Dawn Butler
Main Page: Dawn Butler (Labour - Brent East)
Greg Clark
I have been speaking for more than half an hour, so I will make some progress, but I might give way later.
I pay tribute to the housing associations for having the vision and foresight to see that extending home ownership is completely consistent with their historic mission. The lazy assumption that there is a contradiction between supporting the dreams of homebuyers and ensuring new homes are built must end. I look forward to equally positive engagement with councils—indeed, I have it already—during the passage of the Bill. Their objectives are the same as mine: to ensure that as they release the equity in their high-value properties, they can make sure that more homes are built, adding to the housing supply as well as extending home ownership. At councils’ request, we have included in the Bill a flexible approach that does not require the immediate sale of particular properties, but gives us a chance—if they wish to take it—to agree with councils an approach that meets our mutual objectives.
I want to say a word about London, which has come up already in this debate. Building homes in the capital is a priority not only for my hon. Friend the Mayor but for me. Benjamin Disraeli once described London as a “roost for every bird”. Like many of his observations, it has turned out to be a prophecy—100 years later, the birds are still flocking and the roost is still growing.
Last year, new housing starts in the capital were a quarter higher than when we came to power, and nearly a third of all affordable homes achieved during the last Parliament were in London. As I have said, after we reinvigorated the right to buy for tenants in London, nearly twice as many homes were built as were sold to their tenants—but I want to do more.
The Mayor has set out the most ambitious plan for house building in the capital since the 1930s, but I want to go further so that a quarter of all the homes we build in England are built in London during the years ahead—a quarter of a million new homes over the next five years. I want the right to buy scheme to be a major part of that, and I will talk to anyone in London local government to ensure that that happens, just as it was possible to have a meeting of minds with the housing associations.
Greg Clark
I want to make some progress.
Other measures in the Bill will help. The Mayor has the power to establish development corporations and development orders to speed up the development of new housing across the city. I am absolutely determined to make sure that the Mayor has the ability to deliver the homes that London needs to maintain its position as London’s premier world city.
John Healey
My hon. Friend anticipates one of my main criticisms of the Bill. He also anticipates one of the major criticisms of many people who have taken what Conservative Ministers said at face value, because the more they look the less they will like what they see, and the more they look the less they will see support for them and their aspirations in future.
Dawn Butler (Brent Central) (Lab)
According to the Government’s own figures, with 200 right to buys being sold in Brent and replacement starts at zero, we are already in a deficit of 200 homes. With £450,000 being 20 times the average salary in Brent, does my right hon. Friend agree that we need to start building genuinely affordable homes for less than £450,000 as soon as possible?
John Healey
My hon. Friend is right. In truth the scale and cost of the housing crisis we face in this country requires every part of the housing sector, from private house builders to housing associations to councils, to do a great deal more, and we need more homes of all types, including social rented homes. The fundamental flaw with this Bill and this Government’s plans is that they put all the chips on starter homes and on home ownership. I am going to come on to why this is such a mistake for the homes we need in the future.
Alan Brown
The right hon. Gentleman is wrong about the quality standard. In my local authority, all houses bar a few that have exemptions meet the quality standard in Scotland.
In Scotland, we have built nearly 6,000 council houses in the same period that Labour built six. The records of the SNP and Labour are incomparable. There might still be people on council house waiting lists, but by building many more houses than Labour did, we are clearly moving in the right direction to tackle that.
In this Parliament, 30,000 affordable homes will have been built in Scotland under the SNP Government. We are aiming to increase that to 50,000 in the next term. We are certainly doing our best to tackle housing waiting lists.
In my opinion, right to buy has had its time. In Scotland, the SNP Government have legislated to take it away for council houses. That has clearly had an impact on waiting lists in Scotland, which the shadow Minister talked about, because it allows greater stock retention.
Government Members have been shouting about home ownership. As a point of interest, my parents bought their council house under right to buy, so I know that people have benefited from it and I have seen what happens. People who buy their homes take pride in them. I know that that has happened over the years. The policy was right at the time, but we now see the problems that have arisen. Initially, all the money went to central Government and was not used for stock replacement. That is why we have the problems that we have today.
In many areas, large family houses have all but disappeared from the stock because of the right to buy. As we have heard, it has led to an increase in private renting to compensate for the lack of social housing. That drives up housing benefit costs. It is therefore counterproductive to extend the right to buy to social landlords, because it will keep that vicious circle going.
