Housing and Planning Bill (First sitting)

Gareth Thomas Excerpts

Tuesday 10th November 2015 Public Bill Committees

[Seema Kennedy]

Q 74 Mr Orr, I want to ask you about affordable housing in rural areas, and the portable discount in particular. Will you expand on that? How do you think it will affect the affordability of housing in rural areas?

David Orr: In the voluntary deal, we have agreed with the Government that in small, rural areas, in most cases, housing associations will almost certainly say no to a request to sell a home that a tenant is currently occupying, but they will have the opportunity to use the portable discount, which I hope will help to stimulate the development of new supply.

The fundamental challenge in rural England is that we need to build more homes, especially ones that are affordable for young families. Rural England is being hollowed out. As the 25-45 population grows in the country at large, it is declining in rural areas, because people cannot afford to live in villages that are often becoming like theme park villages, and that are in danger of becoming mausoleums. How we invest in new supply to keep rural England dynamic is a huge strategic challenge. The portable discount might create some of the financing that will allow that to happen, but we need to take a broad view and say it is time we addressed what is a genuine crisis in rural England.

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

Q 75 What is your estimate of the net impact of the Bill on London?

David Orr: I do not have a detailed estimate.

[Mr Thomas]

Q 76 You must have an instinct, though.

David Orr: Well, it is quite difficult to assess how many homes would be sold under a voluntary right to buy in London, because values are so high that although—

[Mr Thomas]

Q 77 With respect, the housing associations among your membership must have given you some indication of their view of the Bill’s effect in London.

David Orr: They have. If you assume that over time 5% or 10% of homes might be sold under the right to buy, that will raise very considerable sums that can be invested in new supply. I do not have a statistical analysis to back this up—we can ask our research team and provide further information if we have it—but my view is that it is likely to deliver an increase in both the number of homes built and the number of homes for social rent. Under the existing arrangements, it is very difficult to build for social rent unless you trade, sell and make a profit, and then use that profit to create the subsidy. The voluntary right to buy has the potential to release some of that trapped equity and allow it to be used for building new homes. It is likely that London housing associations will focus on building for social rent, as well as shared ownership and other products.

[Mr Thomas]

Q 78 What is your sense of the impact the Bill will have on co-operative housing?

David Orr: Fully mutual co-operatives are not contained in the deal, because people who live in them are not tenants of housing associations.

[Mr Thomas]

Q 79 Do you think that the rest of the Bill will help to increase the supply of co-operative housing, or will it just leave it as a tiny fraction of the housing stock?

David Orr: I think it is likely to be relatively marginal.

[Kevin Hollinrake]

Q 80 Ms Butters, I think you referred to the provisions under clause 74 on high-income social tenants as a blunt instrument, yet you conceded that there is provision to charge a proportion of market rent—I think you made some cursory reference to the taper. Is that not proof that the clause is not a blunt instrument?

Sinéad Butters: For us it is about the freedom and flexibility to set our own rents—decisions for our local areas, made by our boards, working with our communities and our local authority partners. I can understand that the taper has been set to mitigate some of the negative impact of applying that blunt instrument, in terms of an immediate move to market rents from social or affordable rents; however, that would not be my answer. My recommendation would be locally set rents, determined by local areas, with boards and local authority partners. We would still see the potential for those choices about higher-income tenants, but they would be based on real evidence and real income data and analysis, not on a judgment about what level is set nationally.