Housing Supply (London)

Eilidh Whiteford Excerpts

Wednesday 15th July 2015 Westminster Hall

[Dr Eilidh Whiteford (Banff and Buchan) (SNP)]

Thank you, Mr Chope. I begin by congratulating the hon. Member for Ealing Central and Acton (Dr Huq) on securing the debate, which I have listened to carefully. I genuinely regret that more London MPs have not been called to speak, because I know that the contributions they have to make are worthy.

What I have heard today leaves me in no doubt about the seriousness of the housing problems facing people in this city and the failure of successive Governments to really grasp the nettle, particularly with regard to affordable housing in London. Although I represent a seat in the north-east of Scotland, I am not a casual observer of what is going on here, because, like all Members from outside London, I spend my working week here. I live in this city when Parliament is in session and I need to find a place to stay too. Even from the very privileged position that MPs have, the distortions and excesses of property prices in London and in the private rented sector in central London are more than evident.

[Siobhain McDonagh (Mitcham and Morden) (Lab)]

Is the hon. Lady aware that part of the reason for people being squeezed out is the amount of buy-to-let landlords there are now, and that it is easier to become a buy-to-let landlord than it is to become a first-time owner-occupier? Is she also aware that by getting rid of tax relief on buy-to-let mortgages, the Government could raise £6 billion, which would be the equivalent of funding housing associations to provide 100,000 properties in our city?

[Dr Whiteford]

I am very pleased that the hon. Lady has managed to get those important points on the record, because they are pertinent to this debate and have not really come to the fore yet.

Prices are way beyond the purse of even quite well-paid people in London, and that is just not sustainable. The fundamental and interlinked issues at the heart of this are supply and affordability. A fundamental shortage of housing has pushed rents out of control, the consequences of which have been well rehearsed. The right hon. Member for Tottenham (Mr Lammy) made a key point by saying that someone on an average salary of around £30,000 a year cannot even dream of owning a house that costs nearly half a million pounds.

[Dawn Butler (Brent Central) (Lab)]

The average house price in Brent is £384,000, which is 19 times my constituents’ average take-home pay of £19,937. Rent can be 78% of a constituent’s income. That contributes to the housing crisis in London. Does the hon. Lady agree?

[Dr Whiteford]

I absolutely agree, and I am pleased that the hon. Lady has been able to make her point, albeit quite late in the debate. It highlights the fact that the Help to Buy schemes introduced by the Government will not even touch this problem, because even with those schemes, people are completely out of reach of the market. That takes us back to the point made earlier. It is easier now for someone to have a house in London that they do not live in than it is to have one that they do. In fact, they could probably live off the proceeds of the house in London, if they could get a foothold in the market. We need a housing mix that includes affordable homes not only for the people who have historically lived in the area, but for those who work here in normally paid jobs, whether in the private or public sector.

As hon. Members know, housing is a devolved matter in Scotland. We have property hotspots too and inflated property prices in some parts of the country. We have also experienced a shortage of supply of affordable homes, over getting on for 30 years, and we have inherited a legacy of depleted public housing stock—

[Mr Christopher Chope (in the Chair)]

Order. This debate is about housing supply in London. I hope that the hon. Lady will keep her remarks confined to that issue.

[Dr Whiteford]

I absolutely will, Mr Chope, but I think it is very important for us to understand that some of the ways we have tackled the underlying problems in Scotland might have lessons that are well worth sharing in other parts of the country. The way we have tried to tackle them is very simple: we have tried to build more houses, and our completion rates across all sectors—both private and public—have been much higher. The fundamental problem here is that we are not building enough affordable homes for people. The completion rates in Scotland across the private and the public sectors have been much higher. It is worth making that point because in London the situation is completely out of control and there are very real challenges for any Government in trying to put that right.

A key point raised today, as touched on by the hon. Member for Islington North (Jeremy Corbyn), is the issue of selling off housing association stock. It seems to me to be utterly insane. I cannot believe that any Government, with any sanity, would even attempt to do that, because if there is already a shortage of affordable housing, my goodness, why on earth would we sell off what we have? Hon. Members have made it clear during this debate that the money for which people will essentially be getting a free house could be so much better invested.

Earlier this week, I met the National Housing Federation, which was clear that it could build four houses for the giveaway that one tenant gets. Let us make absolutely no mistake about what will happen to those houses in a very short space of time: they will be sold off to tenants and, within a few years, they will end up back in the private rented sector at exorbitant rents. People will not be able to live in the houses if they are on decent salaries, and if they are on lower salaries, they will be pushing up the benefits bill yet further by having to be supported in their housing costs. The proposal does not address the underlying shortage because it does not build more houses and that money is simply not being reinvested. I wonder how many MPs are renting, in the private sector, homes that were once local authority or housing association homes that have been hived off into the private sector and are now being let at market rents that only MPs and other very privileged people can afford.

The Budget last week was terrible for housing. The point has been made about the changes to social rents. Of course, there are pros and cons to that, but one of the big problems is that it will disincentivise investment by housing association providers here in London. The National Housing Federation said in its initial analysis that it expected 27,000 fewer houses to be built because of the changes announced last week. That seems to be compounding the problem, not addressing it. We also need to look at whether people will be disincentivised from investing at all. The NHF told me that it already knows of one housing association that has cancelled a planned house building project on the back of last week’s Budget.

I cannot but agree with Shelter, which said that last Wednesday was

“a bad budget day for housing and those struggling with housing costs…Only if you invest in affordable homes by rebalancing investment and having a housing strategy that recognises house building, rents, benefits, and homelessness are part of the same problem, can you permanently bring down the welfare bill. If you just slash and burn benefits in the hope people in genuine need will miraculously find well paid jobs, cheaper homes or fewer children, you’re unlikely to succeed in anything but making more people homeless.”

I do not think that problem is more acute in any part of the UK than here in London, where people are often working in low-paid, service-level jobs, but are having to make long commutes into work because housing is now increasingly out of reach.

We know that if we invest in affordable housing, we can tackle the problem at its roots—that we can tackle not just the symptoms of the problem, but the underlying problem. The UK Government need to boost their funding for affordable housing throughout the UK, but I urge them to be much more ambitious. I noted Government Members’ scepticism towards the points made about selling off the housing stock, but we have heard very little about actually building new houses, and the Government’s ambitions for that are woeful. They need to be building 100,000 houses every year because of the lack of supply, and London is at the heart of that. Londoners would benefit from that, and those in average-wage or low-paid jobs would gain a great deal from it, but investment in housing would transform the lives of many people throughout the UK, and that work has to start here.