Emma Reynolds
Main Page: Emma Reynolds (Labour - Wycombe)
Mr Richard Bacon (South Norfolk) (Con)
I beg to move, That the Bill be now read a Second time.
It is my honour and pleasure to move the Second Reading of my Bill today. My interest in this subject was initially prompted by the fact that I represent the very rural constituency of South Norfolk, which has many young people who find it very difficult to get on the housing ladder or to find any place to live when they grow up and leave home. The idea of being able to stay in the area, let alone the village, where they grew up or to be near their parents is sometimes completely outwith the range of possibilities for them in a very rural area with many small villages. Of course, some young people will go off to big cities—in our case, to Norwich or cities in Essex, as well as to London or elsewhere—but the fact is that we do not have enough housing in our rural area. What has become apparent to me, and it would be apparent to anyone who takes notice of the debate across the country, is that the problems of housing are just as acute in many urban areas. In some cases, the problems elsewhere are even broader.
There is a very important but underestimated issue about how we unlock the energy latent in the population and deploy it to get more housing. The fact is that many millions of people in this country would like to get a piece of land and build their own house. The National Custom & Self Build Association estimates that about 1 million people would like to do it in the next 12 months, and that more than 7 million people would like to do it at some point in their lives. The availability of means to turn this latent desire or pent-up demand into something real—in my view, it would do a great deal to fulfil the nation’s housing needs—have been remarkably lacking. We have a housing market, if we can call it that, that is sclerotic.
Slightly more than 12 months ago when I was at the party conference in Manchester—I have recently returned from this year’s conference—house builders were still talking about how the housing market was quite fragile. They said that there was no certainty about the recovery, and that the sector still needed support. Yet only two or three months ago, the newspapers were full of stories about a housing bubble. It is quite remarkable how one can go from near stasis or sclerosis to a housing bubble within 12 months. It seems improbable that that would happen if we had a well-functioning housing market. In fact, it happened because we do not have a well-functioning housing market: the supply of housing does not rise to meet the demand for housing. We have a systemic problem or a sustained disequilibrium, to use the jargon, between the number of people who want houses and the supply of houses. There are a whole range of very understandable reasons for that connected with the structure of our planning system and the number of large-volume house builders who provide a great deal of the housing in this country, as well as the interplay between those two factors and between the large-volume house builders and the capital markets.
Although we do not have equilibrium, it is no good blaming anybody. I attended the debate on housing supply in the summer, which was moved by the hon. Member for Wolverhampton North East (Emma Reynolds). I found it a rather appalling and depressing experience, because the first hour and a half was taken up with hon. Members on both sides of the Chamber essentially shouting numbers at each other about who had not done what. Shouting numbers will not get us far. Indeed, announcing targets will not necessarily get us far. If targets were the answer, we would probably have solved the problem by now.
One of the most interesting facets of public policy in recent years has been the widespread recognition, for example in policing, health and schools, that targets have often made the situation worse and allowed people to game the system. I am not sure that that is quite true of housing, but there is certainly a broad recognition in many areas of public policy that instead of worrying about numbers and setting targets, one should focus on removing the blockages that prevent the system from flowing smoothly. In other words, to use the term of art coined by John Seddon, the occupational psychologist and management thinker, if one spends more time studying “how the work works” and attempting to remove the blockages in the flow of how the work works, one frequently gets improvements in performance much greater than any target one would have dared to set. We have seen that again and again in different parts of local government, where we have had startling successes in performance improvement by taking that approach.
People have asked me whether it would make a difference if we had a statutory right to get a piece of land and build a house. They ask whether I can point to a number and say, “That is how many extra dwellings would be created as a result.” The answer is, “No I can’t, and I’m not even going to try,” because the question misses the main point: that there is enormous pent-up demand among people who wish to get a piece of land and build a dwelling of their own, but it does not have an outlet because the blockages are too severe.
