Housing and Planning Bill
Debate between Gareth Thomas and Brandon Lewis
Brandon Lewis
My hon. Friend has made a good point. That is one reason why the strictures of legislation do not work in this context, and why it is important that we complete the consultation—which runs until 18 May in order to receive all the feedback and deal with this matter in regulations. As the discount is proportional, the difference in values will be dealt with by the way in which the percentages will work.
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
The Minister will recall that at the end of last year, in Committee, there were a number of exchanges about housing co-operatives. As a result of changes in the Bill, housing co-ops that own properties are largely exempt from many of its provisions, whereas those that manage properties on behalf of local authorities will still be badly hit by many of the provisions. Potentially, housing co-op properties will be among the 100,000-plus properties currently owned by councils that are likely to be lost as a result of the Bill.
Might the Minister be willing to make a commitment, before the Bill returns to the other place, to look again at the specific impact on co-ops that manage properties on behalf of councils?
Brandon Lewis
I shall say a little about the provision concerned in a moment, but we will be very clear about the fact that a new home will be built for every home sold.
Housing and Planning Bill (Seventeenth sitting)
Debate between Gareth Thomas and Brandon Lewis(8 years, 11 months ago)
Public Bill CommitteesRead Full debate Read Hansard Text
The Minister for Housing and Planning (Brandon Lewis)
As you mentioned this morning, Mr Gray, this is the final day of the Committee. We have finished scrutinising the Government’s proposals for the Bill; for the rest of the day, we will focus on the propositions from the Opposition. The hon. Member for Harrow West and others might be particularly focused on the rest of our deliberations and indeed on Parliament for the next few days, but people generally and the members of the Committee might also thinking about and looking forward to Christmas, so I wish everyone well for Christmas.
As I said, we have completed our consideration of the Government’s proposals for the Bill at this stage, but Opposition Members keep surprising us—I suppose in the Christmas spirit—with gifts on the amendment paper. The hon. Member for Harrow West is a gift that just keeps on giving. I am of course more than happy to accept his offer of gifts and to spend the rest of our time in Committee considering the Opposition’s suggestions for the Bill, now that we are done considering the Bill as drafted. Never let it be said that we are not happy to accept and enjoy the good will of all Committee members.
The new clause tabled by the hon. Member for Harrow West would introduce a statutory duty in respect of lending to small and medium-sized house builders. I have said clearly on the record that we recognise that the lack of availability of development finance can be and has been a major barrier to smaller firms that are looking to expand and develop their building activity. Indeed, as outlined earlier, in the survey conducted by the Federation of Master Builders this year, more than 62% of respondents thought that the availability of finance was a constraint on housing supply.
I am concerned to ensure that we do all we can to help small and medium-sized house builders, because they are key to delivering the housing we need throughout the country. Nevertheless, introducing a statutory duty on the Secretary of State to promote lending by banks to small and medium-sized companies simply will not address the problem. We share the desire to see it happen, but I suspect the hon. Gentleman realises that such a duty would not work. As my hon. Friend the Member for Croydon South said, the Secretary of State has no power to force banks to lend to small businesses, so the new clause is technically unworkable. However, it may please the hon. Gentleman to know that the Government are already taking action.
In July I launched the £100 million housing growth fund, which is a partnership between the Homes and Communities Agency and Lloyds Banking Group, to help smaller builders to get access to the finance they need to build more homes and grow their businesses. In the autumn statement, the Chancellor announced further measures to support small and medium-sized builders, including a housing development fund that will provide access to £1 billion of loan finance over up to five years. The new fund brings together and expands the builders finance fund and custom build serviced plots loan fund as well, providing more flexibility for Government support in those emerging markets.
We have also created the British Business Bank for £782 million of facilitated lending and investment. That aims to unlock £10 billion of financing for smaller businesses over the next five years. The Chancellor also announced support for small and medium-sized house builders specifically through amending planning policy to promote the delivery of small schemes, some of which we have debated in the Committee in the past few weeks.
Other proposals announced in the autumn statement will halve the length of the planning guarantee for non-major developments from 26 weeks to 13 weeks, ensuring that those smaller builders are not slowed down by an unnecessarily bureaucratic and slow planning system. With those assurances on Government activity, I hope that the hon. Gentleman will withdraw his new clause.
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
It is lovely to have the Minister of State back in his place. We all noticed that he effortlessly passed the hospital pass of the ending of secure tenancies to the Under-Secretary of State, which was a skilful dodge—the Under-Secretary had better watch his back in the Department.
I welcome the Minister’s detailing of the various measures that he and the Chancellor of the Exchequer have set out to help small and medium-sized builders. I leave him with the thought that perhaps not enough has been done yet to end the concerns of many in that part of the house building market about the shortage of finance. I welcome the steps taken, but I encourage him to keep this matter in close view. In that spirit, I beg to ask leave to withdraw the clause.
Clause, by leave, withdrawn.
New Clause 10
Planning obligations in respect of apprenticeships
‘In section 106 of the Town and Country Planning Act 1990 (planning obligations), after subsection (12) insert—
“(12A) The Secretary of State may by regulations require planning obligations to include a requirement to offer apprenticeships to local people on sites where 50 or more dwellings are to be constructed.”’—(Mr Gareth Thomas.)
Brought up, and read the First time.
Brandon Lewis
Actually, I think the hon. Gentleman does not go too far in breaking into the love-in. People should bear in mind that a lot of the building work we are getting done at the moment is thanks to some very positive work migration. That free movement of labour has been very useful to the construction industry over the past few years.
We want to make sure that the public sector plays a full part. I am proud to be a member of the Government that want to deliver 3 million apprentices in this Parliament, building on the 2 million in the previous Parliament, and we have changed Government procurement rules. The hon. Member for Harrow West talked about what could be done directly. We have changed Government procurement rules so that all relevant bids for central Government contracts worth £10 million or more and lasting more than 12 months must demonstrate a clear commitment to apprenticeships.
Mr Thomas
Might I ask the Minister, while there is a period of friendliness between us, to look at the guidelines that the HCA used to have, which encouraged housing associations to offer quality apprenticeships, and consider whether there might be scope for encouraging the HCA to bring them back?
Brandon Lewis
Worryingly, I am going to say yes. I would agree with the hon. Gentleman again. I am very happy to look at that. There is obviously a balance at the moment in working with housing associations and the HCA. We have made it clear that we want housing associations to be declassified by the Office for National Statistics, but the housing association sector is keen on the area in question, and I have been speaking to David Orr, the chief executive of the National Housing Federation, about the skills issue. We will be doing a piece of work on that, and I am happy to liaise directly with the housing associations as well as with the HCA.
More specifically on construction apprenticeships, we are supporting initiatives of the Construction Industry Training Board and those that flow from the work of the Construction Leadership Council. In addition, the CITB has developed a range of initiatives, working closely with the Department for Work and Pensions and the armed forces, through the resettlement service, and with local enterprise partnerships.
A legal requirement for all section 106 agreements on sites with 50 or more dwellings to include a requirement to offer apprenticeships to local people would not necessarily support apprenticeships. It could be detrimental. Experience has shown us that without effective dialogue such as the work we are doing with the housing associations and indeed with people doing apprenticeships, some of the objectives that have been set out, which I know have the best intentions—I take the hon. Gentleman’s comments absolutely—can have unintended consequences and result in apprentices being unable to complete their apprenticeships.
