Housing in Newcastle

Chi Onwurah Excerpts

Tuesday 10th May 2016 Westminster Hall

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

I beg to move,

That this House has considered housing in Newcastle.

It is a great pleasure to serve under your chairmanship, Mr Hollobone. I am pleased to have secured this short debate on a subject that is so critical to my constituents.

I am sure that everyone present is an avid reader of my website, chionwurahmp.com, and so will know that I publish pie charts that summarise the issues that constituents come to me with. At the moment, March’s pie charts are up, showing that I dealt with 36 housing issues that month—just behind the 37 benefits issues. Since I was first elected six years ago, housing has consistently been in the top three issues in Newcastle upon Tyne Central, and often No. 1, which is why I have secured several debates on housing and related issues, including on empty properties in 2012 and on local authority funding settlements and holdbacks in 2013.

Earlier this year, I held a ward summit in Blakelaw in my constituency that was attended by local councillors, residents groups and other organisations. The minutes are on my website, and show that, again, housing was the No. 1 issue. Late last year, I held another ward summit, in Benwell and Scotswood, where housing was also the No. 1 issue. Just last week, I held an informal surgery with the Sisters Study Circle group at the Tawheed mosque in Elswick, and housing was of great concern to them.

Why, I was asked, is it now next to impossible to get a council house in Newcastle? I tried to explain that there are 6,000 households on the waiting list, of which 4,000 are actively bidding for properties, but only 185 properties become available each month. I also explained that much of the council housing stock has been sold off and that, really, it was now available only to those with the greatest need. “Why did the Government not build more houses?”, they asked me. “Did they not realise the impact bad housing has on health, crime and education? How can young people focus on studying or getting a job if they haven’t got a decent roof over their head? How can parents give children the support they need if they are worrying where they are going to be living next week?”

After some time, I grew tired of trying to explain the Government’s logic while at the same time thinking, “I myself don’t understand.” My job is not to justify the Government but to hold them to account. I am sure the Minister agrees that my constituents are right to be concerned about the lack of housing in Newcastle. I applied for this debate to find out from him exactly how he believes Newcastle City Council can overcome the barriers preventing it from building more houses to improve the lives of the thousands of people in my constituency who need a decent home.

Last year, the Government presided over the building of just 9,590 homes for social rent, compared with the 33,180 delivered in Labour’s last year in office. Last year’s was the lowest level of affordable homes built for more than two decades. Having knocked on a great many doors over the last few weeks—indeed, over the last few years—I know that they bear testament to the last Labour Government’s investment in our housing stock. Labour could, and should, have built even more homes, but the decent homes programme—visible in new doors, windows, kitchens, bathrooms and the very fabric of so many homes in Newcastle—effectively renewed the existing stock so that it could last for another generation.

That programme contrasts with this Government’s record of cutting investment and of building just one new social home for every eight sold off through right to buy—a Government whose use of the term “affordable rent” is not recognisable to most people; who thought up the unfair bedroom tax, which has affected half a million households; and who have overseen a 22% rise in private rents in Newcastle since 2011, when incomes have barely risen at all.

Newcastle is a growing city. It is estimated that by 2021 there will be 16,200 more people living in our great city, and the Government have a duty to ensure that local authorities have the means—both the funding and the powers—to provide the homes that local people need. Newcastle needs 16,400 new homes between now and March 2030: around 1,000 new homes per year, not including student accommodation for those studying at our world-class universities. Residents quite rightly do not want to lose any of our fantastic greenfield assets in and around Newcastle, so much of the land available for building these homes for Newcastle is brownfield, with high clean-up costs.

Providing the homes required in such circumstances is already a huge challenge for the council, given the ideologically and politically driven extent of the cuts to central Government funding, yet the Government seem insistent on piling on further pressure and putting further barriers in the way. The 1% cut in social housing rent over the next four years will leave a hole of £593 million in the council’s 30-year financial model—that is £0.6 billion. That investment was earmarked for building the homes that the city needs and for investing in the city’s stock. Although a 1% cut in social rent may seem a good thing for social tenants, it is the council that pays for it, not the Government. It will take money away from the capital investment needed for repairs, improvements and, critically, new homes.

If the Government were so concerned about saving social tenants’ money, they would abolish the grotesque bedroom tax. By the way, the Government are actually the greatest beneficiary of this rent cut, because the housing payment bill for the Department for Work and Pensions will fall considerably. It is the Government who will benefit from this cut, not social tenants.

It is not hard to see that when housing authorities’ incomes are cut, they will have less to invest—more than half a billion less, in the case of Newcastle City Council. Trampling over locally elected and accountable councils’ planned infrastructure investment in such a way deserves its own debate. But there is more: that hole in the city’s investment plan will be widened even further by the Government’s forced sale of higher-value housing to pay for the new right to buy. Building a new home in Newcastle costs a minimum of £120,000, but the result of the much criticised Housing and Planning Bill will be the selling off of homes at an average price of £80,000—so, £80,000 in income versus £120,000 to build them. Even if all the income were reinvested, at best we would replace only two thirds of all homes sold.