A study by Glasgow University estimated that the right to buy cost £3 million a year in Renfrewshire in extra housing benefit. The same is true in England, where up to 40% of the flats that were sold under right to buy are now in the buy-to-let market. This is a UK-wide issue and it will only get worse with the proposed extension of the right to buy to social housing.
Another unintended consequence of the previous right-to-buy policy is that couples who bought their houses many years ago, including my parents, might end up living in a house that is unsuitable for their needs when they are elderly. There is a risk that people will be trapped in their houses because not enough social housing is available for them to move to, or because priority for those new council houses that are being built is given to people who already live in council houses so that there is a through flow. Houses are not always suitable for the needs of the people who stay in them.
As a councillor, I have also seen unintended consequences relating to the common repairs to, and upgrades of, tenement properties. When people buy such properties, the title deeds say that they are responsible for shared repairs and other upgrades. That all seems fine when they sign on the dotted line, but people often object when councils want to do work to the property. That is a particularly big problem with buy-to-let landlords who take over properties, because all they want is a return on their money. They do not want to shell out any more money than they need to, so they obstruct upgrades to properties. Some housing schemes whose properties require external rendering are left with a patchwork-quilt effect because private owners and buy-to-let landlords will not pay the money for the upgrades.
I have highlighted some of the problems that I have seen as a result of the right to buy council stock. Why would we want to repeat the exercise with social landlords? The Secretary of State keeps mentioning one-for-one replacement, but that proposal is as flawed as the maths accompanying the policy.
It is estimated that the right-to-buy discount payable to housing associations will be £10 billion to £12 billion. This is another area where the debate can be too polarised. The Government propose to cut £12 billion from the welfare budget—we have had a debate about tax credits—yet at the same time they want to make available a £10 billion to £12 billion taxpayer subsidy for people to buy the homes in which they already live. I ask Members to think of the difference that money would make if it were put directly into house building. It would create more homes, help drive down the cost of private renting and create more jobs. Those homes would also be more energy efficient, which would help hard-pressed families make their budgets go further.
On the maths accompanying the policy, the property agent Savills reckons that the Government have overestimated the average house price value and, therefore, the income it will generate. Councils therefore face the risk of having to pay more money than they will recover.
It is also a flaw that there is no guideline on how the one-for-one replacement will be managed in terms of house type, and there is no absolute requirement to provide a replacement in the same area. The housing policies of councils and local housing associations should be based on need and demand, but under the Bill they will be target driven and replacements might not be built on a like-for-like basis. Family homes could be sold off and there is a risk that decisions will be fudged and that they will be replaced by smaller units. That does not do anything for long-term housing need.
Dawn Butler
Westminster City Council, which is next door to the Prime Minister’s favourite borough, has a very wise leader who states that right to buy could wipe out swathes of social housing and that because of this Bill
“we will not be able to house the people that we need to house.”
Alan Brown
That is the risk I am highlighting, so I completely agree with that intervention.
Despite the Government’s bluster, if we look at the number of new build starts compared with the number of right-to-buy sales, we will see that their track record shows that one-for-one replacement has not worked. The SNP’s record in Scotland shows that completion rates for both private and social housing are much higher than those for the UK as a whole.
As a councillor, I have seen the benefits of targeted council house building in a locally led strategy. I have seen brownfield regeneration, town centre living to encourage vibrancy on their peripheries and—this is important to me—special needs housing and housing designed for the elderly ambulant. Such house building can be life changing for the new tenants, and it is heart-warming to hear the stories. We can talk about statistics and targets, but behind them there are real people and families who need houses. That is the most important thing. Another indirect consequence of a better housing strategy would be the health benefits—less bed-blocking ultimately means NHS savings—while more energy-efficient homes lead to healthier, wealthier families.
As I said, social housing will reduce housing benefit costs, so we would greatly appreciate it if the Minister considered devolving housing benefit in the Scotland Bill, as it would give the Scottish Government the risk and the reward in terms of house building. If we built more houses, we could reduce housing benefit and get more money back to recirculate. I would appreciate it, therefore, if he had a word with the Secretary of State for Scotland.
It is ironic that housing associations were originally seen as an ideal mechanism for keeping debt off the national balance sheet. We have already mentioned the ONS reclassification and the fact that this could become public debt. The Conservatives have argued that we need to reduce the debt in order to save future generations—it is the argument for cutting welfare—so it seems strange that a central plank of their strategy is to use taxpayers’ money to help people to buy their properties while forcing additional lending on to councils so that they can build replacement homes. Some of the economics do not add up, so I ask the Government to think again.
Zac Goldsmith (Richmond Park) (Con)
As Mayor, my hon. Friend the Member for Uxbridge and South Ruislip (Boris Johnson) has overseen the building of 100,000 affordable homes in London, which is 25,000 more than his predecessor.
