Housing and Planning Bill (First sitting)

Brandon Lewis Excerpts

Tuesday 10th November 2015 Public Bill Committees

[Mr Richard Bacon (South Norfolk) (Con)]

I am organising a seminar on 20 November called “How should Norfolk grow?” It has eight commercial sponsors: Barclays bank, the New Anglia local enterprise partnership, the local train franchise, Anglian Water, Saffron Housing, Norwich International airport, Swallowtail Print and the Maids Head hotel.

[The Minister for Housing and Planning (Brandon Lewis)]

May I draw attention to my entry in the Register of Members’ Financial Interests?

[Mr Stewart Jackson (Peterborough) (Con)]

May I also draw the Committee’s attention to my entry in the Register of Members’ Financial Interests?

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[Mr Jackson]

Q 17 Obviously there is a predisposition in the Bill towards support for residential accommodation and housing in London and across the country. What impact do you think that might have, specifically in London, on commercial and business premises?

Richard Blakeway: I think that some of the issues in relation to the conversion of office to residential are actually outside the Bill. None the less, we very much welcome the Government’s agreement that there will be an exemption until May 2019 for some of the existing areas that we have sought exemptions for, such as the CAZ—the central activities zone—the Royal Docks enterprise zone, Tech City, and the northern part of the Isle of Dogs. We really welcome the Government’s move on that. Clearly, the article 4 measure allows those areas to formulate an application to extend the exemption beyond 2019 and there is obviously a window to do that.

[Brandon Lewis]

Q 18 May I take you back to the conversation a few minutes ago about starter homes? Are you able to give us an idea, even if it is a ballpark figure, of the average price paid by a first-time buyer for a home in London?

Richard Blakeway: A ballpark price would be about £290,000. I think that is based on CML data.

[Brandon Lewis]

Q 19 So that is somewhere below the cap for starter homes?

Richard Blakeway: Correct.

[Brandon Lewis]

Q 20 So at what sort of level would you like or do you expect starter homes to be provided for in London?

Richard Blakeway: A similar level. That is why I do not see the cap as an issue. It is striking, for example, that the purchase price with shared ownership is broadly the same price as first-time buyers pay on the open market; again, it is about £290,000. It is logical, therefore, to expect starter homes to be in a similar price bracket.

[Brandon Lewis]

Q 21 From the work you have done looking at this and the opportunities for London in the starter homes brand, do you see that as an opportunity to get an overall increase in the housing supply in London—to push that supply up?

Richard Blakeway: Yes. We see a real role for starter homes within the capital. As I have set out and as you know from our conversations, we expect that to happen alongside other products, such as shared ownership, which can play a different but similar role to promote low cost of ownership in London. We think there is a real opportunity to increase not just the volume, but the proportion of low cost of ownership opportunities in London with a suite of products, including starter homes and shared ownership. What we would like to see is a role for the Mayor of London to co-ordinate that being reflected in the Bill—a change to the Bill to enable that.

[Dr Blackman-Woods]

Q 22 How can you be so confident? Have you carried out work on this to know that other affordable housing products will also be delivered alongside starter homes?

Richard Blakeway: I think I have expressed some caution to the extent of saying that some of the issues in relation to starter homes will be set out in the regulations, and that to undertake a full assessment we need to see the regulations. One critical thing is what percentage of starter homes are required on each site—that is a critical issue that will be set out in the regulations. What we have said very clearly, however, is that the quota of starter homes will be applied, but then we would expect that the London plan policy, which seeks to maximise affordable housing, will also be applied afterwards. So the two tests are still applied to schemes.

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[Brandon Lewis]

Q 23 Just to finish off my query on starter homes, bearing in mind your comments a few minutes ago about planning permission in principle on brownfield land and the London Land Commission—I should declare that I am joint chair—do you see a role for the work that the London Land Commission is doing in identifying land, working with that brownfield register and planning in principle in being able to deliver homes such as starter homes?

Richard Blakeway: Yes, and that is why I think some of the changes that we are suggesting to strengthen the strategic role that already exists for the Mayor of London are important so that we can co-ordinate each of those elements. As you say, each of them are connected and interrelated. So the changes to allow us to strengthen the land commission and have that duty of co-operation, the changes so that we can issue development orders in relation to planning in principle—PIPs—and the changes to allow us to co-ordinate and ensure that boroughs are in conformity with the brownfield register are all really important, and it is important that the GLA and the Mayor play a strong role.

[Brandon Lewis]

Q 24 Okay, I have two other areas that I want to touch on. I know my colleague wants to jump in as well. The current Mayor and your office have had some fairly ambitious targets around housing provision for London and have achieved some really good numbers. I know you have big ambitions going forward—on Second Reading we heard my hon. Friend the Member for Kingston and Surbiton (James Berry) outline some of his ambitions, which involved having more extra homes built in London for every home sold, which is the point you were making. With the brownfield registers, planning permission in principle, the compulsory purchase order changes, the section 106 changes and so on that are outlined in the Housing Bill, and the work that the London Land Commission is doing, what do you think that means for affordable housing provision in London and for the work of your office?