My humble Bill seeks to do two things: to create a register containing information on people who wish to get a piece of land and build a dwelling—individuals and associations of individuals—and to ensure that local councils have regard to that register when bringing forward their housing plans. I believe that such house building could make a significant difference if it were built into the warp and weft of the housing plans of local authorities and became, as it were, part of the new normal. A number of other steps would need to be taken in parallel for it to become part of the normal landscape, rather than an activity for an eccentric or highly wealthy fringe, as it is still too easily characterised. I will say more about the things that need to happen in parallel later, but I just say, to emphasise the point, that we need to take a broader view of the parameters of what is possible in trying to make our housing supply function properly and rise to meet demand.
This agenda touches on a far broader range of issues than I at first realised. It is not just about rural areas and urban areas, but touches on social cohesion, reoffending and disability. Stella Clarke, who runs the Community Self Build Agency in Bristol, has young people, who 10 or 15 years ago would have been rioting, literally building their own stake in the community. She has found a way to help young unemployed people who are in housing need to take action to shape their own future. Ex-service personnel, who had always had the accommodation that they needed provided for them in the forces, but who sometimes lose their way when they leave the discipline of the military environment, have been helped in the same way.
The front page of the Community Self Build Agency website quotes a local resident who was helped by the agency:
“I was encouraged by the local council to apply for the CSBA Scheme, I rang them and said; ‘I am disabled, unemployed, on benefits and I know nothing of building.’ They said; ‘You fit all the criteria!’ I have never looked back.”
We need to open our eyes to the parameters of what is possible if we are to unlock the energy of our people.
There are many people I need to thank for their help and advice on the Bill. First, the Minister’s terrific team at the Department for Communities and Local Government has helped me enormously in making the Bill technically sound. I thank Ted Stevens, who until recently was the chair of the National Self Build Association, which is now called the National Custom & Self Build Association, as well as his successor as chair, Michael Holmes, and the association’s members and supporters.
Ted Stevens was instrumental in a visit that was made by the all-party parliamentary group on self-build, custom-build and independent housebuilding—we were looking for a snappy title, Mr Speaker. We will shortly be changing the title to self-build, custom housebuilding and place-making, which I wish we had called it in the first place, to connote the important difference between building boxes on the one hand and using a bit of thought to shape places and communities that work as places to live on the other.
Ted Stevens was instrumental in helping the all-party group with our trip in the summer to Berlin to look at the Baugruppen, or building groups. More than 300 such groups have sprung up in Berlin, delivering more than 5,000 dwellings. I am delighted to see the hon. Member for Nottingham North (Mr Allen) in his place, who came on the trip. We were accompanied by senior officials, right up to director general level, from the Department for Communities and Local Government, as well as a range of housing experts from around the country, including from the Scottish Government. It was an extremely enlightening visit.
One thing that became apparent was that if the local authority—in this case the Berlin senate—co-operates with and encourages activity by people from the bottom up, there can be a surprising range of results and a surprising speed of delivery, and more can be done than is currently done in this country to meet housing need. I think we could import some of the ideas that we saw in Berlin to this country. I am conscious that one cannot just take a model and lift it across, because one has to take account of local circumstances, but the fact is that the Baugruppen have contributed nearly 200,000 dwellings in Germany. It is not a small sector, but a significant one.
I received an e-mail from a lady in Yorkshire a few months ago who had heard about my Bill, saying that she and her husband had been looking for a piece of land for five years, and that they were no further forward now than on the day they started. She said, “It seems as if in this country it will never be, as it is in Germany, a middle-age right of passage that you can go and get a piece of land and build a house.” In Germany, if somebody wants a piece of land, they go to their local authority and say, “I’d like a piece of land please.” The way the system works in Germany is that the land is, in the first instance, sold by landowners to the local authority. I am not saying that we necessarily need to repeat that system here; I do not think that we do. I am just telling the story because I think that it is illustrative.
When someone asks for a piece of land, the local authority says, “Would you like a big one or a small one?” The big ones are slightly disproportionately expensive to subsidise the smaller ones, which are slightly disproportionately cheaper. That is relatively easy to do and there is no chronic shortage; and that in a country where, as anyone who has been listening to Neil MacGregor’s wonderful programme about Germany on Radio 4 will know, a third of the land area is forest. I will not segue into a great soliloquy on the importance of hugging trees and the German soul, because it would be outwith the bounds of this debate, but the fact is that there is plenty of land and it can be done.