Zac Goldsmith
I will not give way, because we all have very little time. I will perhaps give way later.
As my hon. Friend will no doubt acknowledge when he speaks later, the gap between supply and demand remains very wide, and without radical action it will grow wider still, further pricing Londoners out of their own city. Few people doubt that London is the greatest city on earth—it is why so many people want to come here—but that success, much of it down to his great work, is compounding—
Sadiq Khan (Tooting) (Lab)
It is a pleasure to follow the hon. Member for Ruislip, Northwood and Pinner (Mr Hurd), who, for the most part, made a very compelling speech. I rise to speak in an absolutely crucial debate for many Londoners. I commend the speeches from my right hon. Friend the Member for Wentworth and Dearne (John Healey) on the Opposition Front Bench, and from my hon. Friend the Member for Sheffield South East (Mr Betts), the Chair of the Communities and Local Government Committee.
There is a housing crisis in London, with a growing shortage of affordable homes to buy and rent. Precious public services are struggling to attract and retain workers, and the city’s businesses cite housing as their single biggest concern. Many Londoners are in distress over housing due to their inability to make any progress on a council housing waiting list or because of poor quality accommodation.
One of the biggest issues is the rising cost of housing to rent and buy, and, for many Londoners, buying their own home is simply a pipe dream. The average deposit to buy a place—not the purchase price—is now £100,000. That is three times the median salary of someone in inner London, and four times the salary of someone in outer London. As a result, more and more Londoners have no choice but to rent, yet rents in London have now reached an all-time high of £1,300. Rents are rising year on year, and have risen by 38% since 2010. Housing benefit spend—essentially, the taxpayer making up the shortfall between what Londoners can afford to pay and what the market is charging—increased in London from £5.3 billion in 2010 to £6.1 billion now. Add to that the Government’s welfare changes, the bedroom tax, cuts to tax credits and the lowering of the welfare cap, and that pretty toxic combination is hollowing out many inner-London boroughs. That is putting enormous strain on the social fabric of London, and increasing pressure on housing, transport and public services in many of London’s outer suburbs.
Dawn Butler
Does my right hon. Friend agree with the senior Tory who says that the right to buy will wipe out swathes of social housing?
Sadiq Khan
The Conservative leader of Westminster Council was speaking on behalf of Londoners who care about London’s social fabric and are worried about the hollowing out of our city—I wish that more Conservative Members would take up that debate. With the Bill, the Government have a real opportunity to start the process of solving this crisis, but they have flunked it. Instead of solutions, their proposals will make the problems even worse.
Let me turn to the extension of the right to buy to housing association tenants. Over recent years there has been no like-for-like replacement of affordable homes sold under the existing right-to-buy scheme. The Secretary of State could not dispute figures from his own Department that I put to him, which show that in London since 2012, only one in seven council homes sold have been replaced. How can anyone believe that it will be different this time? There is nothing in the Bill to guarantee that money must be reinvested in the local area, replacing like-for-like sold-off homes.
Some housing associations are relaxed about selling off homes in inner London and replacing them with units in cheaper parts of outer London or even further afield. That damages London’s social mix, accelerating the exodus of poorer people out of our great city, and making the affordability crisis even worse. To make matters worse, the only way the Government could fund this policy is by forcing councils to sell off the most expensive homes. In London, that means losing substantial amounts of affordable family homes, and the city’s low and middle-income families will be squeezed out to fund the sell-off of housing association homes nationwide.
Together with colleagues from across the House who want to join me, I will be fighting to retain the money from housing association and council property sales in London for Londoners. There must also be provision for like-for-like replacements in the same areas as where the properties are sold
It is not as if the Government are planning a big boost in truly affordable homes. They have put all their eggs in the starter home basket, but in London starter homes simply will not help struggling first-time buyers. With starter homes capped at a cost of £450,000, someone with a 25% deposit—that, by the way, is £98,000—would need an income of £77,000 to afford one. The Secretary of State talks about aspiration, but who exactly is he talking about?
This Bill is a missed opportunity. It will not fix London’s housing crisis; in fact it will make it worse. It will not deliver the genuinely affordable homes Londoners need to buy or rent. It will not help the councils and the Mayor to start to build the homes Londoners desperately need. It will not rein in spiralling rent rises for those in the private sector. It will not end the scandal of the homelessness problem.
Next May’s mayoral election is a referendum on the capital’s housing crisis. This Bill reinforces why that referendum cannot come soon enough.