Brandon Lewis
Main Page: Brandon Lewis (Conservative - Great Yarmouth)Self-build and Custom Housebuilding Bill
Brandon Lewis Excerpts
Lyn Brown (West Ham) (Lab)
I thank the hon. Member for Stone (Sir William Cash) for his interest in the Bill and for his speech.
As hon. Members know, the Opposition support the Bill and see no reason to support the amendment in that form. We are convinced by the points made by the hon. Member for South Norfolk (Mr Bacon) and are content with the Bill.
The Minister of State, Department for Communities and Local Government (Brandon Lewis)
I, too, thank my hon. Friend the Member for Stone (Sir William Cash) for taking an interest in the Bill and for working to ensure that the Bill is as strong as it can be. He suggests that there should be a statutory consultation period of three months before any guidance is issued by the Secretary of State. I thank him for raising the important issue of consultation and guidance, and for giving me the chance to explain the Government’s position, which I hope I can.
I know from the experience of our right-to-build vanguards that it is important that any national framework for the register is sufficiently flexible to reflect the considerable differences—my hon. Friend the Member for South Norfolk (Mr Bacon) outlined the differences—in the scope for custom build in different parts of the country. It is important that we seek the views of a wide range of interested parties, particularly when we are establishing the detailed framework, but I am not convinced of the need for a statutory consultation period before the issuing of guidance. I am afraid that the Government cannot support the amendment.
Statutory consultation can have a valuable role, but it is not necessary or desirable for every Government action. When used unvaryingly, it can have a detrimental impact on policy and create significant delays. That is not to underplay my understanding of the point that my hon. Friend the Member for Stone makes—I acknowledge his point.
In many instances, the Secretary of State may issue guidance to local government without being required to consult local government and other partners before doing so. For example, we are not statutorily required to consult on national planning policy guidance. In the case of the Bill, we believe that statutory consultation would only delay the implementation of the custom and self-build register that the Bill seeks to establish. The explicit requirement in the amendment for at least a three-month consultation period seems excessive, especially given that our current consultations on planning policy matters are normally around six to eight weeks, which gives local authorities and others sufficient time to respond.
My hon. Friend’s amendment would also mean that the Government must consult for a considerable period on even minor revisions to the guidance, which would clearly add unnecessary bureaucracy. Arguably, it would increase the burden on local authorities. My hon. Friend wants neither of those things and we strongly want to avoid them.
To deal with what my hon. Friend desires, local authorities have been key influences in the development of the policy, as we have demonstrated through the right-to-build vanguards. My hon. Friend the Member for South Norfolk outlined how important they have been in the development of the policy—I will return to that on Third Reading, which will I hope will happen shortly. We fully intend to maintain this close link with local authorities and other partners in implementing this policy, including in drawing up the guidance.
With those few words of explanation, I hope my hon. Friend feels reassured enough to be able and willing to withdraw his amendment.
Sir William Cash
I have listened with enormous care to what the Minister has said and to the shadow Minister. My intention from the very beginning has been to make sure that the Bill has proper consideration and that it receives all the assistance it needs to get through. I have every confidence that that is exactly what will happen, and I congratulate my hon. Friend the Member for South Norfolk (Mr Bacon) on his proposals. In the circumstances, having listened to the arguments, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Third Reading
Brandon Lewis
I start by endorsing the cross-party harmony and join the hon. Member for West Ham (Lyn Brown) in congratulating my hon. Friend and neighbour the Member for South Norfolk (Mr Bacon) on introducing the Bill. He has carried it through to this stage with his usual passion and individual flair—including mince pies in Committee, which I am still working off on my training bike. It is a testament to my hon. Friend’s passion as well as the necessity for legislation that the Bill has been received so positively across the parties in this House. I am particularly pleased about the cross-party consensus on the Bill’s aims, which will help to give the custom build sector further impetus across the country, and I especially welcome the Opposition’s support.
We had a good debate on Second Reading and in Committee, so I shall not go into too much detail on the Bill’s content. If the House will allow me, I will take a few minutes to explain why the Government support the Bill so strongly and how it will help to take forward our proposals for a new right to build.