One thing that people do not understand in this country, which they really should—I have dwelt on this and have tried my best to get the point across—is how much land we have. Only 1.2% of the land area in this country is taken up by houses. We could double the number of houses in this country, if they took up the same amount of land, and still have 97.6% of the land not being taken up by housing. Surrey has more land devoted to golf courses than to houses, and that is in the rich south-east. These are important facts—I am not making them up.
I have taken the official statistics from the Department and asked The Daily Telegraph to publish them. The senior political correspondent of The Daily Telegraph, Christopher Hope, has been running a very successful campaign for years to point out that the wicked Conservatives wish to concrete over England. Sometimes he gets one of his reporters to phone me up, and she says, “You’re a rural MP. You’ll be worried about all this extra housing.” I then give the reporter 10 or 15 minutes on why we need more houses, and because she phoned me and it would be really rather rude to put the phone down, she has to sit and listen. I know full well that they will not actually quote me, and they never do, and then instead I see a quote from somebody else saying, “It’s disgraceful—there are actually people who think we should have enough houses for everyone in this country. It’s wicked.”
The fact that Mr Hope is my brother-in-law is simply annoying, but I hope that at some point I can persuade him to publish the facts about what is going on. A ludicrous dichotomy is emerging—the idea is that people either want to concrete over England and do not care about beautiful scenery, or they only care about beautiful scenery and do not want there to be enough dwellings for all of us to have somewhere to live. I do not know anybody who falls into those categories. Most of the people I talk to both love beautiful scenery and want somewhere to live. My firm belief is that both are possible, and I hope that my Bill will make a contribution to making that happen.
Emma Reynolds (Wolverhampton North East) (Lab)
I welcome the hon. Gentleman’s bravery in taking on the Telegraph in the form of his brother-in-law. According to the national land use database, 5.4% of land is homes and gardens, and only 1.1% is the homes themselves. Not only are we not concreting over the countryside, we are dedicating a large percentage of the land that is developed to gardens.
Mr Bacon
Indeed. When I talked about 1.2% of the land—the hon. Lady said 1.1%—I was referring to houses. She is right that gardens take up at least another 2% or 3%. I believe that railways take up 2.2%, and that the built environment as a whole, including absolutely everything—factories, offices, roads, railways, churches—takes up about 9% or 10%, so 89% to 91% of our land area is not built on.
I am sure that there will be discussion of the green belt, but I will not dwell on it, partly because we do not have any green belt in Norfolk. Searching Google images for “green belt” gives maps of where the green belt is, showing that none of it is in Norfolk. We have a huge amount of land, and the green belt is an unfortunate distraction. It has been created in such a way that there are places that are not in the green belt, including in my constituency, that I would be horrified to see built on. I would sit in front of the bulldozer to prevent it. There are also places that are in the green belt but probably should not be. We need to be more intelligent about that. Personally, I think people’s instinct to preserve beautiful countryside is good, and I completely support it. The Campaign to Protect Rural England wrote to me saying, “We’re interested to hear that you’ve got a Bill, and we are quite supportive of this sort of approach, even though you might think that all we’re interested in is hugging trees and protecting wild animals.”
Mr Bacon
I feared that my speech would be more like Oscar Peterson than J. S. Bach, and so it is proving, but I will conclude my thank you list because I want to move on. Lloyds bank has been tremendously supportive to the planning sector. Stephen Noakes is head of mortgages at Lloyds bank, and the current chairman of the Council of Mortgage Lenders. He supported our all-party group on self-build, custom-build and independent housebuilding when we had a meeting last year with the university of York. It launched a report on blockages in the self-build and custom house building sector, and Stephen Noakes was a sponsor of that report. Earlier this year we had a meeting with Kevin McCloud in a Committee room upstairs. The meeting was packed with MPs and peers, Stephen Noakes was also there and I found myself on a panel with him at the party conference. Earlier this week Lloyds bank announced a £50 million fund for small house builders to encourage a sector that has been decimated.