I will briefly explain that. It is important to remember that apprenticeships are real, proper jobs, with a structured training to prescribed standards, which require a significant time investment from the employee as much as the employer. The taking on of an apprentice must fit the employer’s work patterns and skill needs. In construction, where work happens from project to project, consideration must be given to the labour skills and general skills needs for each project, and what is therefore practical and capable of delivery.
For example, smaller projects, but even projects of more than 50 homes, may not be able fully to support apprenticeships, especially as an apprentice cannot transfer between trade frameworks. It is not the length of the project but the analysis of the length of the trade activity undertaken within the project that establishes the number of apprenticeships it can support.
Also, requirements to recruit from the local area can in some circumstances be unsustainable. To pick up the point made by the hon. Member for Bootle highlighting mobility, the construction industry workforce is one of our most mobile, and many contractors operate across the country. It may not be feasible for a company based in a different area of the country to support a locally-recruited apprentice once their element of the project is completed. I want to work directly with the sector on that issue.
I hope that those assurances and my explanation will lead the hon. Gentleman to accept our determination of the matter, and to withdraw the new clause.
Mr Thomas
I am grateful to the Minister for his reply and his willingness to look at the issue of HCA guidance. A number of contractors and social landlords told the inquiry to which I referred that the framework had worked well, and I gently suggest that that might be another reason for looking at the matter again.
I welcome the Minister’s personal commitment to the area in question. As a last point, I would urge him to consider the point that he ended on—the quality of construction apprenticeships. I worry that, in the past, some apprenticeships on offer have not been of high quality, which might have been a factor in putting some people off going into the construction industry. However, given the Minister’s helpful remarks, I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 12
Tenants’ rights to new management in property sold under LSVT
“(1) This section applies to housing which—
(a) was previously owned by a local authority;
(b) was part of a large scale voluntary transfer falling within the definition of section 32(4AB) of the Housing Act 1985; and
(c) the disposal of which was subject to the consent of the Secretary of State under section 32 of the 1985 Act.
(2) Where the transfer took place more than five years before this section comes into operation the current owner of the transferred housing shall consult the current tenants on their satisfaction with the management of that property.
(3) Where the transfer took place less than five years after this section comes into operation the current owner of the transferred housing shall not more than every five years consult the current tenants on their satisfaction with the management of that property.
(4) If more than 50% of tenants responding to the consultation under subsections (2) or (3) are dissatisfied with the management of the property, the owner of the housing must carry out a competitive tender for the management of the property and report the outcome to the tenants.”—(Dr Blackman-Woods.)
Brought up, and read the First time.
Brandon Lewis
The office-to-residential policy has been successful in achieving what it was intended to do. It has helped to simplify the planning process to encourage more development on brownfield land and to deliver additional new homes, including in London, where housing need is particularly acute. I should also make it clear that it has helped to reduce the pressure to build on brownfield land. The data show that we have seen a 65% increase in the number of new homes created through change of use. Furthermore, since April 2014, nearly 4,000 permissions have been granted under permitted development rights for office-to-residential conversion, showing that it is delivering much-needed homes for Londoners.
To continue to boost the supply of housing, we have announced that we will make the permitted development right permanent. However, we also understand the need to protect the vitality of key economic areas. The current exemption areas, including the City of London and the central activity zone, will be extended until 30 May 2019 to allow time for those authorities to consider whether it is necessary to make an article 4 direction to remove the right. As I set out in my response to new clauses 19 and 20 on Tuesday, the article 4 process is straightforward. Local authorities, including a number of London boroughs, as my hon. Friend the Member for Croydon South outlined, have already used that process. I think the new clause is unnecessary, and I invite the hon. Member for Harrow West to withdraw it.
Mr Thomas
Even though the Minister has gone back to his Mr Grumpy mood, with some reluctance I have decided not to seek to divide the Committee on this new clause. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 37
Removal of limit on debt where an authority has a housing revenue account
The Localism Act 2011 is amended as follows.
Leave out section 171 (Limits on indebtedness).”—(Mr Gareth Thomas.)
This new Clause would remove the Secretary of State’s power to make determinations about the housing debt that may be held by a local housing authority that keeps a Housing Revenue Account.
Brought up, and read the First time.
Brandon Lewis
I have always felt that my hon. Friend the Member for South Norfolk is, at the very least, young at heart.
The indebtedness limits were put in place as part of the self-financing settlement with local authorities back in 2012. The financial freedoms provided by the settlement were widely welcomed by local government. However, as part of that, it was necessary to place a limit on the amount of housing debt that can be held, given the potential impact on the public sector borrowing requirement.
The limits do not mean there is no flexibility for local authorities to borrow. Indeed, at the time of self-financing, there was borrowing headroom of about £2.8 billion. That figure has increased as local authorities have reduced their debt levels. At the end of 2014-15, the headroom had increased to almost £3.4 billion. We were aware that the headroom was not evenly spread and that some councils needed additional borrowing headroom to build more homes, which is why we made available £221 million of extra borrowing headroom to 36 councils in England, to support thousands of new affordable homes in 2015-16 and 2016-17.
Much as I support the hon. Member for Harrow West on seeing more homes built, I cannot agree to the unrestricted increase of housing debt that would result from the amendment, given the implications for the public sector borrowing requirement, so I urge him to withdraw his new clause.
Mr Thomas
The Minister worries unnecessarily, given the comments put to us in the Lyons review. Nevertheless, I do not intend at this point to seek a Division, and I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 38
Extension of Help to Buy schemes to tenants receiving support for the voluntary right to buy
‘(1) This section applies to a tenant purchasing a dwelling-house in respect of which the Secretary of State makes a grant to a private registered provider in respect of a right to buy discount provided at section 56.
(2) The tenant shall be entitled to the same support provided under a help to buy scheme supported or underwritten by the Government as a tenant exercising right to buy of a dwelling- house from a local authority.”—(Mr Gareth Thomas.)
This new clause would extend the Government’s Help to Buy schemes to those exercising the right to buy under the voluntary scheme supported by Government grants, to put housing association purchasers in the same position as those buying their homes under right to buy from local authorities.
Brought up, and read the First time.
Mr Thomas
I beg to move, That the clause be read a Second time.
I tabled the new clause in a spirit of wanting to finally flush the Minister out on why he was so opposed to the proposal from the Mayor of London and, indeed, the noble Lord Kerslake about the potential for equity loans—an extension of the Government’s Help to Buy scheme—to help pay for the sale of council homes.
It is worth referencing the huge waiting lists that many councils have and the large number of people in temporary accommodation and bed and breakfasts, which represents a huge cost for council tax payers. It is also worth mentioning that last year, for every 11 council homes sold off, just one new property was built.
The proposal from the Mayor of London and the noble Lord Kerslake might be a potential solution that obviates the need to sell off council housing in particular areas—notably in central London, where it will be very difficult to replace—while allowing the Government to move forward with their agenda of offering housing association tenants the right to buy their flat. If the only motivation for including the forced sale of council homes is to pay for the cost of the discounts that housing association tenants will get through the right to buy, the option of extending the Government’s own Help to Buy scheme to housing association tenants might provide a genuinely new route to avoid the sale of council homes, and, as a result, exacerbate the housing crisis in London. In that spirit, I move this new clause.
Brandon Lewis
I appreciate the intent behind the new clause, and I welcome the hon. Gentleman’s conversion and support for our home ownership policies. However, I can assure him that it is completely unnecessary to put his new clause in the Bill, despite Labour building only one home for every 170 that were sold under right to buy. Our new revitalised right-to-buy scheme is delivering one for one, and is reaching two for one in London. We want to support people who work hard and save up for the deposit to buy their own home. That is why there is nothing to prevent the Help to Buy individual savings account being used with other Government schemes, helping people to achieve their home ownership aspirations. I encourage people to look at that, including the voluntary right to buy.