Richard Blakeway: I think it strengthens our ability to drive house building within the capital, and it helps us to achieve our target of seeing 49,000 homes completed each year—a level that has not been seen since the 1930s. Clearly, it gives a stronger role to the Mayor to build upon his existing strategic planning powers. It also enables new roles in relation to co-ordinating affordable products in the capital, particularly around low cost of ownership, and enabling surplus land to come forward and identifying brownfield opportunities. So I think the combination of those measures will help us to achieve our goal to double house building.

[The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Marcus Jones)]

Q 25 Good morning, Mr Blakeway. Much of the Bill is rightly predicated on supply, but using the existing stock we have to support people into housing is also extremely important. How do you think the Bill will support landlords in recovering properties that have been abandoned?

Richard Blakeway: It is clearly useful that the Bill seeks to enable landlords to do that. We need to undertake a full analysis of how it would work in the capital, but we think it is a useful measure that has been introduced.

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[The Chair]

We are drifting slightly wide of the Bill itself.

[Brandon Lewis]

Q 45 Councillor Glanville, to take you back to your earlier remarks, can you clarify something for me? I think you said that you have recently been able to negotiate down to—did you say 10% of affordable housing? You linked that to starter homes. Can you clarify exactly what you were saying?

Phil Glanville: I think that close to 10% of the Mount Pleasant sites on the border between Islington and Camden—the Royal Mail redevelopment—are affordable.

[Brandon Lewis]

Q 46 How does that link to starter homes, which have not actually come in yet? I am struggling with why you were linking a scheme that you are negotiating at around 10% with a policy that has not actually come into force yet.

Phil Glanville: Well, the developers work to the viability principles that are set out by the GLA.

[Brandon Lewis]

Q 47 I am trying to understand how that links to starter homes, which are not yet in force.

Phil Glanville: I think the starter homes will be seen as the first port of call when it comes to the delivery of affordable housing.

[Brandon Lewis]

Q 48 Right. Just to clarify, the local authority’s negotiation to 10% has nothing to do with the starter homes policy, because that policy is not in place yet.

Phil Glanville: No, but I fear for the future.

[Brandon Lewis]

Q 49 You also said that you want to build on a lot of the land that you, as a local authority, own. How much land have you got and not built on yet?

Phil Glanville: I do not have that figure in front of me, Minister.

[Brandon Lewis]

Q 50 Why have you not started building programmes on that land already?

Phil Glanville: We are building 3,000 homes on 18 sites, which is the largest development programme in inner London, and we are looking at a further 15 sites that we hope to develop on-site before 2018. We are making good use of our right-to-buy receipts, which we do not have to return to Government. We are doing all we can to develop new homes on our land within the housing revenue account cap. Once we have been through those sites and built that capacity, we will look at innovating, whether with almshouses, co-ops or housing associations. We are very ambitious about building new homes on our land. As I say, we have one of the largest development programmes in the capital.

[Brandon Lewis]

Q 51 I have been to see things such as City Mills, which is a really good example of great regeneration work that is bringing back more density. You talked about the HRA cap. How big a cap do you need? What extra capacity do you need in your HRA?

Phil Glanville: We have £168 million, and we have had some recent extensions, which obviously I welcome, from DCLG. It is about having flexibility. Nobody wants to go out and borrow £200 million, £300 million or £400 million, but the way the deals are structured means that to get the best value for the council, you often front-load the development costs to get the best value out of the development. That means that you need more flexibility around the cap, so you can have negotiated periods in which you can exceed the cap for two or three years and then come back down below it. All these schemes would need prudential borrowing requirements and proper financial management—they would not be signed off by the relevant council officers if they did not. A process, even where we had to go to the Secretary of State for that kind of permission, would be useful. I do not think anyone wants to run up the national debt, but the point is to have the flexibility to ensure that the development we need gets off the ground.

[Brandon Lewis]

Q 52 Are you using your un-ring-fenced reserves for this kind of work or just relying on the HRA?

Phil Glanville: We are looking at using the general fund to fund some of the private homes in those developments.

[Brandon Lewis]

Q 53 So with your current programmes, you have had an increase in building of over 60% since 2010, which is really good. We want to see more homes, and it is particularly good to see that kind of increase in supply. I assume from your earlier comment, that you also support housing supply and home ownership. Bearing in mind we are rebuilding—the reality is that we dropped below 200,000 first-time buyers in 2009; the figure is back to double what it was then, but we want to see that go further, so that more people have the chance to own their own home—surely starter homes have an important part to play in that. I emphasise, as I think Rick Blakeway did earlier, that there is a difference between the price and cap. I appreciate we all want to see houses below that price, but surely creating affordable homes for first-time buyers is quite an important part of the mix.