When we consider what happened after the housing crash, and the fact that many big banks, including Lloyds bank, decided at the highest level to shrink their exposure to property on their balance sheet, the fact that such institutions are making long-term commitments is extremely welcome. Lloyds bank has created the Lloyds bank commission on housing to explore and address such issues. That is chaired jointly by two of the Minister’s predecessors—my hon. Friend the Member for Hertford and Stortford (Mr Prisk) and the right hon. Member for Greenwich and Woolwich (Mr Raynsford), and they will bring together in that commission a range of housing experts.
On the front of a recent document Shelter asks the extremely important question:
“Where are our children going to live?”
When one looks at the Lyons review, which was commissioned recently by the official Opposition—I think I have a copy of it somewhere—the front page title is:
“Mobilising across the nation to build the homes our children need”.
I was given the review only yesterday so I have not had a chance to look at it all. I have heard it slagged off in newspapers, probably by people who have not read it all. I am sure it contains things I would agree with and things with which I would disagree, but it is an interesting and important contribution.
Emma Reynolds
Interestingly, the report contains a section on the subject of the hon. Gentleman’s Bill, which I will talk about in my remarks, and it has been widely welcomed by the sector and the industry.
Mr Bacon
I am glad the hon. Lady says that, and I look forward to reading it with interest.
I was talking to Shelter at a meeting and trying to distil my policy. I have not come to this as a housing expert, but I look at the world and think that if we had got things right there would not be a problem, there would be an equilibrium between supply and demand, and I would not have to stand here in the first place. I distilled my policy down to six words: everyone should have somewhere to live. That is it; that’s what I know. More than that I do not know, and the rest in some ways is details. We must ensure that everyone has somewhere to live, and at the moment they do not. I think we need every available shoulder pushing on that wheel. Of course, if a big rock is in front of the wheel we need to move it out of the way, but I am up for any idea that increases the total supply of housing, particularly if it is done to the highest possible standard.
One simply cannot tell which parts of Poundbury are affordable housing. When they are pointed out, people look at them and think, “Phwoar—I’d like to live there.” They have no particular special status; people are taken off the local housing list like everywhere else, and Poundbury has its share of social problems. However, the shape of community that has been created does something to lessen some of those problems.
A YouGov survey two years ago indicated that 75% of people do not want to buy the product of the volume house builders which, as I said earlier, I think are acting rationally inside a systemically flawed system. One of the main constraints on supply is that the standard house models of the volume house builders are attractive to only a small proportion of the total numbers of would-be buyers in the population. That makes it difficult to get above an average of 2.6 sales per month per site. Where there is a custom-build approach—or, as I might venture to call it, a customer-build approach—they can get two, three or four times that level of performance.
There is a wonderful development—it is not an experiment; it has happened—in the Netherlands in Almere on the opposite side of the IJsselmeer from Amsterdam. Many, many dwellings were allowed—it now has 3,000—and most are self-build and custom build. When the volume house builders around the edge were basically in stasis and nobody was buying their dwellings, there was a hive of activity in the middle of that development because the building of houses was being treated as if customers mattered.
A colleague recently retailed to me the story he had been told about a former Conservative MP who had been on the board of a major house building company. The former MP had said, “I have been on the board of this big PLC house builder for eight years. We have talked about land acquisition, finance, buying other businesses, the supply chain, cost control, staffing levels and skills. The only thing we haven’t talked about is houses.”
The truth of the matter is that we do not really have a housing market. If we did, there would be enough houses for everyone. What we have is a land market—which is very tightly controlled—and volume house builders which have access to the open capital market act rationally: they build when it is profitable to do so and take out an insurance policy to cover the down side. A farmer who is getting 3.5 tonnes of winter barley from a field is very happy if someone gives him £4,000 a year for the next 10 years for an option to apply for planning permission to build houses on it one day. That may never happen, but the only entity that can afford to do that is a large, well capitalised house builder. Small house builders cannot possibly do that.