The Help to Buy equity loan scheme can only be used for new build properties, so would not apply to either local authority or housing association tenants looking to buy their own home. I hope the hon. Gentleman will agree to withdraw his new clause.
Mr Thomas
I am a bit disappointed that the Minister did not say he had at least discussed with the Treasury the possibility of extending the scheme to cover housing association tenants. I can see no reason why not. Nevertheless, I am not at this point of a mind to press the new clause to a Division, but perhaps it is a good time to commend you, Mr Gray, for your chairmanship.
Housing and Planning Bill (Fourteenth sitting)
Debate between Gareth Thomas and Brandon Lewis(8 years, 11 months ago)
Public Bill CommitteesRead Full debate Read Hansard Text
Mr Thomas
Very briefly, and following up the hon. Gentleman’s request for more information, I wish to talk about the planned development on the College Road site in Harrow West, which may or may not be covered by the amendment. The proposed development is in the centre of the shopping area in my constituency, so it is well known to most of my constituents. Many of them will be concerned about its height—potentially 20-plus storeys high, it might block out the iconic St Mary’s church in Harrow on the Hill. If there was some way in which residents, or the inspector on behalf of residents, could intervene to express a view on the height, the other parts of the proposed development at ground level, which will refresh and improve a part of Harrow town centre that has been blighted by lack of development for some time, would be popular. It is the height that worries residents. If the hon. Gentleman’s proposal for Wimbledon were to allow an inspector to vary something like the height of a development, I am sure his amendment would be of considerable interest to my constituents. I, too, look to the Minister with great interest to see whether his hon. Friend has managed to persuade him.
The Minister for Housing and Planning (Brandon Lewis)
It is a pleasure to serve under your chairmanship in these last sittings of the Committee, Mr Gray.
Local planning authorities have the ability to issue planning permission for part of a development by way of conditions. The use of conditions in this way is restricted in case law so that what is granted permission by the local authority does not fundamentally differ from what the applicant applied for and the scheme consulted on. Best practice is only to grant permission in part with the agreement of the applicant, because to do otherwise can have a substantial impact on the wider viability of a development. The proposed amendment would remove those restrictions and allow local authorities to grant permission for something substantially different from the scheme that was applied for.
I have not had a chance to look at the amendment in much detail or to explore the potential impact, but accepting it would have a number of unintended consequences. They could include depriving the public of the opportunity to be consulted and to comment on an application that is different from the one that was actually applied for. That has serious implications. There may also be a risk of not complying with the requirements of regulations made in 2011 under the Town and Country Planning Act 1990 if the development is significantly different from that applied for and consulted on.
None the less, my hon. Friend raises an interesting question about the way these permissions in part can be and are used to get developments going where they are consensual and agreed, although it may take longer to work through issues relating to other parts of the development on a larger scale. If he will bear with me, I would like to consider this further and come back to him, perhaps outside the Bill. The question has been raised and is due wider consideration and consultation with the sector. For those reasons, I hope my hon. Friend will be able to withdraw the amendment.
Housing and Planning Bill (Fifteenth sitting)
Debate between Gareth Thomas and Brandon Lewis(8 years, 11 months ago)
Public Bill CommitteesRead Full debate Read Hansard Text
Helen Hayes (Dulwich and West Norwood) (Lab)
I will be brief. I want simply to point out that one of the key problems with the Government’s extension of the permitted development rights is that they allow change to happen without consideration of local economic impacts.
We know that the cumulative loss of employment space as a consequence of permitted developments rights is a significant concern across London. We also know that there are no safeguards on the quality or the suitability of development. That is illustrated by the potential loss of music venues, which play an important cultural and community role in the locations in which they are situated. This is yet another example of the ways in which the Government are seeking to achieve short-term progress at the expense of longer-term outcomes and the quality and character of our neighbourhoods. I therefore very much support the new clauses.
The Minister for Housing and Planning (Brandon Lewis)
The aim of new clauses 19 and 20 is effectively twofold: first, to ensure that, where planning permission is granted for change of use to a residential use, the new residents’ amenity is protected; and secondly, to require that the cost of any mitigation measures needed to protect residents’ amenity, particularly against noise generated, is borne by the developer. I believe that the new clauses are unnecessary. They will impose inflexible requirements on local authorities and others where there are already appropriate protections to address these issues. One of my hon. Friends made that point this morning in our extensive debate.
In fact, the national planning policy framework itself incorporates the agent of change principle. It makes clear that businesses that want to develop should not have unreasonable restrictions put on them because of nearby changes to land use. Our thriving city centres are successful because they contain a vibrant and diverse mix of uses. It is therefore inevitable that modern city centre living will be co-located alongside other commercial and, as we heard, leisure uses. That is what makes our cities such dynamic places to live, work and, indeed, play.
In the case of planning permission granted by local planning authorities, they must decide the applications in accordance with the local plan unless material considerations indicate otherwise. Consideration of amenity impacts such as noise and disturbance is already a well established part of decision making, and the NPPF is a material consideration. National planning policy already establishes the principle that local authorities should approve applications for change of use from commercial to residential where there is an identified need for additional housing in that area—one thing that I hope we all agree on is the need for extra housing.
The framework also includes strong protections against pollution. It makes it clear that the planning system should prevent new and existing development from being adversely affected by unacceptable levels of pollution, including noise. The effects, including cumulative effects of pollution on health, the natural environment or general amenity, and the potential sensitivity of the area or proposed development to adverse effects from pollution, should be taken into account. In addition, planning decisions should aim to avoid noise which gives rise to significant adverse impacts on health and quality of life as a result of new development.
The framework goes further by making it clear that existing businesses that want to develop in continuance of their business should not have unreasonable restrictions put on them because of changes in nearby land use since they were established. The planning guidance supporting the framework is clear that the potential effect of the location of a new residential development close to an existing business that gives rise to noise should be carefully considered. The guidance underlines planning’s contribution to avoiding future complaints and risks to local businesses from resulting enforcement action. To avoid such situations, local councils are encouraged to consider appropriate mitigation, including designing the new development to reduce the impact of noise in the local environment and optimising the sound insulation provided by the building envelope.
I am keen to look further at this matter. I have been working with my hon. Friend the Minister for Culture and the Digital Economy, who is arranging for me to sit down and meet some of the music organisations that were mentioned this morning. If a business is working and a nearby building converts to residential housing, that is a good thing; we want more housing. It would be entirely wrong of the people who moved into the residential housing to complain about the business that existed before the residential housing was there. When I was the Minister with responsibility for pubs, I came across examples of residents who complained about a pub that had been there for 150 years two weeks after moving in next door. We need to ensure that those businesses are protected.
In December 2014, we made amendments to the planning guidance to underline planning’s contribution to protecting music venues, but I am interested in looking further at that issue. As I said, my hon. Friend the Minister for Culture and the Digital Economy has arranged for me to meet with those organisations shortly.
Mr Thomas
The Minister has virtually answered my question. I was going to ask whether he would meet with a delegation, and he has said that he will. Will he commit telling us before Report stage whether he is minded to do anything else in planning law to help the music industry, which is worried about the future of some venues?
