used for other families who need a large council house?
Baroness Hollis of Heigham
The money is not going to stretch that far. We have already established that it is supposed to pay for expensive discounts, brownfield sites, and a replacement for local authority stock. The Minister says that local authority tenants have the right to buy: we did not expect housing associations to pay for their discounts, but we now expect local authorities to pay for the discounts on not only their own property being sold but housing association property being sold as well. I can see no fairness in that at all.
The noble Lord, Lord Kerslake, has produced a pathway forward. Indeed, if the Minister wished, one could add to it to make it more attractive. A right-to-acquire discount, which runs from about £6,000 to £9,000, could be an incentive before adding in equity loans. This can be modelled in different ways to make it attractive and reasonable, but not to clobber poorer local authority tenants to fund the giveaway discounts for people who are better off.
Baroness Williams of Trafford
My Lords, as I said earlier, this amendment is about replacing the discount with an equity loan. The mechanism for using high-value assets to fund both the discounts and investment in new properties will be considered in another grouping. Given how late in the evening it is, I hope noble Lords will indulge me and stick very purely to this amendment.
The Government are selling off assets they do not need and we expect councils to do the same—
Lord Stunell
My Lords, I hope that the Minister did not get the impression that, if a high-value house becomes free in Stockport, it is then not ready to be let to another tenant on the waiting list. It is not surplus property, it is empty property in the course of transition from one tenant to another. If the incoming tenant is to be told that the property is not available because it is being sold to participate in some government confiscation scheme, that does not provide the social welfare outcome which this House wants.
Lord Kennedy of Southwark
I grew up in a large council house in Southwark and my family benefited very much from that. Denying other, larger families that is just wrong.
Baroness Williams of Trafford
My Lords, as I said, we are coming to the detailed mechanism of high-value assets soon and that is certainly one thing we will be discussing. It is very important that noble Lords make these points at this stage in the Bill, because they will form part of the Government’s consideration. I am not, in any way, dismissing the points made. We will need houses and dwellings of different sizes, but the mechanism of how that will work will be set out in due course.
This is probably not the best hour or the best group of amendments in which to start discussing this, but I should like to address the points of the noble Lord, Lord Kerslake, about the value for money assessment. We are clear that we have done the right level of analysis to support the decision-making at each stage and to ensure that proposals would offer good value for money. We have done an economic analysis for the right-to-buy extension, taking into account the fact that that would be funded from the receipt of vacant high-value asset council sales, which shows that there would be a clear economic benefit. We have also undertaken an analysis for the voluntary right-to-buy pilot.
Lord Foster of Bath
I apologise as I recognise the lateness of the hour. Will the Minister acknowledge that many Members of your Lordships’ House and many members of the public have already had a pretty good sight of the proposal of the noble Lord, Lord Kerslake? What we have heard from the Minister so far is that the Government are rejecting it merely on the grounds that they want the scheme for housing association tenants to be identical to the scheme for council housing tenants. Will the Minister tell us—perhaps she could write to us between now and Thursday—what assessment the Government have made of the noble Lord’s scheme and what assessment they have made of the likely drop in take-up were the noble Lord’s proposed funding scheme introduced rather than the one proposed by the Government, so hated by Members of your Lordships’ House?
Baroness Williams of Trafford
I understand that point. As far as I am aware, the Government have not made an assessment of the proposal of the noble Lord, Lord Kerslake, simply because they made a manifesto commitment on the mechanism that I have just outlined.
Lord Beecham
The amendment of the noble Lord, Lord Kerslake, seems to represent a way forward. The noble Baroness indicates that it might not work or may not be necessary. I do not understand why she should reject it out of hand on the basis of her hypothesis rather than facilitate its introduction and test it. What is wrong with that? It would not necessarily replace the proposition that is contained in the Bill but it would allow a proper test of a proposition that she is sceptical about. The noble Lord is confident about it, and with all due respect to the Minister, some of us might be a bit more inclined to put our money on him than on the Minister’s advisers and those who have prepared her for this debate. I do not know what the noble Lord thinks, but I do not find the Minister’s response particularly encouraging.
Moreover, Clause 63 relates specifically to London and the Greater London Authority. That illustrates one of the difficulties of this debate, because London is a special case. It is arguable that some of the proposals in the Bill fit better in other parts of the country, as the housing pressures in London are very distinct. Can the Minister explain why Greater London should be singled out for special provision in Clause 63, whereas other local authority areas are not treated discretely, as it were? By the Greater London Authority I suppose we mean the mayor. Is London getting particular consideration? Why should that be the case when in the country as a whole there are the same demands and pressures to a greater or lesser extent? Why should London be treated differently for the purposes of this Bill?
Baroness Williams of Trafford
My Lords, the clause is necessary because the Homes and Communities Agency does not have the locus to make payments in relation to housing association properties sold in London. It is not being singled out for special treatment, but that is why the clause is necessary.
The reason I have rejected the amendment in the name of the noble Lord, Lord Kerslake, is, first, because of the very clear manifesto commitment. The amendment departs in nature and in aim from the manifesto commitment. Secondly—
Lord Campbell-Savours
The Minister keeps repeating that, but it is just not true. People will not have the right to buy. Only some people will have the right to buy. That is different.
