Housing Supply (London)

David Burrowes Excerpts

Wednesday 15th July 2015 Westminster Hall

[Dr Rupa Huq (Ealing Central and Acton) (Lab)]

I beg to move,

That this House has considered housing supply in London.

In the 1937 novel “Coming Up for Air” by George Orwell, the narrator tells us that his neighbours all think they have bought their own homes, and remarks,

“they don’t, the building society does”.

Although it was an inter-war satire of social mores in the suburbs, many Londoners now in precarious employment and accommodation would welcome the possibility of being beholden to the building society—they may even kill to have a mortgage. As was written in the paper the other day:

“Increasingly…owning your house is the preserve of the rich. Home ownership levels in England are plummeting just as new homes are shrinking”.

That was not in the Morning Star or the Socialist Worker; it was in The Sunday Times property section. This debate is supposed to be on the housing supply in London, but it would be no exaggeration to say that it is on the housing crisis in London, as that is what we now face.

I will base my observations on having been the MP for Ealing Central and Acton since May and having lived in Ealing since 1972. The seat is mixed in terms of tenure and nature, and spans urban and suburban densities. There are multiple issues relating to housing in London: the first-time buyer market and the resulting so-called generation rent; the numbers of young people living in shared houses, or even with their parents, right up to their 30s; the ability of councils to build houses with proceeds from sales; the disastrous new right-to-buy policy; the axing of Labour’s decent homes standards; the changing definition of affordability; and the dwindling number of key workers in the capital.

Housing is a vital issue everywhere, but in London the scale and gravity of the crisis—acknowledged by the commitments to build more houses in all parties’ manifestos—is particularly pronounced. Meanwhile, in popular mythology, everyone in London is living on caviar, quaffing champagne and Pimm’s, and the streets are paved with gold. According to Land Registry figures, London continued to see the highest price rises in the country. In March, prices rose by 11.3% to an average of more than £462,000. The rise was 5.3% nationally, with the average property price a much more modest £178,000. So London is different.

For my constituents, the average property price is now £535,319—17 times their average annual take-home pay of £31,000, according to the National Housing Federation. We also have the dubious distinction of being the constituency with the third highest number of private renters and of having the highest private rents in a marginal constituency, according to Shelter’s pre-election report. Among other things, that report found that 0% of housing in my constituency is affordable for a typical young couple, that it takes 28 years to save for a deposit and that private rents went up by 14.2% in one year. It is no wonder that only 50% of London’s households are owner-occupied, compared with a national average of 64%.

The average age of an unaided first-time buyer in London is now 37, so my first question for the Minister is: what does he predict it will be by the end of his party’s term in office? Will we soon be “Turning Japanese”? In that country, people bequeath mortgages from generation to generation.

[Mr David Burrowes (Enfield, Southgate) (Con)]

I congratulate the hon. Lady on securing what is an important debate for all those across London who are concerned about this No. 1 issue. Will she be speaking about some of Ealing’s significant housing regeneration schemes, which are making people in other parts of London very jealous?

[Dr Huq]

Yes, I will come on to some of the more noteworthy schemes in the constituency—just hang on in there and I will get to that.

I do not want to brand all private landlords as neo-Rachman rogues. According to the post-2015 election Register of Members’ Financial Interests, 142 MPs declared rental income under the category for land and property in the UK and elsewhere, in which annual rental income that exceeds £10,000 must be declared. That is 22% of MPs—just over one in five. There must be some decent ones among them.

It seems illogical that nine out of every 10 pounds spent on housing in this country goes on housing benefit, including for properties that went into private hands under the right to buy and are now rented back to councils as emergency accommodation to combat homelessness, which we have seen manifested in mushrooming night shelters, soup kitchens and food banks across the capital. Although red tape is often condemned and flexibility championed, I am proud—despite Labour losing the election—to have stood on a platform of reining in the violent price rises that lead to instability for tenants. We also need minimum standards, not only for tenants but for the letting agencies that can charge sky-high fees, in the hundreds of pounds—I have never understood what for; a couple of references, if that.