Brandon Lewis
The hon. Gentleman is right that I will meet with those organisations. My hon. Friend the Minister for Culture and the Digital Economy, who has responsibility for the creative arts, has arranged for me to sit down and meet with them. If we were to do anything in the Bill, I would make Members aware of that before Report stage. The new clauses are not needed because the planning powers are already there; we just have to make sure they are properly used, but I will talk to the industry about that before we go forward.
With that caveat, the approach set out in the Bill provides flexibility and enables local planning authorities to protect new residents’ amenity, particularly from the impact of noise, while ensuring that we protect established businesses from disruption to their operations. Local authorities, when they look at such situations and organisations, look at what is said in this House. The debate we have had today will very much inform their decisions.
On new clause 20, permitted development rights for change of use play an important role in the planning system. They provide flexibility, reduce bureaucracy and allow the best use to be made of existing buildings. In 2014-15, they provided 8,000 much needed new homes, particularly in our capital city. In introducing permitted development rights, the Secretary of State can make provision for local authorities to approve measures relating to the impact on local amenity, including from noise, where development is permitted for a change of use.
The hon. Member for City of Durham touched on the article 4 situation. I gently say to her that she should challenge local authorities that say it is difficult to use, because there is no evidence to back that up claim. The article 4 process is straightforward and simple. Local authorities should look at other authorities that have used it so they can use it appropriately and correctly. More broadly, if there are genuine concerns about the impact of permitted development rights on new residents’ amenity, including noise impacts, local councils have the ability to bring forward an article 4 direction. Article 4, in and of itself, does not prevent development; it requires the planning application to be considered before a building can be converted. It is an immensely powerful tool for local authorities to use. They just need to ensure they are using it appropriately and in a focused way.
The licensing process also provides an adjudication mechanism between local residents and licensed premises by which practical measures can be introduced to control and mitigate noise. Statutory guidance advises that licensing authorities should be aware of the need to avoid inappropriate or disproportionate measures that could deter events that are valuable to the community. We can all think of events in our own constituencies, such as live music, that bring the community together and are a valuable source of community spirit. I do not consider the new clauses necessary and I invite the hon. Lady to withdraw them.
Brandon Lewis
I wholeheartedly agree that, where statutory delivery vehicles such as urban development corporations or new town development corporations are created, high-quality, sustainable place making should be absolutely at the heart of what they do. As we are having a clause stand part debate, let me pick up on the question raised by my hon. Friend the Member for Peterborough, who made a very good point about the inflammatory nature of some of the remarks of the TCPA. They were not only inflammatory, but ill-advised, and they discredited that organisation. I do not intend to give it the credibility of commenting on the remarks any further.
The hon. Member for City of Durham and I worked together in the previous Parliament, cross party, to get the urban development corporations set up. I thanked her colleagues at the time—the right hon. Member for Leeds Central (Hilary Benn) and the hon. Member for Wolverhampton North East (Emma Reynolds)—for their work in taking that forward and for showing how we can work together. We all want Ebbsfleet to develop appropriately. The establishment of the Ebbsfleet development corporation highlighted that the process itself needed updating, especially in the light of the more familiar practice of consultation. At the time, I said to our friends in the other place that we would come forward with this legislation as soon as we could to rectify the situation. That is where we are coming from.
In a more general sense in response to some of the comments we have heard this afternoon, while agreeing with the ethos of wanting high-quality development and communities to be delivered, we can see the difference between where the Opposition and the Government stand. For example, because of the way in which the proposal is drafted, it could slow down development in and of itself, as well as not providing good-quality outcomes. That is because it so focused on a process of having to tick the boxes for A, B, C, D, E, F, G and H in order to qualify. We will find developers ticking those boxes rather than looking at what the right outcome is and working with the local community. I have some understanding of and sympathy with Opposition Members, who are very determined to ensure that they are planning well for people. The difference between us is that I believe that planning should be done by local people for local people and that it should not be done to them. We have to be very clear that we trust local people. I will comment on that in a moment.
Brandon Lewis
I suggest that the hon. Gentleman reads the national planning policy framework. It is only 50 pages long, and I am sure that it will entertain him this evening. I suggest that he looks at how local plans work, how neighbourhood plans work, and at consultation more generally. Even the corporations will come from local areas. On garden cities, towns and settlements and new settlements more generally, I am very keen, as are the Government, to work with various developers, but they will come from the area. There will not be the top-down, failed approach of the past.
Sustainable development in itself is hardwired into the planning system. It is absolutely central to the national planning policy framework, and rightly so. The framework provides a clear view of what sustainable development means in practice. It is explicit that the purpose of the planning system is to contribute to achieving sustainable development, and that three pillars are key: the environment, society and the economy. They are mutually dependent and cannot and should not be pursued in isolation. We do not need a separate, statutory, tick-box requirement around sustainable development that applies only in a case where an urban development corporation or new town development corporation has been created. It would be quite unhelpful and distorting to have a separate definition of sustainable development outlined that applies only to them.
Nor do I think that we should limit local flexibility. Where local areas decide that an urban development corporation or new town development corporation is the best way to deliver regeneration or, indeed, a new town or settlement, rather than ticking their way through that long list of objectives, they should have the freedom to create strong, sustainable communities in a way that best reflects their local circumstances. It is they who best know their local needs, not us sitting here in Whitehall.
Great place making in and of itself is secured not through detailed central prescription, but through good, strong, clear and transparent local leadership. That applies whether or not the development is led by an urban development corporation, such as in Ebbsfleet. A master plan has been worked through for Ebbsfleet that makes it very clear that the ambition is to see the development of garden city principles. I saw that just yesterday when I went to announce the new Didcot garden town development, which is looking for innovation as well as good-quality development.
We see that where settlements are being developed in areas right around our country, from Northamptonshire right the way through to the south-west and Hampshire. Indeed, we only have to look at the well known example of north-west Bicester, where 6,000-odd high-quality homes are being developed to zero-carbon standards. That is being done without central prescription, highlighting that local areas can be trusted to do the right thing and get the right quality for their local community. The local authority itself or the local development corporation when it is set up can deliver that, and should be empowered to do so without those strictures being put on them by central Government. I hope that that provides the hon. Lady with sufficient confidence to withdraw her amendment.
Housing and Planning Bill (Thirteenth sitting)
Debate between Gareth Thomas and Brandon Lewis(8 years, 11 months ago)
Public Bill CommitteesRead Full debate Read Hansard Text
Mr Thomas
I am extremely grateful for your assistance, Mr Gray. In the spirit of moving swiftly through the passage of the legislation, I take the opportunity to move the amendment formally.
Amendment proposed: 199, in clause 74, page 30, line 4, at beginning insert “Subject to subsection 1(A)”.—(Mr Thomas.)
See amendment 200.
The Minister for Housing and Planning (Brandon Lewis)
I appreciate the ethos and the manner with which the hon. Gentleman has moved the amendment. It is one of the most succinct, direct and brilliant speeches that he has made in the past few weeks, and the first one that I have been almost tempted to agree with. Before we get to that point, however, I must say, on the amendment, that communities can already use neighbourhood planning to allocate land for housing development, including land put forward by housing co-operatives, which I know he champions, and has done consistently and superbly throughout this Committee. We all support housing co-operatives.
Mr Thomas
I am grateful to the Minister for the positive attitude with which he has clearly considered my amendment. It was certainly tabled before we had the opportunity for the helpful debate on housing co-ops and the applicability of the self-build and custom build provisions. There was a slight caveat in his willingness to recognise that housing co-ops are potential examples of self-building and custom house building. I say gently to him that some further clarity, perhaps by way of guidance to the parent bodies of the UK co-op housing movement, might be helpful by indicating what types of housing co-operative are covered in what circumstances by the self-build and custom build provisions.