I hope the Minister is aware of the analysis published by Shelter last month, which showed that Newcastle will need to sell more than 400 homes every year to raise the £52 million annual contribution to the Government’s policy. That £52 million contribution must be paid for by selling off homes. That is 100 more homes than are built each year now, before the Government’s housing Bill bites, with its inevitable knock-on effect on investment.

My constituents who are on the lowest incomes already find it much more difficult to buy homes, even at the lower end of the market, than they would in other parts of the country. The council has done some brilliant work in recent years: delivering much needed specialist house building; building more affordable homes; returning vacant private sector properties to the market, which is very important; and working to reduce homelessness. But it is under attack from a Government who seem determined to dismantle our social housing stock from Whitehall. I simply cannot see how the council is supposed to meet the needs of local people, given the straitjacket that the Minister is putting them into. Those I have spoken to in Newcastle believe, as I do, that Government locally and nationally have a duty to provide homes for people. I want to see a healthy mix of tenures. [Interruption.] Perhaps the Minister is looking on his mobile phone to see how that can be achieved.

The actions of the Government and the housing Bill will throw up more barriers to building homes that, frankly, seem designed to destroy social housing altogether. Will the Minister tell us what role he sees for councils in building and providing homes, and how much discretion they should have in fulfilling that role? What modelling have his Government done on the effect of the 1% cut in social rents on investment in Newcastle and across the country, and will he publish that modelling? Does he not agree that decisions on rent should be with the local authority, and that if central Government want to cut rent—a laudable aim—they should provide the money to pay for it, rather than punish future generations? What modelling has he done on the forced sale of council homes to fund his right to buy policy? Does he agree with the analysis that Shelter has done on this and, if not, will he publish his own sums?

On the subject of the right to buy policy for housing associations, I wrote to the Minister last year about constituents of mine who are unable to sell their properties because the freehold is owned by the St Mary Magdalene & Holy Jesus Trust, which refuses to extend the leases. In his response, he said that my constituents should write to the advisory body LEASE, which they did, to no avail. There are three different housing Acts that affect three different types of properties and the rights they enjoy. The Minister said he would consider this further as part of the Housing and Planning Bill. Has he any hope, or indeed any clarity, to offer my constituents on that issue?

What would the Minister say to my constituents who cannot get a council home and cannot afford the rising rents in Newcastle? Does he think that his housing Bill will enable Newcastle City Council to build enough homes in the next 30 years and can he explain how? If it will not, how does he expect the private sector to fill the gap at affordable prices for different types of tenure? Finally, will he take a leaf out of the book of the new Labour Mayor of London, Sadiq Khan, and commit to ensuring affordable housing in Newcastle?

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

It is a pleasure to serve under your chairmanship today, Mr Hollobone. I congratulate the hon. Member for Newcastle upon Tyne Central (Chi Onwurah) on securing the debate.

I do not recognise the Shelter figures. I have said openly that they are out-of-date figures based on a false premise, so the Government have secured data from local authorities to make sure we are working on up-to-date figures. Some 16 million pieces of data form that information. The hon. Lady might want to look back at the Housing and Planning Bill and what is actually in it. There have been discussions over the past couple of weeks, including in the House yesterday and in the Lords, and she will see that quite a lot of things will be coming through in statutory instruments during the summer. However, we have garnered 16 million pieces of data to make sure we have the correct information.

[Chi Onwurah]

Are the 16 million pieces of data that will form the basis of housing policy publicly available?

[Brandon Lewis]

While we are doing policy formation, they are not, but they will be in the public domain in future.

The hon. Lady mentioned the issues that Newcastle has in building houses; I think Newcastle should build houses. I visited recently and saw some of the excellent work being done up there with housing associations and private developers in Newcastle, but local authorities have a part to play in building different tenures of housing that are appropriate for their local areas. I would encourage them to make use of the £3.4 billion worth of funding that is available within local authorities for that specific purpose, before we even touch on the almost £23 billion worth of reserves that local authorities have got, which they could choose to use. Indeed, Newcastle has got £161 million before we even get on to the housing revenue account borrowing, which is £3.4 billion that they can use.

[Chi Onwurah]

I want to press the Minister on the figures that he is using. Is he saying that the £161 million of reserves is available to be spent as Newcastle wishes?

[Brandon Lewis]

The hon. Lady will have to ask Newcastle City Council. It is its money and its reserves. She might want to have a chat with the leader in Newcastle about how he chooses to use his reserves. Also, before we even reach the housing revenue account, local government has £3.4 billion that it can use. Indeed, we created more headroom 18 months or two years ago for local authorities, but there is more than that as well. We want to ensure there is good quality affordable housing for everybody. We are determined to increase home ownership: 86% of our population want to own their own home. We are also making sure that we deliver an increase in the housing supply.

