Affordable Housing: London
Debate between Barry Gardiner and Eilidh WhitefordWestminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
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Dr Eilidh Whiteford (Banff and Buchan) (SNP)
It is a pleasure to follow such a comprehensive commentary on London housing policy. The critique from the hon. Member for Westminster North (Ms Buck) was well put together.
The long-term failure of successive Governments to address the underlying problems in the housing market is undoubtedly more evident in London than elsewhere in the UK. I agree with Members that certain aspects are unique to London, but for the most part this city is just the epicentre of problems affecting the whole UK to a greater or lesser extent. The crisis here in London reverberates to the other nations and regions of the UK.
I warmly congratulate the hon. Member for Brentford and Isleworth (Ruth Cadbury) on securing this debate on a set of issues that have an acute impact on her constituents. I assure her that there is a shared interest in addressing the problems in London, because they affect all of us. Every time the Library updates its briefings on London’s housing crisis, the statistics get more and more shocking. It is clear from today’s debate that the key structural issues are not new. There is a chronic under-supply of new homes, an absolute shortage of property in London and—just as problematic—an ever widening gulf between earnings and house prices, which is the affordability problem that has been the focus this morning. Add to the mix a private rental sector that is out of control and we have a recipe for the housing crisis currently faced by the people who live and work in this city.
Like other MPs whose constituencies are many miles from here, I am not a disinterested observer. I have to live in London for more than half the week during parliamentary Sessions, so I have first-hand experience of London’s housing and rental market, although I am aware that MPs have a much easier time than most prospective tenants. I have repeatedly seen the problems faced by staff members and others who live here permanently, and I recognise the issues that colleagues have highlighted today that affect their constituents. Those issues all relate to affordability. They include short-term and insecure lets, but also landlords who do not fix things, deposits that do not get returned for months after a tenancy ends, if at all—in spite of the deposit protection scheme that is supposed to stop that—people having to sleep on their friends’ sofas and floors and, above all, soaring rents. Every year, or every time a rent has to be renegotiated, the rent goes up.
Of course wages—certainly those in the public sector—have stayed static for some years now, and in many cases they have fallen in real terms. There is an ever greater squeeze on the incomes of tenants, who are left in a difficult position, having to work out whether the costs and hassles of moving and the extra commuting costs outweigh the disadvantages of staying put. That causes people enormous stress, upheaval and insecurity and it destabilises communities. As other Members have mentioned, it puts untold pressures on families with children. We have not got anywhere near measuring the cost of uprooting children in terms of their future prospects.
It goes without saying that many private sector tenants have no medium-term prospect of their owning a home anywhere near where they work, and even having a stable home is challenging for them. Even people in London with well-paid jobs—those with well above average wages and, as we have heard today, some of the City’s highest-paid professionals—find themselves in the invidious position of spending so much of their take-home pay on exorbitant private sector rents that saving for a deposit at the level now required is all but impossible. People have to eat, too. The cost of living is already high in this city, regardless of housing costs.
If the average home in London now costs more than half a million pounds—16 times the average London salary—what hope is there for young people trying to get on the housing ladder, many of whom are already carrying a mortgage in student debt? In what universe is that achievable or even desirable? Who wants to be saddled with a debt of that level in the current climate of economic uncertainty? Every time the Chancellor stands up in the Chamber, he talks about bringing down the debt. I am not the first to observe that meeting his own debt reduction targets is something that he has conspicuously failed to do. The levels of personal debt that individuals now need to carry in order to own a home or even buy a starter home, not only in London but in other hotspot areas too, are frankly crippling and completely unsustainable.
The Government’s obsession with home ownership is undermining the affordable rented sector, where, in my view, there is tremendous progress to be made in London for anyone willing to make the tough policy decisions. Points were well made earlier by the hon. Members for Hackney South and Shoreditch (Meg Hillier) and for Hammersmith (Andy Slaughter) about the use of public land and the need to measure the outcomes of house building programmes.
In the 2015 Queen’s Speech, the Government confirmed that they plan to force councils to sell off their low-rent homes in high-value areas, mostly as a means of financing the extension of the right to buy to housing association tenants, and—in theory at least—to incentivise councils to build more homes. However, doing that will not achieve either of those things. Its main outcome will simply be to reduce the number of homes for social rent in areas where low-cost housing is most needed and to force those on lower and average incomes to move further away from the communities where they live and work.
We have seen in the past that selling off social housing stock cheaply has long-term adverse consequences. The big sell-off in the ’80s and ’90s meant that councils all but stopped building new homes. It made no sense whatsoever to use public money to build new homes and then practically give them away. It has meant that now, right across the UK, there is a chronic shortage of homes for social rent for those on low incomes—those in low-paid jobs, those on zero-hours contracts and those whose ability to work is impaired by health problems. Some of those people will never be eligible for mortgages and will always need affordable homes to rent.
One of the great ironies is that, 20 to 30 years on, many of the same properties that were bought by tenants are once again properties for rent, but this time in the private sector, being let for market-level rents, often to people who would be eligible for social housing, if any was available. As a consequence, we have seen soaring costs for local housing allowance and its predecessor benefit over the last two decades, disproportionately concentrated in London and the south-east, driven by a private rental market that is simply out of control.
As numerous Members have pointed out, the people who have been most badly let down by all this are the younger generation. Even those with good jobs, who have worked hard for qualifications, have no realistic prospect of buying a home in which they can raise a family. We see adults living with their parents, not just through their 20s but well into their mid-30s, desperately trying to save. We see young couples moving so far out of London in order to put a roof over their children’s heads that they severely compromise their family life by enduring hours of commuting each day.
Barry Gardiner
I am delighted that the hon. Lady has talked about the plight of young people in London, but does she realise that this is not just about young people? A constituent who had been living in the same property for 14 years came to me recently, having received a section 21 notice. At the age of 72, he and his disabled wife have not been accepted by the council and are sofa-surfing with friends who live in my constituency. It is not just young people but the elderly who are suffering because they are not accepted as priority-need homeless.
Dr Whiteford
The hon. Gentleman makes a very important point. Frankly, what people are being put through in this day and age is quite disgusting.
The situation we have created is not good for people, for families, for people’s employers or for communities. It is not good for anyone and is completely unsustainable. The UK Government’s current direction of travel risks compounding the mistakes of the past, fuelling house price and rent increases, and failing to deal with the underlying lack of supply on anything like the scale required. All the fancy help-to-buy schemes in the world will only fuel personal debt, drive house prices higher and continue to inflate rents unless we actually build more homes to meet demand and take action to ensure that we have an affordable housing stock for people on normal salaries.