The Government are committed to increasing housing supply and helping more people achieve their aspiration of owning a home of their own. When we came into office, the housing market was stalled. In fact, we inherited from the last Labour Government the lowest level of house building since, I think, 1923, which puts things into context. Prospective buyers could not get mortgages, and developers were not building. We have spent the last four and a half years fixing it, and we can see that our efforts are paying off.
I appreciate the comments of the hon. Member for West Ham on the Lyons review and the aspiration for 200,000 homes to be built. I shall come on directly to the number of homes in a few moments, but let me politely point out that this is the third target that Labour has set in the last 12 months. I will be interested to see where the level falls to the next time Labour announces a housing target.
The facts are that we have seen 500,000 new homes built since April 2010 and the number of starts on new homes last year totalled 139,500—up by 15% on the previous year and the highest number since 2007, which should provide some context. The construction industry, furthermore, has been hiring at the fastest rate since 1997. I am sure that my hon. Friends will have seen that the number of first-time buyers is at its highest since 2007, according to a Halifax review published just this week. That is proof that our policies, such as Help to Buy, are working.
We can see light at the end of the tunnel, but there is still more to be done. We want to increase house building rates further and encourage improved standards of design and sustainability. I believe it is through greater diversity in our housing market that this can be achieved. With more competition, more new entrants and more new development, we will increase the speed and, importantly, keep, develop and improve the quality of house building in respect of build, construction and design.
Our volume house builders play a vital role in our housing market, but we know that there is no “one size fits all” model for our market. As the economy and the construction industry recover, we want to see more small and medium-sized builders back in the market. We know how important they are. In addition to their role in increasing the supply of housing, they provide local jobs across the country, as Members will know. They provide a more personalised product and services for local people, and they strengthen the capacity of the house building sector more broadly. They are the reason for the changes in planning terms for small sites, which we announced just before Christmas and they are direct beneficiaries of this Bill.
We are already actively supporting the small and medium build sector. Our support for smaller builders through our £500 million “Get Britain Building” investment fund for smaller builders’ work has already helped to deliver thousands of new homes and to commence work on a further 12,000 sites. We have opened our £525 million builders finance fund to small and medium builders to deliver schemes as small as five homes. Again, that could benefit directly from the Bill and the work behind it.
However, we want to look at more innovative ways of diversifying the market such as the custom build sector, which leads me directly to why we are all here today. I strongly believe that custom and self-build housing can play a central role in securing greater diversity in the housing market and help us to deliver the homes people need. We know we live in a country where there is high demand for custom and self-build. That could be met by the small and medium building industry, as I have outlined.
According to research by the Building Societies Association, one in three people in the UK is open to building their own home, and 1 million people want to build their own home in the next year alone. In fact, according to the website PlotSearch, January is apparently the peak time for subscribers to plot-finding services. It is no surprise that this high level of interest exists; custom build can be cheaper, greener and better designed than conventional market housing.
As I mentioned on Second Reading, a report published by the Lloyds Banking Group in 2013 concluded that self-builders can save between 20% and 25% on the cost of the equivalent home on the open market. According to the National Custom & Self Build Association, a typical three-bedroom home costs just £150,000 to build. It is interesting to think about some of the available options. Just before Christmas, I visited my hon. Friend the Member for South Norfolk in his constituency to visit Beattie Passive, a Norfolk company that showed us how it works. If I recall correctly, it let me have a go at trying to build one of the homes that it can supply. The kit can be supplied for somebody to build their own home at a cost of just £7,500. That makes house building, and custom house building in particular, affordable at a level that people often do not realise is available to them. For many custom and self-builders, the key advantage is the potential for more energy efficiency than can be achieved in typical developments. The Beattie Passive homes are a good example of that. Home owners who can influence the end product tend to have a longer-term interest in their properties, which may result not only in more energy-efficient homes, but, frequently, in better design and increased investment in the community. In fact, custom and self-build residents remain in their homes for about 14 years longer than the average resident.
Despite the advantages of custom building in diversifying the market and producing high-quality, sustainable homes, the market is stymied at present. Custom build currently accounts for only about one in 10 homes in Britain, just over 10,000 a year. That is a far lower proportion than we see in the United States and in other European countries. I think that the state of the market is caused by three main barriers: the limited availability of land, limited access to finance and advice, and the problem of red tape.