The hon. Lady will hopefully take note of the fact that there was a 25% increase in housing supply last year alone, coming from the lowest level of house building that this country has seen since the 1920s, a situation we inherited from the now shadow Housing Minister, the right hon. Member for Wentworth and Dearne (John Healey), who oversaw just 88,000 homes being built. We are now up to 181,000 new properties created last year. In Labour’s time in government, for every 170 homes sold under right to buy, only one got built. Under the reinvigorated scheme that this Government have introduced, it is one for one, and under the extended scheme that we are now rolling out to the housing associations, it will also be one for one. Thanks to my hon. Friend the Member for Richmond Park (Zac Goldsmith), in London it will be two for one.

In Newcastle, a third of all homes built since 2010 have been affordable, reflecting more than £22 million worth of Government investment. I am pleased to see the progress —I have seen some of it for myself—in public and private partnerships, which have built some 1,800 homes. That is just one part of the progress we have made since 2010. By 2010—this is an important fact—the stock of affordable homes had fallen by 420,000. We had quite a big housing deficit to deal with, which we inherited from Labour, with 1.8 million families on the social housing waiting list. Five years later we were the first Government since the 1980s to finish their term with more affordable homes than when they started. We delivered 193,000 affordable homes in England between 2011 and 2015, exceeding our target by 23,000, and on our watch councils built more homes in five years than in the previous 13.

We are now investing a further £8 billion to deliver 400,000 affordable housing starts, including 100,000 homes for affordable rent. That is the largest affordable house building programme by any Government since the 1970s. As I have said, we respect the fact that 86% of the population want to own their own home; that is why our affordable housing programme will also support home ownership, and will include a commitment to build 200,000 starter homes. Younger first-time buyers will be able to buy their first home with a 20% discount. That means that in Newcastle upon Tyne the average starter home would cost no more than £120,000. When that is linked to a 5% deposit, we are starting to see affordability—of a kind that has not been present for the best part of a decade—coming back. We are still seeking expressions of interest from local authorities who want to use the £1.2 billion of funding that the Prime Minister announced in January to deliver starter homes.

Others in the hon. Lady’s constituency might be interested in shared ownership, with a deposit as low as £1,500—part of £4.1 billion of funding that we have opened up as a route into home ownership, delivering homes for 135,000 people. Our prospectus inviting bids for that funding outside London was published just a few weeks ago, and I encourage all local authorities to look at the bidding for that. Some 600 households in Newcastle have benefited from Help to Buy, and we have extended the scheme so more can follow. We are clear that social tenants should also have the opportunity to achieve their ambition and realise their aspiration of home ownership. That is why we have said we will extend the right to buy to those 1.3 million tenants, so that they have the same opportunities. Housing associations have also committed themselves to providing an additional home for every property sold. That is in addition to the reinvigorated right to buy scheme. The maximum discount was increased in 2012 and, as I have said, for the first time ever a requirement was introduced to build a new affordable home for every additional sale, nationally.

I am pleased to say that 574 homes have been sold through right to buy in Newcastle since 2010, but I want to be clear that we are not just supporting potential home owners. We are reducing the cost of social renting, as the hon. Lady outlined. The cost of social rent has roughly doubled in the past five years; it has been moving up faster than private rents. The 1% reduction will benefit tenants and if it benefits the wider public by reducing the deficit that we were left by Labour, that is a good thing as well. Almost £400 million will deliver 8,000 new specialist affordable homes for the most vulnerable in society as well.

In the private rented sector, which the hon. Lady touched on, we will continue to boost supply, which is the best way of driving up quality, choice and affordability for tenants. That includes our £1 billion Build to Rent fund, and the £3.5 billion guarantee scheme to finance those thousands of extra homes built specifically for private rent. Tenants in the private rented sector will also be better protected thanks to changes we are implementing through the Housing and Planning Bill to target rogue landlords, including banning orders for the most prolific and serious offenders, civil penalties of up to £30,000 for certain breaches, and a fit and proper person test for landlords letting out licensed properties. That is the biggest package ever seen in the sector.

The Government were elected to give everyone the best chance of living a fulfilling and good life. That will be achieved only by improving the housing market in every part of the country. Newcastle is no exception, as I am sure the hon. Lady will agree. That is why the Housing and Planning Bill is so important. It will drive up housing supply, and I hope that later today the House of Lords will recognise that the Government have an electoral mandate to deliver starter homes and the extension of the right to buy; I hope that they will stop blocking the will of the elected House, and that the Labour party will stop blocking the will of the public, expressed through the electoral mandate, and the protocols and will of the House of Commons, which show some of the biggest majorities of this Parliament. That is our mandate and we are determined to repay the trust of the British people who elected us on that manifesto, by building more homes that people can afford, making it easier for communities to build the homes they need and, above all, supporting the aspirations of people who work hard and want to buy a home of their own.

Question put and agreed to.