Phil Glanville: They could be part of the mix. The challenge of meeting the aspiration for home ownership is whether starter homes are truly affordable in boroughs such as Hackney and inner London where incomes are around £40,000 and below. That can work in shared ownership at the moment within the borough. We are building 500 shared ownership ourselves, because we want to meet that aspiration for low-cost home ownership.

The challenge is where the affordability is. The reality is also that, whether shared ownership or other forms of low-cost ownership like Pocket, they are there in perpetuity, whereas with the starter home discount only the initial purchaser benefits from it and is locked in for five years. That is also a challenge when we go back to the planning process and communities and social mix.

One of the things the planning process is there to do is to ensure that we have a mixed community and development—to have people like “them”, I suppose, in context. When people protest against new development, they often say, “My sons and daughters couldn’t purchase a home there.” The challenge is that, because starter homes come in before other forms of affordable housing, we will not see local people being able to afford to buy them. They will just be on the London market. The need is there, but I think we need to have another look at starter homes.

[Brandon Lewis]

Q 54 So to an extent, you would agree with what Rick Blakeway said—that they are an important part of a mix. Do you want to see a mix?

Phil Glanville: I just want to see a truly affordable mix, yes.

[Brandon Lewis]

Q 55 Councillor Tett, on a completely different topic and just taking the LGA—we have become very London-focused in the last half an hour.

Martin Tett: I hadn’t noticed.

[Brandon Lewis]

Q 56 I appreciate you sit on a county council, having visited you a few times in Buckinghamshire. Looking at part 6 of the Bill on neighbourhood planning, you have a number of areas in your county going through a neighbourhood plan process or which already have the plans. Some 1,600 or so are going through across the country. In terms of giving more flexibility, ease and speed to that process of creating the plans, do you think this could potentially play quite a big part in making sure that communities are more supportive of local development, where they feel they have that control? One of the challenges behind neighbourhood planning is that, like local plans, it is time-consuming. Do you think speeding up the process across local government and more importantly in the communities themselves will be welcomed?

Martin Tett: Are we supportive of neighbourhood planning? Absolutely. There is an enormous advantage in allowing local communities to shape the future of their own area, be they villages or towns; not just in terms of housing, but in terms of the style and architecture and where the facilities are based. We have seen significant engagement across the country where neighbourhood planning has been introduced.

One of the issues that arises is that sometimes neighbourhood planning runs ahead of the other local plan, for example, in district councils in rural areas. We have a number of examples where neighbourhood plans are in place but there is no local plan for the surrounding district, so they lack the overall planning context of how many houses the area will have. They may face the disappointment that, in the future, they have to effectively redo their plan because the housing numbers are significantly higher than were originally anticipated. Certainly in terms of community engagement, they have been successful. From the point of view of Buckinghamshire and from talking with other county leaders, I think neighbourhood plans have gained a lot of traction across the country.

[Brandon Lewis]

Q 57 If we are able to get the neighbourhood plans simpler and a bit quicker to get through for communities, but with links to areas that have a local plan, do you think that that proper, joined-up approach for community engagement and for ultimately delivering the housing we need would be welcomed by the local authorities?

Martin Tett: I am just trying to make sure that I fully understood your question. In terms of speeding up the delivery of local plans, we welcome anything that makes the local planning process simpler. We still believe that democratic accountability in local planning is important. That is what gets the local community buy-in to the ultimate adoption of local plans. Not in every case will the local community be fully supportive of a local plan, but if it is seen to be the local councillors they voted for who can explain to them why something has been done and why it is necessary, by and large you will get more acceptance than, for example, if there were, in extremis, a Government inspector appointed from Bristol who comes in and effectively writes the local plan for a community. We would like to ensure that local communities and local councillors effectively remain in the driving seats in developing local plans for their areas and that neighbourhood planning fits within the context of an overall local plan adopted by a council.

[The Chair]

Minister, can I be rude enough to say that with an eye on the clock, I want to hear from Roberta Blackman-Woods?

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[The Chair]

Finally, very briefly, I call Brandon Lewis.

[Brandon Lewis]

Q 90 Very briefly, returning to the first part of the Bill, Mr Thomas made a comment earlier about linking right to buy and starter homes. Mr Orr, bearing in mind that the voluntary agreement means that for every home sold an extra home will be built, do you think that right to buy will lead to a housing supply increase? Within that, do you think that housing associations will be looking to deliver starter homes as part of the mix of housing that they deliver, and will be able to do this?

David Orr: Yes and yes. There will be an increase in supply, which will liberate some presently trapped assets that can be used for building new homes. Housing associations will build some starter homes, and they will build a lot of shared ownership homes. They will build as much social housing for rent as they can, and they will continue to build for market sale and market rent. We are becoming much more pluralist in the offer that we make to the nation.

Sinéad Butters: But—

[The Chair]

I am sorry, Ms Butters, but we have come to 11.25 am, which is an absolutely sharp cut-off point. I apologise for cutting you off in that way. I thank both our witnesses for their evidence. It has been extremely useful and interesting, and we are most grateful.