Baroness Williams of Trafford
My Lords, the equity loan is not a discount. It is an equity loan. It is an entirely different mechanism. The discount gives an upfront reduction, whereas with an equity loan after five years you would have to start to repay it with interest. It is not comparing like with like. They are two different mechanisms.
Lord Kerslake
My Lords, I am very conscious of the hour, so I will keep this very short. I will make three points. First, the amendment was tabled in a genuine effort to deal with what I think is one of the most substantive problems with the Bill in its current form: namely, the decoupling of the right-to-buy opportunity from the means of funding it, which remains a running sore through the Bill which has not been resolved. It is a running sore because it is unfair and because we do not yet know—and, indeed, I think there are big doubts over—whether the numbers work.
Secondly, as the noble Lord, Lord Campbell-Savours, said, we have already departed from an absolutely like-for-like policy for housing associations and local authorities. That bridge has been crossed in what is in front of us now. It seems to me that the critical policy intent here was to give people in housing associations the opportunity to buy. The amendment does that, but it does not do it in a way that causes huge ructions and difficulties in other ways.
My third and final point is that it is clearly possible to deliver one for one in a different world. That was not the point I was making. The point I was making was that according to the numbers that we have, which have been tested by the NAO, we are not delivering one for one in the current arrangements. I have no confidence that we will do better on it given that nothing else changes within the proposals. So I ask the Minister to revisit this. I am confident that it is technically doable. It fits with the intent of the Conservative Party manifesto and it addresses some real difficulties with the Bill in its current form. Having said all that, I will of course not move the amendment.
Lord Kennedy of Southwark
My Lords, looking at the time, I intend to be very brief in moving my amendment, your Lordships will be pleased to know. Amendments 59A and 82B in this group are in my name and that of my noble friend Lord Beecham. Amendment 59A seeks to add a duty on the Regulator of Social Housing so that, when monitoring compliance,
“the Regulator must make a report where a community-led housing provider … has used grants made by the Secretary of State to facilitate or meet a right to buy discount”.
Amendment 82B would put in the schedule exactly what is meant by community-led housing scheme, for the avoidance of doubt.
Noble Lords all around the Chamber have expressed support today for co-operative and community-led housing, but without my Amendment 59A we would have very little information about what is happening in this part of the social housing sector as a result of the policies being implemented in this part of the Bill. The group also includes a clause stand part debate. With that, I beg to move.
Baroness Williams of Trafford
My Lords, I will be equally brief. Amendment 59A, in the name of the noble Lords, Lord Kennedy and Lord Beecham, would require the Regulator of Social Housing to monitor and report where a community-led housing provider or TMO had used grants made by the Secretary of State in respect of a right-to-buy discount.
Let me be clear again that TMOs are not part of the right-to-buy arrangements. Under the voluntary right to buy, the landlord/tenant relationship is with the property-owning landlord as a registered provider, and the tenant would exercise their right to buy against that landlord. The amendment does not make sense in that landscape. If the concern is about different tenures—social tenants and owner-occupiers—being part of a TMO, there is no reason to believe that tenants and owners could not come together in this way.
I appreciate that the noble Lords, Lord Beecham and Lord Kennedy, want to protect TMOs and other community-led organisations that are not landlords so that they continue to help tenants to play an active role. The voluntary right-to-buy agreement contains protections that allow housing associations discretion not to sell properties that are important to their communities and clients.
The purpose of Amendment 82B is to create a definition of community-led housing, but there is no need to, as it is a colloquial umbrella term to cover a range of different and distinct structures and organisations, such as fully mutual co-operatives, community land trusts and tenant management organisations. The Government very much support community-led housing, and these bodies have distinct and specific legal definitions. Fully mutual housing associations are defined in Section 5 of the Housing Act 1985. Community land trusts are defined in statute in Section 79 of the Housing and Regeneration Act. TMOs are defined through the Housing (Right to Manage) (England) Regulations 2012, Part 1 Section 3.
Additionally, the organisations are different in nature. Fully mutual housing co-ops will generally own their homes, community land trusts may or may not, and TMOs will generally act as a managing agent for housing owned by a local authority. Imposing an additional overarching definition would be unnecessary. I ask the noble Lord to withdraw his amendment.
Lord Foster of Bath
I apologise but have an incredibly quick point to make. There is also a clause stand part debate in this group on Clause 64. I have read Clause 64 and the Explanatory Notes on it many times. It seems, basically, that the Secretary of State will draw up a set of criteria and tell the regulator to check what the housing association is doing against those criteria. The criteria will probably be those contained in the deal between the National Housing Federation and the Government, but they may be different and could be changed. Could the Minister provide a more detailed briefing in the fairly near future on what all of this means?
Lord Kennedy of Southwark
I thank the Minister. That is very helpful. We put the amendments down because there is concern in the housing sector about what is happening in this clause, so her comments are very useful and welcome. I am very happy to withdraw my amendment but again place on record my thanks to the Minister for the way she handled the debates today. I beg leave to withdraw the amendment.