It is even worth a large house builder’s while to employ someone—at considerable expense—to work out how to remove a joist that costs £76 from a roof. It is worth the investment of thousands of pounds and a considerable amount of time to figure that out, because for 1,000 houses on one site it will save £76,000. For someone who builds 9,000 or 10,000 houses a year, it will save £750,000. Over 10 years, that will amount to £7.5 million. What business would not want to save such a sum? But then along comes the purchaser, accompanied by the sales agent who, for some strange reason, often drives a pink Fiat. The sales agent is trying to sell that rather pretty little shoebox, containing furniture that is manufactured to deceive the eye. The width of a double bed in most show homes is about 3 feet 11 inches or 4 feet. Furniture for show homes is not furniture that could be used: it is specifically designed to make the rooms look bigger. The prospective buyers, perhaps a husband and wife with a baby, say, “We are thinking of having another baby. Can we extend into the roof?” But they cannot do that because the design, to save that £76, makes that impossible. The whole thing would fall down.
In a customer-driven environment, from the beginning the customer would say, “This is what I want now, and this is what I may want in the future”, and the market would respond. Some mathematician has worked out that if someone buys a Mini Cooper from the factory in Oxford, there are 126,000 different permutations to choose from.
Emma Reynolds (Wolverhampton North East) (Lab)
I warmly congratulate the hon. Member for South Norfolk (Mr Bacon) on both an excellent bit of luck and an excellent choice: excellent luck in coming fourth in the private Member’s Bill ballot—not many of us can say we have come fourth in it—and excellent choice of the specific Bill he has brought forward. I went to his all-party group on self-build, custom-build and independent house building meetings earlier in the year and I know he has become a champion for self-build and custom build in Parliament, and I commend him for his work in this area.
I commend Ted Stevens, who has already been mentioned by a number of hon. Members, the former chair of the National Custom & Self Build Association. I thank him and the association for contributing to the Lyons housing review, which the hon. Gentleman mentioned.
I also want to thank Igloo Regeneration, which has also been mentioned, not least by my hon. Friend the Member for Nottingham North (Mr Allen), for its submission to the Lyons review. I will say something later about the work that has been done in this area.
On a personal note, I want to put on record the fact that I have lived in a self-build house. In fact, the first house I lived in was a self-build house, because my father is an architectural consultant, and he built his first self-build house in the 1970s and then built another one in the 1980s in which he still lives, so I do have some personal experience. However, I would suggest that most of us mere mortals who do not have the experience my father has in architecture or the trades tend to be more attracted to custom build because it is somewhat easier. It gives people the choice and control over the design, but it takes away a lot of the risk, uncertainty and challenge for those who do not have significant experience in the house building sector or market.
First, I want to say something more general about the opening remarks of the hon. Member for South Norfolk. Labour Members support his Bill and agree with his overall and—let us face it—simple objective that everybody should have somewhere to live. I think that would be difficult to argue with, and I agree with him wholeheartedly. I also agree with his analysis that for quite some time the market in this country has not been delivering anywhere near the number of homes we need.
Usually the Minister and I would trade insults and figures and so forth across the Dispatch Box, but I will attempt not to do that today. This is a long-standing problem. The problem of under-supply of new homes goes back some three decades or more, and I agree with both my hon. Friend the Member for Nottingham North and the hon. Member for South Norfolk that there are some pretty deep structural and, as the hon. Gentleman said, systemic problems with the housing market.
One of the big problems, which both Members highlighted, is the problem with the land market. That structural problem affects the potential of self-build and custom build. I will focus on that later in my remarks, but I want to put that right up front as one of the key, fundamental issues we need to deal with.
We support the creation of the register by local authorities and a requirement for them to identify demand for self-build and custom build. I called for that in my first major speech as shadow housing Minister in January. The Government have been talking about it for some time and I welcome the support I believe they will give the Bill. As the hon. Gentleman suggested, evidence presented by the National Custom & Self Build Association and others shows significant unmet demand, so we also agree when the Bill sets out that local authorities should have regard to the register that they will have to put in place when carrying out their planning functions and producing their housing plans.