Brandon Lewis
In the spirit of helpfulness, the hon. Gentleman makes a fair point, and I will consider how we can do something positive in that way.
Mr Thomas
That is the Christmas spirit kicking in, and I am grateful to the Minister for it. There is a parent body for the housing co-op movement. If he is willing to suggest to the relevant official in his Department that they communicate with that organisation, that would be additionally helpful.
I am grateful to both Ministers for the spirit with which they have engaged with the potential difficulties facing housing co-ops in the legislation, and particularly to the Under-Secretary of State on the concerns about pay to stay, which genuinely put at risk some of the smaller housing co-ops due to the administrative burdens involved. In the spirit in which the Minister has responded, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Housing and Planning Bill (Tenth sitting)
Debate between Gareth Thomas and Brandon Lewis(8 years, 11 months ago)
Public Bill CommitteesRead Full debate Read Hansard Text
The Minister for Housing and Planning (Brandon Lewis)
I thought I would try and help the hon. Lady. I do not know whether she has tried picking up the phone and speaking to any of the chief executives, as I have, but it is quite easy to speak to them. I am sure that they will be happy to talk her through their excitement in being allowed to offer ownership to a whole new group of people.
Mr Thomas
On a point of order, Sir Alan. After the Minister’s very generous offer to my hon. Friend, would it not be possible to arrange an extra session, to which the Minister might invite the five chief executives to present evidence to the whole Committee, so that we do not have to put in separate phone calls? We could hear directly from the housing associations. Perhaps we could extend the Committee by a day in order to allow that to happen—just a thought, Sir Alan.
Brandon Lewis
The deal was signed and, as I understand from the comments of David Orr, all the housing associations that took part in that vote understood that it was a deal for the entire sector. Some 96% of stock is now signed up, and of those that did not have time to sign up or did not otherwise sign up, there is a fair proportion of that 4% that benefit from the right to buy for the transfer of stock anyway. It would be an extraordinarily controlling move if we were to include in the Bill restrictions on housing association decision-making powers, especially as we have worked closely with housing associations to reach a voluntary agreement in the first place, particularly in the light of recent decisions by the Office for National Statistics.
Brandon Lewis
My hon. Friend outlines something that is coming in across the housing association sector. I have spoken to chief executives and others who work in the sector, and they want to introduce new and innovative ideas to deliver more housing and give their tenants a stairway into ownership. Saffron is a really good example of an innovative association. Clearly, as we heard earlier, Opposition Members are not speaking to housing associations much at the moment and are missing out on some of the exciting things associations are talking about and want to do.
Housing associations are professional organisations that operate according to sound commercial and social principles, and we should let them get on with delivering the part of the bargain that they have proposed and which we have accepted. I therefore hope that the hon. Member for Harrow West will withdraw the amendment.
Mr Thomas
I am grateful to the Minister for his comments. I very much enjoyed the contribution of the hon. Member for Thirsk and Malton, and I now feel torn. Should I continue to champion the career of the hon. Member for Peterborough? Perhaps the hon. Member for Thirsk and Malton is a better hope. I will see what the Committee decides. I do not want to break my commitment to the hon. Member for Peterborough, but the hon. Member for Thirsk and Malton made a case that was at least compelling enough for me to champion him and help him out.
The Minister’s central charge against the Opposition was that we are seeking in some way to prevent people who aspire to own their own home from doing so. That is simply not the case; indeed, I suspect the Minister feels some shame about the fact that home ownership has declined proportionately during the Conservative party’s period in government, and I recognise his desperate need to cover that up.
Brandon Lewis
Would the hon. Gentleman still endorse the view of the shadow Housing Minister, who said it is a good thing that home ownership has fallen since 2005, and recognised what the Government are doing through starter homes and Help to Buy to rebuild home ownership after the mess that Labour left?
Mr Thomas
I suspect that my right hon. Friend the Member for Wentworth and Dearne (John Healey) would not have used at least the last part of the phrasing that the Minister used. I join the Minister in praising my right hon. Friend for setting up an inquiry into the reasons for the decline in home ownership and into what we can do about it. I also pay tribute to Peter Redfern, the chief executive officer of Taylor Wimpey, who is leading that inquiry. That follows on from the Lyons review, which was set up by the then shadow Chancellor, Ed Balls, which looked at how we can accelerate progress on home ownership. There is no lack of enthusiasm among Opposition Members for helping people who want to buy their own home. Our point is simply that we need to look at the interests of everyone who needs a place to live—potentially a place to rent while they seek to achieve their dream of a place to own.
It is for that reason that we have raised a number of concerns about the extension of the right to buy and particularly the forced sale of council homes, which we will come on to. We are concerned that that will lead to a reduction in the number of homes available to those on low and middle incomes who cannot immediately afford to buy a property.
I gently say to the Minister, as I said in an intervention on the hon. Member for Thirsk and Malton, that Shelter has been very clear about the Government’s failure to build like-for-like replacements. Only one in nine of properties sold under the right to buy has been replaced.
Brandon Lewis
If the hon. Gentleman looks at the actual figures outlined at the Dispatch Box by my right hon. Friend the Secretary of State and by me, he will see that Shelter’s representation of those figures is, bluntly, wrong. The councils delivering right-to-buy rebuilds are delivering those extra homes one for one at the moment, and in fact in London it is closer to two for one. That is in Hansard.
Mr Thomas
I was going to suggest that the Minister, if he has not already done so, might like to read what I am told is an excellent book by the hon. Member for South Norfolk. It is called “Conundrum: Why every government gets things wrong and what we can do about it”. Life is too short, sadly, for me to read it, but I gently suggest to the Minister that he might seek inspiration and understanding of why one should seek outside sources to validate or at least challenge the assumptions that one has come to oneself or that one’s civil servants have encouraged one as a Minister to come to. I gently say to the Minister that Opposition Members, in the amendments that we have tabled, are seeking only to do what the late Margaret Thatcher did with the Housing Act 1985. Even she conceded that there was a need for exceptions to the right to buy, and they were included in legislation, not least in the 1985 Act, as I have set out. It seems to us entirely sensible to put in the Bill similar provisions on exceptions to the right to buy. We would be helping housing associations and, indeed, helping the Government in legislative terms by making clear where housing associations stand.
Housing and Planning Bill (Eleventh sitting)
Debate between Gareth Thomas and Brandon Lewis(8 years, 11 months ago)
Public Bill CommitteesRead Full debate Read Hansard Text
Mr Thomas
I would like to use this stand part debate to ask the Minister a number of questions, both general and specific. First, will he consider what will happen to the grant to housing associations in London if they are unable to provide evidence of a start on site within the three-year deadline to replace a home? Will any of that returned grant be directed to house building in the local authority area in some other way—perhaps given to the council or to another housing association?
What estimates have Ministers made of the number of portable discounts that are likely to have to be offered in London? That will affect the number of grants that will have to be made as well. It would be useful to hear from the Minister on that question. I return to the specific example I gave of a housing association that operates in a number of areas across the country. I bring to the Minister’s attention the example of Home Group, which has helped drive the refurbishment of the Rayners Lane estate in my constituency. It will of course be covered by the voluntary right to buy. If it is given grant, what provision is there that the Home Group might offer new properties in Harrow, as opposed to Newcastle or other parts of the north or the south-east where it has properties? What specific efforts are the Government making to ensure that, if there is not like for like, as we discussed on clause 56, there will at least be another property available in the Harrow area to replace one that might be sold off to a tenant?