Renting is no longer just a transitory stage for people in their 20s; it is the new normal, and it is becoming routine for people further up the age scale, including many professionals in my constituency. A new staffer started with me the other day. He is in his 20s and on good money, but he is sharing 12 to a house, with a shared sitting room and kitchen. At that stage of life, “Who Stole My Cheese?” should not be a way of life, and there are older people than him in the same situation.

I am now in my 40s and first bought, pre-boom, in the 90s, but it seems that people a bit younger than me or who were not as quick to buy have missed the boat. That includes people with kids. I see them every day on the school run, and they are quivering at the prospect of the landlord selling off the property any minute, meaning that they will have to move on and find new schooling for their kids. For the people who did not buy, it seems that the generations before have benefited from rising equity and pulled the ladder up behind them.

In his new book, “Injustice”, Professor Danny Dorling says that in 2015, the combined value of houses and flats in the London boroughs of Kensington and Chelsea, and Westminster is worth more than the entire annual product of Denmark, the world’s 35th largest economy. That is a stark reminder of how London is different, and that applies to the suburbs too. The road where I grew up was not built for rich people. Opposite us lived Mr and Mrs Cotter—this was the ’70s: we did not know people’s first names—a postman and a dinner lady with two kids. Yesterday, I googled our old postcode, W5 1JH. No properties were for sale there, but all the homes on the neighbouring Greystoke estate, which are largely semis, were worth slightly plus or minus £1 million. There is no way that a postie and a dinner lady could afford to live in that road now—indeed, no public sector worker could afford any house in any part of my constituency on the open market.

The other day, I met our local chief superintendent, who told me that 60% of Met officers now live outside the M25, far removed from the communities they serve. Every school I visit locally tells me that it can get young teachers in to train, but as soon as they want to settle and put down roots, they are lost to Slough or beyond, because housing in west London is too prohibitively costly for them to stay.

The current Mayor of London, the hon. Member for Uxbridge and South Ruislip (Boris Johnson), is notable by his absence—where is he when you need him? I have had my brushes with him, it must be said, but it was he who claimed that not only property prices but benefit changes in this city were causing “Kosovo-style social cleansing”. Those are not my words; they are his. What steps is the Minister taking to reverse the trend of a growing proportion of London’s key workforce, be they in public services or other employment, being left behind and pushed out?

In an attempt to bring down the housing benefit bill, last week’s Budget effected a raid on housing associations and registered social landlords, whose properties look set to be sold off and whose revenues will be raided, stopping them from building more houses. The little social housing that we have will dwindle, and the policy is being funded by the sale of the so-called most expensive social housing properties in those boroughs. Were that to happen, it would lead to the total decimation of all housing stock in most of zone 1.

--- Later in debate ---

[Mr Lammy]

I am grateful to my hon. Friend for raising that point. We need homes, but not at the expense of business and industry in this city. Of course, these are developments of homes with no infrastructure or support. Office space and facilities are dwindling in the city of London. Again, the hon. Member for Wimbledon had nothing to say about that.

There are some things that need to happen. We need a redefinition of affordability. We should make the plans that developers put forward for public land transparent and open. All of the accounts of viability on public land should be available to the public, so that they can interrogate whether the proportion of affordable homes is in fact fair.

We also need a degree of rent stabilisation. The vast majority of people moving into homes in London this year are not buying their own homes, but are in the private rented sector. Rents are soaring—in the past two years they have gone up by 20% in the London borough of Haringey and 40% in the London borough of Richmond. Given those soaring rents, does the Mayor have anything to say about the private rented sector? No. He has nothing to say at all. He has nothing to say about the licensing of landlords. A mother came to see me two weeks ago. She was fleeing domestic violence, and was sleeping in a friend’s hallway with her three children. That is what is happening in London’s private rented sector.

Where is the plan for the licensing of landlords and what do the Government have to say about overheated rents? If Angela Merkel can run on rent stabilisation in her country and Mike Bloomberg can run on rent control in New York, why is this brand of conservatism so extreme and so set against that?

[Mr Burrowes]

I will give the right hon. Gentleman one example. What about the London Housing Bank using loans of up to £200 million to ensure that there is affordable rental accommodation? That is an example of a one nation Conservative Mayor tackling the issue of affordable rents.