Let me deal briefly with the specific reasons why the Opposition support the Bill and why I support it. The first is that, as the hon. Gentleman discussed, it will give a voice to those shut out of home ownership. This is not exclusively about them, as there will be owner-occupier families who want a bigger home or even a smaller, more bespoke home. However, some first-time buyers are priced out at the moment. He talked about the ratio between the average salary and the average house price, which is scarily high in some areas of the country, not least London. The generation who are between the ages of 20 and 34 are the most deeply affected by our failure to deliver a market that delivers enough homes. We know that one in four of that age cohort are living at home with their parents.
In the last 12 months that I have been doing this job, I have met so many parents who crave an empty nest. I am sure they do not mean it—[Interruption.] Oh, there are some in the Chamber. Extraordinarily, 3.3 million people in that cohort are still living with their parents. As a country—I say this of successive Governments —we must be doing something wrong, and the system is not working. This register would be one approach to and recognition of that failure and unmet demand. I am also keen on the register because planning applications, which are between the council, as they should be, and groups of people, some of whom are in favour and some of whom are against, often do not include that younger generation, so the register could be one way of seeking to give them a voice in this process that they do not currently have.
Secondly, as the hon. Gentleman set out in his excellent speech, by promoting self-build and custom build we can, in turn, promote more customer choice and a drive for better quality. We often focus on the numbers in our debates, talking about a Government not producing a certain number, describing what our party would do and saying that we would like to double house building from the current level. However, any such increase cannot be at the expense of quality. The interesting thing about this part of the market is that it is so focused on quality. As he set out, if the customer is put at the heart of the process, we inevitably drive up quality. On energy-efficient homes, someone who is in the driving seat and who will be subject to the energy bills has much more motivation to try to commission—if it is a custom build—or build a house that will give them the lowest possible energy bills in the future. The volume house builders perhaps do not have that same motivation, because they will simply sell on and move on. Where the customer is driving that process, they will be the one living in the home for some time, so I am totally with him on this point, and how we drive up quality is important to the wider industry, too.
Thirdly, as the hon. Gentleman mentioned, it is important that we promote self-build and custom build to a much wider range of people. Recent research carried out by the university of York found that a variety of households could benefit from self-build and custom build but the current market is dominated by an older, asset-rich demographic, although not exclusively so. The hon. Member for Sherwood (Mr Spencer), who is no longer in his place, intervened on my hon. Friend the Member for Nottingham North to suggest that although Kevin McCloud’s programme is a fantastic contribution to this debate, its projects often run over budget and over time. We need to de-risk the process, and so although I welcome the initiatives in the Bill we can do more on that. I know that the Government have done some interesting things on trying to make sure that mortgage provision is available in this area, as that remains a major barrier.
Emma Reynolds
I could not agree more with that. It was interesting to meet Kevin McCloud at the all-party group meeting that the hon. Gentleman organised earlier in the year. I am sure that Kevin McCloud’s vision is for a much more inclusive and comprehensive sector catering for people of different backgrounds and incomes, but his programme can sometimes focus on those who are having difficulty. Perhaps that is because it makes for more interesting television, as the hon. Gentleman has implied.
My hon. Friend the Member for Nottingham North made an interesting point about community build and his experience on the visit that the hon. Gentleman organised to Berlin, where a much more collective approach to these projects is taken. Our country has some real trailblazers, but they are few and far between. We have some interesting initiatives, but they are not going on at scale in the way we see in Germany and other countries.
Mr Allen
I think you were otherwise engaged when I mentioned the Yard in Bristol, Madam Deputy Speaker. I do not know whether it is in your constituency or nearby, but it is a classic example of a community starting a development together. I wish the House had facilities to enable the hon. Member for South Norfolk (Mr Bacon) to make a presentation of the sort we have seen, showing example after example of different groups and types of people, some with and some without a connection, some where people have responded to an advertisement, all coming together. Delighted as we are that Kevin McCloud has raised the public profile of self-build, that approach is the antidote to it, as it is about collective provision rather than just individual provision.
Madam Deputy Speaker (Dame Dawn Primarolo)
Order. I did hear the reference that the hon. Gentleman made—he would be surprised to know that I can do more than one thing at a time—but it is not normal for the Deputy Speakers to intervene. While I am on my feet, may I say that the provision has historically been done on a community basis, not only in Bristol, but in lots of places? Minister.