Since 2011, the Government have worked with the industry to overcome those barriers and develop the custom building sector. We want to double the output of the sector over a decade, so that well over 20,000 homes a year are built. I have been talking to finance houses—in fact, I did so only this week—about how we can make finance more accessible to those who wish to develop and build their own homes.
We are already encouraging the provision of more land through the planning system. Since 2012 councils have been required, through the national planning policy framework, to assess and plan to deal with the need for housing, including the requirements of those who wish to build their own homes. We have identified 12 Government-owned sites, which have been released for custom and self-build development by the Homes and Communities Agency.
Sir William Cash
The Minister has just mentioned the national planning policy framework. As he knows, today I am due to present a Bill that touches on that issue in a variety of ways, and in a fairly investigative fashion. Does he agree that, whatever instructions may or may not have been given to the Whips in respect of that Bill, it will be possible for us to continue our discussions about the planning and land implications of the NPPF at some future date?
Brandon Lewis
Absolutely. I am always happy to continue any discussion with my hon. Friend, and that certainly applies to discussions about how we can ensure that our planning system is fit not just for today but for tomorrow. My hon. Friend’s intervention gives me another chance to make the point that local authorities who are making plans for housing provision in accordance with the NPPF should concentrate on what housing is appropriate for and required by their areas, and that custom building should form part of that.
Developers have already been selected for six of the 12 Government sites. They include the award-winning Trevenson Park site in Cornwall, which Igloo Regeneration is currently developing. The Park Prewett site in Basingstoke is the largest of the custom building sites in the programme, and will generate 1,250 new and affordable homes. We can see the potential for more custom building in sites such as Ebbsfleet and Bicester. Yesterday I visited Brighton and met representatives of KSD Housing, which has a fantastic “modular build” proposal that could work well in the custom building sector as well. It could provide a very good model for the delivery of, in particular, affordable housing in the future.
I mentioned my visit to the constituency of my hon. Friend the Member for South Norfolk to see the housing built by Beattie Passive. That company has also built homes in my own constituency—council homes. It is great to see, under this Government, the first council homes to be built in Great Yarmouth for a very long time. Beattie Passive is able to work with the custom and self-building industry not just to deliver homes, but to teach people how to build their own homes. It enables them to develop new skills as well as new houses. That is important because, although we all enjoy watching great programmes such as “Grand Designs”, many people do not realise that custom building and self-building can be affordable. It is not necessary to have a lot of money in order to build a home; indeed, it is possible to buy a home-building kit for £7,500. The Bill does a great deal to make people more aware of the options that are available.
We are working to improve access to finance for all who are involved in custom and self-build. Following on from previous funds, earlier this year we launched a £150 million five-year serviced plot investment fund to finance up to 10,000 plots. We are also exploring with lenders how we can increase the number of custom and self-build mortgages. More lenders are already offering self-build loans, and gross lending on self-build is predicted to increase this year to £1.9 billion annually. It is clear from our discussions with lenders that the more that this sector develops, the easier it will be for them to assess it and ensure that mortgage funds are available. They are very interested in the sector.
Mr Bacon
Will the Minister take this opportunity to commend Mr Stephen Noakes, who is the chair of the Council of Mortgage Lenders and the head of mortgages at Lloyds Bank? He has not only supported the work of the all-party parliamentary group on self-build, custom-build and independent house building, but has demonstrated a sustained commitment to developing mortgage products for the self-build sector.
Brandon Lewis
I am happy to commend Mr Noakes. My hon. Friend has made a good point. Lloyds, Nationwide—whose representatives I met this week—and, indeed, other finance houses are very interested in this market, and want to see it grow. It is obviously a challenge for them to make assessments and provide funding on the basis of those assessments, but they are also keen to ensure that the market is as de-risked as possible, so that their finance can be as affordable as possible for consumers who wish to build their own homes.
Advanced technology and advanced manufacturing may provide one solution. If the National House Building Council and other organisations recognise that if a property carries a lower risk, it will be a better lending proposition for mortgage companies. Another solution is the provision of land specifically for local planning purposes—the Government sites that I mentioned earlier are an example of that—so that mortgage companies can focus on a particular area rather than adopting a scattergun approach. All those measures would help the market to develop. The more the market develops, the more secure it becomes, and the better the prospects become for lending and the affordability of lending.