[Mr Lammy]

I am afraid we have come back to the original debate about what is in fact affordable. Too many people are not seeing that affordability.

I suggest that we create a new vehicle—a Homes for London agency. The Government are set against any borrowing, but it is important to understand that a large part of the problem in London has been caused by the entire withdrawal of public grant to build homes in the city, amounting to £4 billion lost from this Government. That has to be replaced somehow. A new agency in London with a triple A rating could go to the bond markets and raise money against gilts, as Transport for London does. That would get us to a £10 billion fund—we will need a fund of that size if we are to make a difference. It is not about Government borrowing but a vehicle in London that can do something.

We need some kind of bond system to raise significant money for building social and council homes. We need to redefine affordability. We need rent stabilisation—every major city in the world understands that overheated rents lead to chaos and overcrowding; in some cities, such as Paris, they have led to riots. It is also important to hear what is being said in communities about estate regeneration.

--- Later in debate ---

[Mr David Burrowes (Enfield, Southgate) (Con)]

It is a pleasure to serve under your chairmanship, Mr Chope. I welcome the debate secured by the hon. Member for Ealing Central and Acton (Dr Huq).

All Members present, representing areas of London both north and south, agree that housing is the No. 1 issue and one we need to debate more. I do not want to take up too much time, because I do not want to interfere with what has been, in many ways, a Labour London mayoral hustings. Although Labour nationally and in London should be doing a lot of soul searching, there also needs to be some honesty. There has been none yet in the leadership hustings, so perhaps there will be some in the Labour mayoral hustings.

We have heard the usual pejoratives about the rich coming over here and taking up all the London property, as well as the usual mantras about rent caps and controlling the market. We have also heard—with a shudder, certainly in my constituency—an attack on the green belt. People will be rushing to their local plans to make sure that there is proper protection for their local area. We must make sure that those decisions are made locally.

Let us have an honest debate. Let us recognise that there has been a 30-year failure by Governments to provide sufficient housing in London, and that there is blame on all sides. Let us also recognise that the Mayor and the Government have made great strides. Despite coming through a great recession, we are now able to seek to realise our ambition of doubling house building. We do not need a mayoral briefing, or any other briefing; we can look at the National House Building Council statistics: in 2014 there was a 10% increase in new housing registrations, at 28,733, up from what had been a record figure in 2013 of 26,230. We can all look around our constituencies and say that a lot more is needed, but there has been progress, which should be welcomed.

Also to be welcomed is the ambition to build 22,000 new homes. We have not seen anything like that since the 1930s. I am proud to be a Conservative and a Member of a one nation party and Government. We have a great history of leading revolution in house building. Together with the Conservative Mayor, we are starting to get there.

This debate is about affordable housing in all its forms, but it is also about rents. We have not yet mentioned the Mayor’s strategy, which is about ensuring that we build purpose-built rental property to have an affordable rental market. I referred to the housing bank, which provides £200 million of loans. Affordable rental properties are an important element of the market.

We also need to recognise that many of our constituents cannot get on to the housing ladder because they cannot afford it. Young professionals cannot get on to the ladder. We need to build affordable housing.

[Helen Hayes (Dulwich and West Norwood) (Lab)]

Does the hon. Gentleman agree that the definition of “affordable” housing is a material consideration that makes a difference to the meaning of the word?

[Mr Burrowes]

It does. I will talk about Enfield shortly, where some of the affordable housing that is being built is genuinely affordable. Meridian Water, which is alongside the constituency of the right hon. Member for Tottenham (Mr Lammy), will provide 5,000 new homes and is a huge opportunity to provide genuinely affordable housing as part of a mix. There needs to be a mix. We also need to focus on shared ownership to help people to get on to the ladder. We need to do more to encourage the First Steps programme, which my hon. Friend the Member for Wimbledon (Stephen Hammond) mentioned; as he said, that should double in scale. Shared ownership is important and should be a priority. We should call on housing associations to encourage shared ownership of their housing stock, rather than seeing it as an add-on or a subsidy for the rental market.

I did not hear the hon. Member for Ealing Central and Acton say anything positive about regeneration, even though there has been significant regeneration in her constituency. This week, a £55 million regeneration project was announced. On my patch in Enfield, Meridian Water is a huge opportunity to build 5,000 homes and create thousands of jobs; crucially it is linked to the transport infrastructure changes that are needed to transform the Lee Valley area. That is important.