On the financing of these grants, the Minister will be aware that there has been a debate within the housing world about whether there are alternative financing mechanisms for these grants, instead of just the option in the Bill of the forced sale of high-value council housing. Lord Kerslake and the hon. Member for Uxbridge and South Ruislip (Boris Johnson), the Mayor of London, have suggested that the Chancellor of the Exchequer might want to replace the cash discount that sales are offering with an equity loan, as the Chancellor is doing already. It would be good to hear whether Ministers have completely rejected that notion, or indeed the conversations they have had with Lord Kerslake and the hon. Member for Uxbridge and South Ruislip.
Finally, the Minister may be aware that the National Housing Federation recently sent around a briefing that clearly indicates that it is concerned that the drafting of this and the previous clause does not fit the terms of the deal that has been done within the Government. I invite him to consider the National Housing Federation’s request for a change in the language in clause 57—not now, of course, but, if he is willing to reflect on it, on Report.
Brandon Lewis
I will stick to the point behind the clause. With regard to some of the wider points that the hon. Gentleman has raised, I direct him to chapter 2 of the voluntary agreement with the National Housing Federation, which covers this fully. Clause 57 reflects the grant-making powers just discussed under clause 56, but specifically for the Greater London Authority. It is worth briefly explaining that this is because we want to ensure that the Government have the ability to compensate housing associations for the discounts to their tenants who buy their home in London under the terms of the voluntary agreement. It will allow the Greater London Authority to administer the process and make the payments. The clause is necessary because the Homes and Communities Agency does not have the locus to make payments in relation to housing association properties sold in London. I am confident that the National Housing Federation is happy that we will be fulfilling our side of the bargain, but we will continue our ongoing dialogue with it at all times.
Question put and agreed to.
Clause 57 accordingly ordered to stand part of the Bill.
Clause 58
Monitoring
Mr Thomas
I beg to move amendment 188, in clause 58, page 24, line 22, at end insert
“which will include the use of local occupancy clauses as defined by section 157 of the 1985 Housing Act”.
This amendment would ensure anyone subsequently buying a former housing association property sold under the right to buy would have to have lived or worked in the housing authority area where the property is located for three years or more prior to purchase.
I suggest that Ministers might want to look back at section 157 of the Housing Act 1985 and extend the use of local occupancy clauses in rural areas under the council right-to-buy scheme to the housing association right-to-buy scheme and, in so doing, extend it to the whole country. The Minister might or might not be aware that under the terms of section 157, people have to have lived or worked in an area, usually in a national park, for three years before they can buy certain properties, usually ex-council homes. The effect of that requirement is to lower slightly the price at which homes are sold. Typically, although it depends on the area in the national park, a reduction of between 5% and 20% can be on offer to someone who has lived or worked in an area. That clearly increases the chances of people being able to stay within their communities and achieve their aspiration of owning their own home.
Given the scale at which house prices are rising, such a sensible situation for rural areas, particularly national parks, might usefully be extended to London. With this probing amendment, I am asking the Minister whether he has considered offering a similar provision in the Bill. If he has not, will he do so? Specifically, might he consider it for an area such as London, or other urban areas where house prices are rising fast? I gently suggest that this would not affect his overall objective of extending home ownership, and it would not stop the extension of right to buy; it would effectively create a sub-market within the housing market and make it slightly more affordable for a small number of additional people to get on to the housing ladder. He will understand the concern. Given the public nature of our debates, I recognise that he had to robustly defend the price of starter homes, but I am sure he will recognise the concern that they will not be affordable, particularly in London, to as many people as they might be.
Local occupancy clauses would help extend the ability of more tenants, once a housing association property has been sold for the first time, to have a chance of getting on to the property ladder by buying a former housing association property, albeit at a slightly discounted rate.
Brandon Lewis
On the hon. Gentleman’s closing remarks and his point about starter homes, I remind him that both in evidence and here in Committee, although perhaps he was not here, we made it very clear—this is about a robust defence—that the average price for a first-time buyer, the group of people who will benefit from starter homes, is considerably below the average price for a home in London and more widely. We had a range of examples, but I will not test the Chair’s patience by going through them again.
We appreciate that various measures are in place under the existing right to buy, such as properties, if sold within a certain period, being offered back to the landlord they were originally bought from. We are working closely with the sector on the detailed implementation of the scheme, including such issues. I appreciate the spirit with which the hon. Gentleman moved the amendment, but it would mean that homeowners who had bought their property under a voluntary right-to-buy arrangement will be restricted with regard to whom they can sell their property. It would make it a requirement that they can only sell on to someone who has lived or worked locally for three or more years before purchase.
Mr Thomas
I appreciate how the Minister is indulging the spirit in which I moved the amendment. May I gently suggest that the policing for a local occupancy clause already exists, in a sense, because it already applies in rural areas and, in particular, in national parks? Few national park authorities report any significant problems with the measure at the moment. Might that not encourage him to take a slightly more positive view of my suggestion?
Brandon Lewis
I appreciate the point that the hon. Gentleman is making, but we are talking about a somewhat different scale from what the amendment would introduce. Tenants who become homeowners as a result of the right to buy are exactly the same as tenants who buy on the open market; the difference is the concern about the loss of stock, which is clearly being addressed anyway through the programme to build new homes, delivering a new-build property for every property sold. Moreover, protections will be in place through housing associations having the discretion not to sell properties, particularly in rural areas—the example he gave—where to do so would not be in the interests of the local community, as the voluntary deal outlines. I hope that he will feel able to withdraw the amendment.
Mr Thomas
I moved the amendment in the spirit of probing the Minister’s view. I gently suggest that any restriction on a housing association tenant selling might slightly restrict the market, but in practice I suspect that it will not do so dramatically. Potentially, the amendment would have allowed not only housing association tenants to access the ambition of owning their own home, but the Government and the whole House to ensure that those who live in communities not on high incomes had a little more chance of getting on to the property ladder. However, it was probing, and on that basis I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Mr Thomas
I hope not to detain the Committee long, because we had a debate last week on co-operative housing in the context of the clauses relating to custom and self-build housebuilding. I drew the Committee’s attention to the definition of “community-led housing”, which is encapsulated in new schedule 1. Amendment 92 would specifically require the regulator of social housing to protect housing co-operatives and other community-led housing. It would be a gentle additional requirement in the legislation to ensure that, notwithstanding the voluntary deal offered, housing co-operatives are given a little extra protection.
I alluded to this previously, but it is perhaps worth setting out in a little more detail. I think in particular of the housing co-operatives in the Coin Street area on the south bank of the river Thames. They are all registered housing providers, so technically they are all housing associations, but all their properties are part of a housing co-operative. It would therefore be very difficult for a housing association that is also a housing co-operative to offer a portable discount. Under the terms of amendment 92, the regulator would have a duty to police the insistence that housing co-operatives are properly protected.
New clause 11 focuses on tenant management organisations. A major series of requests for a tenant management organisation that is also a housing association to allow tenants to buy their properties could threaten the viability of the tenant management organisation. Surely it should be for the tenants who are running the tenant management organisation to decide for themselves the future of their organisation. Surely it is not for Government to dictate to a body that is set up and running its own devices how it should operate in the future. It is for the tenant management organisation to make its own rules.