Emma Reynolds
Thank you, Madam Deputy Speaker. You have just promoted me, and I am very grateful for that. The point I was making was not that this is not going on, because we know it is happening in Bristol, Cornwall and other parts of the country. My point is that in Germany and other European countries it is going on at scale, not only in self-build—so on an individual basis—but in collective build. I am referring to the group build discussed by the hon. Member for South Norfolk and my hon. Friend the Member for Nottingham North.
I also wish to say something about social housing, because some impressive Labour councils—I am trying not to be party political—have undertaken interesting initiatives using custom build. That is not happening in all parts of the country and it is not happening at scale, but we can learn and draw inspiration from it. In fact, in a new scheme in Lewisham, the local Labour council is running a custom-build scheme that allows residents—my hon. Friend the Member for Lewisham East (Heidi Alexander) knows about this—to choose the design, select the contractors and specify individual requirements. We should not limit this just to private sales: it is just as important to involve social housing residents in design and place shaping, as the hon. Member for South Norfolk said. That is an innovative way to go about new build.
Finally on the Bill’s specifics, I welcome the hon. Gentleman’s intention to delete the last part of the long title, which states:
“to allow volume house builders to include self-build and custom-build projects as contributing towards their affordable housing obligations, when in partnership for this purpose with a Registered Social Landlord; and for connected purposes.”
I understand that his intentions were good, but I agree with his analysis that, if we are not careful, that provision could be misused. We would very much like to protect section 106 arrangements and ensure that developers play their role in delivering affordable housing. I appreciate that he has not been allowed to delete that provision for some strange, technical drafting reason.
The Lyons housing review rightly identifies the problem of the availability and affordability of land as one of the main barriers to self and custom build. In fact, according to the National Custom & Self Build Association, 48% of would-be self and custom builders have a budget of £200,000 or less, which is simply not enough to cover both the construction costs and the land costs. As my hon. Friend the Member for Nottingham North said, land is one of the key problems. Sir Michael Lyons specifically calls for land to be included in plans for self and custom build in a way that allows the kind of broad outline permissions that we see in the Netherlands and Germany to be granted. That is an interesting way to simplify the planning procedure for self and custom build, and it should be considered.
Sir Michael Lyons talks about the need to make land more affordable—the Government have spoken about this—and public land should be a priority. We should think about how public land could be invested as equity. In fact, the review makes recommendations about how we could use public land more innovatively for self and custom build and for other types of housing, too.
All too often, public sector land becomes a victim of the same process as private sector land, where the state—whether a local authority or a Department—sits on the land and waits to sell it off to the highest bidder, so that land is not built on because the process takes time. Sir Michael Lyons suggests in the review that the state take a more innovative view, perhaps by keeping a stake in that land or allowing deferred payments. That could unlock the potential for self and custom build and for other types of house building, too.
More widely, Sir Michael Lyons emphasises giving local authorities more power to be proactive in going about their planning and housing duties, rather than being reactive. In particular, the innovations of housing growth areas and new homes corporations proposed by the review will provide new opportunities for local authorities to assemble plots of land and, crucially, allocate some of that land for self and custom build.
Crucial to trying to drive this sector is the role of the small builder. The hon. Member for South Norfolk said that Mark Clare is on the expert panel of the Lyons commission. As important as Barratt and other volume house builders are, small builders are essential if we are to deliver a step change in the self and custom build ambitions that we all agree need to be furthered. Often, the smaller builders are doing the work and building these new homes.
Sir Michael Lyons and the Labour party more generally have been keen to seek ways to promote greater competition in the market, particularly by helping small builders to access finance. We have set out a help to build scheme, which would underwrite loans for small builders. Only yesterday, we had a meeting of five of the big banks with a number of small builders, facilitated by the Federation of Master Builders, and we were encouraged by the debate that went on between those two stakeholders. Again, if we could ensure that the banks were lending to small builders in a more significant way, it would help us to increase self and custom build in different parts of the country.