The 20 housing zones are producing life-changing opportunities. We need more, and across London we should welcome them. London leaders do welcome them, but the Opposition seem not to.

[Dr Huq]

When new housing starts at £1.2 million, how does the hon. Gentleman square that with the fact that there are 13,000 people on the council waiting list in Ealing borough; there are only 700-plus properties whose leases turn over each year; and there are 250,000 people on the waiting lists in London? The stuff being built is not appropriate to those people.

[Mr Burrowes]

I agree, and the challenges in Enfield are similar to those in Ealing. I will not put my head in the sand and say all is rosy out there; I want to challenge the Government on some aspects. The plan for the redevelopment of the Ladderswood Way estate, which was put together by a Conservative administration and is now being carried forward under the Labour-run council in conjunction with the Mayor and the Government, will create 500 homes by 2018. Crucially, it needs transportation links, but opportunities are literally coming down the tracks—Crossrail 2 will be important for the New Southgate area. Opportunities are being harnessed, not least by the London land commission, to draw together everybody who is interested in public land and get them to work together in more co-ordinated way, which has not happened previously. All those things are important.

The London land commission was launched on Monday, so these are significant times. We need additional investment, and I look forward to continued support being announced in the autumn statement. City Hall, central Government and London boroughs are coming together to lock in surplus public land for housing, but we need cross-party support. Sir Steve Bullock, the Mayor of Lewisham said,

“It is vital that our overall strategy to tackle the housing crisis delivers an increase in affordable homes for ordinary Londoners.”

That is important, and we should all welcome it.

The hon. Member for Ealing Central and Acton asked about garden cities. In London, it is about garden suburbs. In Barkingside, the local development plan includes building 11,000 homes and five schools and providing 65,000 square metres for employers and community space. That is to be welcomed.

Right to buy will be coming through in the housing Bill. I support the principle of right to buy—people should have the opportunity to own their house—but the reality is that the majority of high-value council houses are in London, so the eyes of the rest of the country will be on whether the right-to-buy scheme is being subsidised through London housing. We need to the challenge the Minister on this. My constituents would not want the receipts from properties rightly bought by tenants of housing associations to go north of the M25.

[Keir Starmer (Holborn and St Pancras) (Lab)]

May I inject a bit of reality on that point? In my constituency, there are 4,800 children living in overcrowded conditions on the housing register. I have had half a dozen advice surgeries since I was elected and half the people who have come to see me are concerned about serious overcrowding. The proposed right-to-buy extension will affect them disproportionately. Some 37% of housing in Camden will fall within the higher value bracket and thus will be sold off at the very time that people in Camden absolutely need it. It is going to make the housing crisis worse, not better.

[Mr Burrowes]

I understand the hon. and learned Gentleman’s concerns. It will work if we increase the number of homes, and the way to do that is to ensure, in the spirit of localism and devolution, that London gets the receipts of the sales. If, as I suggest, we build two houses for every one sold, we would deal with the concerns about overcrowding and waiting lists in the hon. and learned Gentleman’s constituency and mine.

There is another issue on which London councils need to work better. Particularly in Ealing and Enfield, people are coming up from inner-city boroughs and are being placed temporarily in cheap accommodation. There are not only the costs of the accommodation, but social care costs. Children in care have an associated budget, but children in need have lots of associated costs. London councils need to work much better strategically to ensure that Enfield is not picking up the bill for residents of other boroughs. We need to work much better on that to ensure that Enfield, which does not have a properly fair funding formula and settlement, does not have to deal with that impact.

There are lots of other mayoral candidates and others who want to speak, so I will not go on for much longer. I will conclude by saying that we are a one nation party with a great history, not least on building housing.

[Tulip Siddiq (Hampstead and Kilburn) (Lab)]

Will the hon. Gentleman give way?

[Mr Burrowes]

I will not. There are too many candidates who want to speak.

The litmus test of a one nation party and Government is how we deal with the housing crisis. In London, we need to ensure that we continue to build more housing than ever before for the benefit of all Londoners.