I hope that the Minister will recognise that the amendment offers an opportunity to offer a little more protection to housing co-operatives and specific protection to tenant management organisations. It would not place an onerous requirement on the regulator, but it would help to ensure that the National Housing Federation’s commitment is captured in the Bill, resulting in additional protection.
Brandon Lewis
If new clause 11 were accepted, housing associations could not implement the voluntary right-to-buy deal where tenant management organisations had been set up and registered with the Homes and Communities Agency. It would also prevent such organisations from accepting payments made by the Secretary of State in respect of right-to-buy discounts.
Amendment 92 would require the regulator of social housing to monitor and report where a housing association had disregarded the provisions of new clause 11 and operated the voluntary right to buy in properties where a tenant management organisation existed. The monitoring and reporting role would also apply to community-led housing providers—a new category of housing association that the amendment would introduce in an associated new schedule.
Let me be clear: tenant management organisations are not registered providers. They are management organisations, which will be subsidiaries of a registered provider. They are not and cannot be registered with the Homes and Communities Agency, because they cannot own stock and so are not landlords. No grant funding to cover the cost of the discount would be made to such organisations under the voluntary right-to-buy deal.
The landlord-tenant relationship is with the property-owning landlord—the registered provider—and the tenant would exercise their right to buy against that landlord. The amendments do not quite fit into that landscape. Tenant management organisations and other community-led organisations do play an important role in helping tenants to play an active part in the management of their homes, and often in wider community initiatives as well, but they are not part of the right-to-buy arrangements.
If there is concern about having different tenures, with social tenants and owner-occupiers being part of a tenant management organisation, I must say that there is no reason to believe that tenants and owners could not come together in that way. If, however, the intent behind the new clause is to create a loophole in the implementation of the voluntary right to buy, whereby the setting up of a tenant management organisation would in itself mean that the voluntary right to buy could not operate, that would run counter to our manifesto commitment to extend the right to buy. I am sure that that is not the hon. Gentleman’s intention.
Our aim is to ensure that social tenants can access available home ownership opportunities regardless of their landlord. It would be wholly unfair to tenants who want to take the opportunity to buy a home of their own if they were prevented from doing so merely because of the existence of a tenant management organisation. The voluntary right to buy deal contains protections that allow housing associations discretion not to sell properties that are important to their communities and clients. The changes are therefore unnecessary and, I would argue, counterproductive, so I hope that the hon. Gentleman will withdraw the amendment.
Mr Thomas
I hear the Minister’s concerns, in particular about new clause 11 on tenant management organisations. Let me reassure him: no one who is committed to good governance likes the creation of loopholes, and that is the last thing I would want to be accused of. One wants consistency and clarity in all legislation.
I intend to come back later to some of the wider concerns of the housing co-op and community housing movement about pay to stay, which is part of the reason for tabling new schedule 1. There is real concern about the additional administration requirements that housing co-ops will incur as a result of the pay-to-stay requirements. However, these were probing amendments, and I beg to ask leave to withdraw them.
Amendment, by leave, withdrawn.
Brandon Lewis
As outlined, the amendment would require the Secretary of State and the Mayor of London to publish an annual report and impact assessment that sets out how many housing association properties have been sold off and the impact of that on homelessness in London. The hon. Gentleman outlined the backdrop and, while I will not test your patience by going too far outside the Bill’s scope, Mr Gray, let me say that we have increased funding: for example, funding for the discretionary housing payment will be £800 million over the course of the Parliament, which is a 40% increase.
We are determined not to return to the bad old days when homelessness was roughly double what it is today. We recognise the importance of having a mechanism to monitor and report on the effectiveness of the voluntary agreement, so the clause will allow for the collection and publication of statistics on housing association sales and new builds under the voluntary agreement. Detailed statistics on homelessness are already collected for all authorities, including figures for the number of households accepted as homeless and the reasons for the loss of their last settled home. That will allow us to monitor any changes to the homelessness situation in Greater London and indeed elsewhere. I therefore hope that the hon. Gentleman will withdraw his amendment.
Mr Thomas
I am not wild about the Minister’s answer. I am yet to see the Government propose a significant package of measures to help those on low incomes and those who are on the temporary housing register in temporary accommodation and see no immediate sign of councils or housing associations being able to help them.
Brandon Lewis
I appreciate the hon. Gentleman’s generosity in giving way. I hope he recognises that under this Government the amount of time people spend in temporary accommodation has been reduced by at least seven months.
Mr Thomas
The experience in Harrow has been a rising number of people in need of temporary accommodation and increasing concern about its quality. It would be sensible for the Minister to focus on this issue in a little more detail than the Conservatives, and his Department under the Secretary of State’s leadership, are duly doing. I am tempted to press the amendment to a vote.
Brandon Lewis
Clause 59 amends section 133 of the Housing Act 1988 and section 174 of the Housing and Regeneration Act 2008 to allow for disposals by way of sales under the extended right to buy by private registered providers to be subject to a general consent of the regulator of social housing, as exercised under the power in section 172 of the 2008 Act. Amendments 178 and 179 are minor and technical ones, to ensure that the changes apply only to disposal of land in England, as housing policy is devolved.
Mr Thomas
Has the Minister had any conversations with the authorities in Northern Ireland, Scotland and Wales about why they might not be indulging in a similar set of proposals? I understand that in Scotland the right-to-buy period is being cancelled. Is the Minister aware of the situation in Scotland and what has led the Scottish National party to go down that road? Has he any indication about whether the Northern Ireland Assembly might follow the example of his party and his Government and introduce it over there?
Brandon Lewis
I suspect that, to an extent, I might be moving somewhat outside my remit, as these are devolved matters. I am happy to reiterate the debate that was had on the Floor of the House with Members of the Scottish National party making the case against right to buy. I made the same point to them as I made to Labour in Wales when they were looking at right to buy: I do not understand why they are so against giving tenants in their area the opportunity to become homeowners.
As I outlined on the Floor of the House, it might be that in Scotland, as in England, between 1997 and 2010 the Labour Party and the SNP did not do the job of building the extra homes they should have built, using the money from right to buy to build extra homes in the way that we are doing. They had a similar situation to Labour’s 170 homes sold for just one built. That is why it is so important that this voluntary deal is taken forward in the way that the reinvigorated right to buy has been in England, and we have at least one home built for every home sold. I encourage colleagues in the devolved nations to look at that model, going forward, rather than the previous Labour model.
Amendment 178 agreed to.
Amendment made: 179, in clause 59, page 25, line 8, after “Consent” insert
“in respect of a disposal of land in England”—(Brandon Lewis.)
This amendment limits the amendment to section 174 of the Housing and Regeneration Act 2008 to disposals of land in England.
Mr Thomas
Exactly, Mr Gray. It would be outwith the terms of the debate. I will, however, gently ask the Minister again whether any estimate has been made of the number of portable discounts that will be offered in London. Will any restrictions be placed on portable discounts? Again, that is a question worth asking. For example, do they need to be on homes in the same local area? I hope that he might be willing to answer those questions rather than fob the Committee off.
Brandon Lewis
Thank you, Mr Gray. I think Hansard will show where the hot air has been coming from for much of today.
Amendment 152 would limit the portability of discounts offered under the voluntary right to buy to cases where this was practical in terms of availability of suitable properties for sale and of the vacancy timescales. Amendment 153, just to refresh our memories, would require properties offered with a portable discount to be in an area agreed with the tenant, of a similar size and quality, and for there to be an appeal mechanism. From the comments made before we broke to vote, it was clear that the Opposition were trying to put into legislation arrangements that we have negotiated in a voluntary deal with the sector.