We are actively reducing the amount of red tape. Self-builders are already exempt from the community infrastructure levy, and last year we announced additional changes to section 106 affordable housing contributions. Those changes have the potential to save custom and self-builders many thousands of pounds.
We are continuing to work closely with the National Custom and Self Build Association. I join others in congratulating the association, and thanking its members for the excellent work that they have done in promoting the sector. We are also working with others in industry to increase the amount of information that is available to consumers. The online self-build portal should be the first port of call for anyone who is interested in custom and self-build. I am sure that it will provide more information and advice this year, and that that will be enormously helpful to all who are interested in custom and self-build but lack the experience or confidence to embark on a project. We can see that those polices are having an impact. According to the National Custom and Self Build Association, more than 5,000 new plots are in the pipeline. However, if we are to achieve our aim of doubling the size of the sector over the next decade, we shall need to go further.
We believe that the main barrier that is stopping more people building their own homes is the lack of suitable plots of land. That is why, in the autumn, we engaged in consultation on a new right to build that would give prospective custom builders the right to a plot of land from their local council for the first time. The consultation set out our vision for that right. Eligible prospective custom builders will be entitled to register with their local planning authority for a suitable, serviced plot of land on which to build or commission their own homes. The demand on the right to build register for custom build will be taken into account in the preparation of local plans, so that there are appropriate planning policies for the provision of enough plots of land for custom build. Registered custom builders will be offered suitable plots of land—with planning permission—for sale through the local planning authority, at market value.
Many prospective custom builders, local authorities and members of the custom building industry, as well as other professional bodies, have contributed to our consultation, and we are now considering all the responses. We are working with 11 local authorities to test the way in which the right to build will work in different contexts throughout the country. I want to clarify that our intention is to legislate for the full right to build in the next Parliament. This is a new area of policy that requires careful consideration and we want to make sure that we get it right. The Bill is an important part of this process.
The role of local authorities in bringing forward land is particularly novel and needs further consideration, and we want to make sure that the right forms an integral part of the planning system. It must support the local plan making process and existing planning designations. This will continue to prevent inappropriate development and protect precious landscapes such as the green belt. That is why we are proceeding carefully and will ensure that the views from the consultation and the vanguards inform the full legislation for the right to build. However, this Bill will legislate for the first element of the right, namely that local authorities will be required to establish registers of custom builders in their area.
I will explain our proposals for the register. First, the register will be a useful indicator of the scale and nature of demand for custom build in each local area. It builds on national planning policy by putting the requirement on a statutory footing—something I know Opposition Members fully support. It will also collect valuable information on the precise nature of this demand. By asking what size of plot, what location and what price range, local authorities and the custom build industry will be more able to respond to demand for custom build.
The register will also become a useful tool in the making of local plans. Many local authorities have been proactive in planning for custom and self-build, as national planning policy requires. However, as Minister for housing and planning, I know of aspiring custom builders who have contacted me as their local authority is not planning to meet their needs. By creating the register and creating this statutory duty, we will improve the local plan-making process so it meets the needs of custom builders. We must ensure that there is enough transparency to allow the information on the nature of demand for custom build to be used by the custom build industry, while, obviously, the data of individuals are well protected. The register will be useful in this way only if it demonstrates actual local demand for custom build plots. Local authorities should be confident that those on the register genuinely intend to build or commission their own home and consequently have the financial means to do so—which touches directly on the point my hon. Friend the Member for South Norfolk made a few moments ago.
This is why we are proposing that eligibility criteria be set out in the regulations that flow from this Bill. That will ensure that local authorities have the right to reject an applicant, should they fail to meet these eligibility criteria, and be confident that applicants will not waste their valuable time and energy. Local authorities should also have the power to remove individuals from the register in certain prescribed circumstances, to ensure that it remains an accurate and reliable source of information.
Of course, we are keen to allow a necessary degree of flexibility. There are areas of the country, such as areas of low demand, where the local connection test is counter-productive. We want the register to help develop affordable custom build housing and propose that individuals can register through registered providers.