In January, in my first major housing speech, I talked about this subject and the need for small and custom builders to have access to land. I said—I still think that this is the case—that local and national Government ignore small sites too often and place much more emphasis on larger sites. Local authorities should include a higher proportion of small sites in their five-year land supply. Often, small sites are brought to market much more quickly. They are often simpler to develop and the projects are easier to get going.
I also said in my speech in January that more public land should be allocated to smaller firms and custom builders. In addition, we have committed to ensuring that a proportion of the homes built in new towns and garden cities will be built by smaller firms and self and custom builders. So there are lots of things that we can do in the land market.
The other aspect of the land market that we are poorly served by is the lack of transparency. We have committed to increasing transparency in the land market by ensuring that developers register the land that they own or have options on. Again, that will help people to identify plots of land for self and custom build.
Mr Bacon
The hon. Lady is making an interesting speech and has touched in almost the same breath on two exceptionally important subjects: land and finance. Does she agree that there is no shortage of land; there is a shortage of accessible land? There is plenty of “permissioned” land out there. Does she also agree that there is no shortage of finance; there is a shortage of financeable propositions? If the proof of concept in the experiment that Igloo is doing with institutional investment from Aviva works—by the way, a very good Norfolk investment institution, although I prefer the name Norwich Union—it will show that this can be done all over the country at scale.
Emma Reynolds
First, on land, I agree with the hon. Gentleman that, as he said in his opening speech, there is no absolute scarcity of land because we have not built on much of the land in our country. I agree that we have enough land to build more homes to meet housing need and to preserve our wonderful and beautiful countryside. We are dealing with an artificial scarcity of land, for all sorts of complex reasons that are not just to do with planning. We have said that if we win the next election we will keep the national planning policy framework, but this is not just to do with planning; it is also to do with speculation and the extended negotiations between landowners, developers and local authorities. Often, local authorities and local communities are unable to benefit to the degree that we would like from the uplift in value of that land. Capturing that value was one of the great innovations of new towns, and we would like to replicate it.
Developing infrastructure up front makes it much easier to gain public consent. People oppose development because they are concerned that their local schools and GP surgeries might become over-subscribed and their roads might become congested. If we can find a way, along the lines of what happened with the new towns—this is why we are proposing new homes corporations—of capturing that uplift in the value to put back into communities, we think that we can unlock sites more quickly, and for the benefit of those communities, and start to see an easing in the process of getting consent in the first place.
I also think that driving up the quality of new development more generally will help with seeking consent. Shelter, which has done a lot of polling on this, has told us that people often object to development because they are worried not necessarily about their house prices falling but that their community and area might be undermined and not look as nice. They are worried about the aesthetics of the communities and areas they live in. I think that driving up quality through self-build and custom build, and indeed more generally, could really help in the wider debate on how we seek consent for new development and, frankly, give it a better reputation.
The hon. Member for South Norfolk is absolutely right that we need to draw inspiration from our European neighbours, whether Germany, France or Austria. As he pointed out, Austria is top of the league when it comes to the percentage of new build. In the UK, self-build and custom build make up about 1% of new build housing, whereas in Austria the figure is over 80%, and in France and Germany it is in excess of 40%, so they are clearly doing something right. I agree with him that we cannot simply transpose their model, because obviously it is very different from ours. However, it is interesting to hear about the sorts of initiatives that he and my hon. Friend the Member for Nottingham North have visited and think about what we can learn and draw inspiration from.
In this great spirit of cross-party agreement, I will conclude by saying that we welcome some of the initiatives that the Government have introduced to assist self-build and the provisions of this Bill. We think that the artificial scarcity of land and the way it is brought to market, and indeed the land market more generally, are part of a much more fundamental problem that we will need to grapple with if we are to boost this part of the house building sector, and the other parts too. I will not get into that wider debate today, but it might be the area we do not always agree on. However, on the self-build and custom build sector, I welcome the Bill and the provision that local authorities should have a register. I also welcome the hon. Gentleman’s commitment to ensure that the sector drives up quality and that we have more innovation and creativity in the house building industry.