The Bill will require that local planning authorities publicise their register. Custom builders must be aware of the register if it is to provide information on the nature of demand. The Secretary of State has the power to issue guidance to ensure that registers are adequately publicised. How precisely the register is publicised will be at the discretion of the local authority, once this guidance is taken into account.
We are currently testing how the custom build register and the entire right to build will work in practice with 11 vanguard local authorities across the country. There was a high level of interest from local authorities to pioneer the right to build. I believe we are now working with some very innovative local authorities who are a great example across the country. I particularly appreciate the diversity of authorities that submitted expressions of interest.
These vanguards are committed to establishing registers and making suitable plots available to those on the registers. They vary in location from Teignbridge to Oldham. They vary in size of project from thousands of units to single figures. They vary in context from cities, such as Sheffield, to national parks, such as Exmoor and Dartmoor. They also vary in experience. Every single vanguard brings something new to the table.
I also want in particular to mention South Norfolk, the local authority where my hon. Friend’s—he is the owner of the Bill—constituency lies. It shares his passion and is getting other authorities and institutions involved in custom build. I am sure that we will see much more custom and self-build demand met in that area in future. Its work alongside neighbouring local authorities, including with the Broads Authority, is an excellent example of co-operation in more complicated administrative areas.
All these vanguard projects will help design the right to build that we will legislate for in the next Parliament. However, they will additionally inform the regulations for this Bill, and I am pleased to say that all the vanguards intend to have custom and self-build registers, like those that this Bill would require, online this month. The vanguards will also give us a greater understanding of the resource requirements of the register. This experience will inform the regulations of this Bill to ensure that the costs of the register are proportionate and not burdensome on local taxpayers. In case anyone is concerned that we have somehow “forgotten about London”, we are working with the Greater London authority to test the feasibility of a pan-London register.
Our experience with the vanguards and the responses to the consultation will help us to ensure that the right to build supports the development of affordable housing as well, and I have outlined today the £7,500 example from by Beattie Passive. We want the right to build to support the development of affordable housing.
I am pleased to say that there are examples that demonstrate that this is possible across this country. Many registered providers have produced affordable housing and shared-ownership schemes through custom build, such as Coastline Housing in Cornwall. Some of our vanguards are working with registered providers to bring forward custom build development in this way. Custom build affordable housing offers a unique approach to shared ownership as the level of finish that the homeowner takes responsibility for can give them a greater equity share and help get them more firmly on the property ladder. I saw a direct example of this with a housing association I visited in the constituency of my hon. Friend the Member for Norwich North (Chloe Smith) just before Christmas.
New affordable housing solutions are one result of the diversity that custom build and this Bill will bring to the market. If we look to Berlin, we can see how much further this could go. The building groups of Berlin, formed of ordinary citizens, have come together with support from the local government, and have now produced thousands of homes, many in the last five years. If we look to Holland, we see another model of custom build development for urban extensions. I have touched on yet another model that could significantly improve build-out rates, which custom build opens up. Advanced housing manufacture harnesses technology to increase the speed of construction without sacrificing design. It is used worldwide to support housing delivery, but is a relatively small industry in this country. Custom build is the perfect part of the sector to see it develop and to benefit from it. Nevertheless, housing groups, such as the Accord Group in Birmingham and others I have mentioned, are taking the lead in developing the advanced housing manufacture industry, and they can produce a wide range of high-quality and environmentally friendly timber frames, and specialist insulation and innovative techniques that can be put up in just one day, as I have seen for myself.
I have explained how custom build could change the housing market with our support. This Bill will put in place the legislation for the first part of the right to build, allowing individuals wishing to build their home to register with their local authority for a suitable plot of land. As such, it builds on national planning policy and guidance which already requires local planning authorities to identify and plan for local demand for custom build in their local plans. I hope, following the outcome of the consultation and the experience of the vanguards, that we will be able to bring forward legislation in the next Parliament to implement the full right, giving registered custom builders the opportunity to be offered a suitable plot of land for sale through their local council.
With that in mind, and clearly with the support of the entire House today, I congratulate my hon. Friend the Member for South Norfolk again. I am more than happy to support and endorse this Bill.
Question put and agreed to.
Bill accordingly read the Third time and passed.