Hon. Members asked for details of where these things are printed. The hon. Member for City of Durham quoted from what I think she said was something sent round by the National Housing Federation. Actually, she quoted directly from the voluntary agreement that is published on the National Housing Federation website, chapter 1 of which very much outlines those points. That is backed up by a written ministerial statement made by my right hon. Friend the Secretary of State for Communities and Local Government on 12 October. Housing associations have made it clear that they agree, as part of the deal, that where a housing association exercises its discretion not to sell a home, the housing association will provide an alternative from its own stock. The rest Members can read in chapter 1.
Mr Thomas
Very specifically, on the Coin Street example I gave, where all the properties are part of the housing co-operative, will they have to give portable discount or not? I recognise that they are excluded from right to buy in general terms, but are they excluded in this context from having to offer a portable discount?
Brandon Lewis
Again, I highly recommend that the hon. Gentleman read the proposal from the National Housing Federation. It has a clear table, headed in bold, “Examples of circumstances where housing associations may exercise discretion over sales” in which co-operatives are listed.
Housing associations have agreed in the deal that there will be a proposal for an appeal mechanism where a tenant is not happy with the alternative property on offer. The hon. Member for City of Durham asked if it would be a genuinely independent process, but I am sure she was not trying to question the independence of the regulator and it is the regulator to which the voluntary agreement relates. To suggest that the housing associations will not deliver on the terms of the agreement takes us back to the problem the Opposition appear to be having with the concept that housing associations are professional organisations that we trust and that will honour their agreement with the Government. After all, it was their proposal. I do not believe that they will fail to honour the agreement, which is why I do not accept the amendments.
Brandon Lewis
As we know, amendment 186 would amend clause 62 to provide for the Mayor of London, after consultation with the London Assembly, to make a determination that would require London boroughs to make the payment of receipts raised by the sale of high-value assets to the Mayor for each financial year.
Amendment 144 would require the Secretary of State to seek the consent of the Mayor of London and the London Assembly before a determination for each local authority’s payment is sent to the local authority.
I will go through the potential impact of the amendments separately. The first would amount to a London ring fence—that is clear from what has been outlined. We have also been clear from the start that our manifesto commitment on extending right-to-buy discounts to housing association tenants will apply across England. To enable that to happen, we will need to ensure that all receipts generated from the sale of high-value assets are used across the country.
During the debate on Second Reading, I listened to a number of hon. Members who represent seats in London. Their contributions rightly stressed the importance of housing in London. The current Mayor has been focused on that, and I share his determination to deliver homes for Londoners. That is why I am working closely with my hon. Friends—for example, my hon. Friends the Members for Richmond Park and for Wimbledon—to ensure that we are able to secure a sensible approach to delivering the housing that London needs. My hon. Friend the Member for Richmond Park outlined that very clearly and passionately on Second Reading. My hon. Friends recognise the importance of our meeting the manifesto commitment, which is exactly what people elected the Government to do. I recognise the importance of working with my hon. Friends, the local authorities and indeed the LGA more widely.
That leads me to the point of the second amendment, which would give the Mayor and the Assembly the ability to block the Secretary of State from making a determination in respect of London local authorities. Effectively, it would be a right of veto over the Government’s implementation of policy that was contained in our manifesto. I have the utmost respect for the current Mayor and for my hon. Friend the Member for Richmond Park—the next Conservative Mayor of London. Let us be clear: neither of them has expressed any interest in the Mayor or the London Assembly having any such power. I can only see this as mischief-making on the part of the Opposition.
Mr Thomas
I trust that the Minister will answer the question I posed about why he is not interested in the proposal of the hon. Member for Uxbridge and South Ruislip for an extension of the Chancellor’s equity release scheme to fund the housing association sell-off, which would obviate the need for the forced sale of council homes.
Brandon Lewis
I will carry on focusing on the amendment that the hon. Gentleman has been speaking to. It would not only add an additional bureaucratic step to the process, but would mean that we want to give those bodies the ability to frustrate the Government in delivering an election mandate, which is something that I am sure the hon. Gentleman would not want to encourage anybody to do. I certainly know that my hon. Friends are not trying to do that.
As provided for in clause 62, all local authorities will be consulted on any draft determination before it is finalised, either on an individual basis or through their representative body. The details of determinations for a London local authority do not require the scrutiny of the Mayor or the London Assembly. Housing that is excluded will be set out in secondary legislation. The Department is engaging widely with local authorities and other stakeholders. Indeed, I met the leader of Harrow Council just last week along with others from across the parties. No decisions have been made yet about types of housing that could be excluded or cases when housing would not be considered as becoming vacant.
As part of our process of updating data on local authority stock, we are collecting information on the purpose of the stock held in order to understand more about the types of housing that the local authorities own. That will inform decisions on housing that will be excluded from this chapter. I welcome the thoughts of the Committee on what housing to consider excluding, and I am fully committed to finding an outcome for London that ensures that more homes are delivered. That is very much the focus of the current Mayor of London, my hon. Friend the Member for Uxbridge and South Ruislip, and, indeed, of my hon. Friend the Member for Richmond Park. I will continue to work with all parties to achieve that.
I put on the record my thanks to the GLA and the London boroughs, across parties, for their ongoing engagement with me and my Department. I recognise the importance of ensuring that London local authorities play a key part in the process, which the amendments would frustrate. I hope the hon. Gentleman withdraws the amendment.
Mr Thomas
I note that the Minister failed to deal with the issue of alternatives that would obviate the need for the forced sale of council homes. I am disappointed that he is not willing to reflect on the proposals of the hon. Member for Uxbridge and South Ruislip, of the noble Lord Kerslake or, indeed, of the Local Government Association as to how the housing association sell-off might be financed. The amendments were tabled in the spirit of the concern that every right-to-buy sale and, therefore, every sale of a council property, has not led to a like-for-like replacement. I mention again, in passing, Shelter’s figure that only one in nine properties sold under the right to buy have been replaced with a new start on site.
Brandon Lewis
I am sure the hon. Gentleman was almost waiting, knowing that I would want to intervene. I remind him again, as I did earlier, that Shelter’s figures do not give a direct relationship. Actually, the numbers in London are almost two for one, taking account of the fact that local authorities have three years to build those extra homes.
Mr Thomas
I simply look at the overall figures for the right to buy—the scale of the difference between the number of right-to-buy sales since 2012-13, and the number of starts on site and acquisitions. There is a huge gap between those figures. If the Government were to achieve their current ambition of a one-for-one replacement, there would need to be some 22,000 starts or acquisitions by the end of 2017 to match the sale of council homes since 2012-13. That is equivalent to 2,300 per quarter. In the first quarter of 2015-16, there were just 307 starts, which suggests that we are some way from achieving even the Government’s target of one-for-one replacement. With that scepticism in mind, I cannot, sadly, accept the Minister’s assurances on this occasion, and I intend to urge the Committee to support my amendment.
Housing and Planning Bill (Eighth sitting)
Debate between Gareth Thomas and Brandon Lewis(8 years, 12 months ago)
Public Bill CommitteesRead Full debate Read Hansard Text
The Minister for Housing and Planning (Brandon Lewis)
Further to that point of order, Sir Alan. To be helpful to the Committee, I suggest that the hon. Member for Harrow West looks at the National Housing Federation website, where the deal is published in full.
Clause 48, as amended, ordered to stand part of the Bill.
Clause 49
Recovering abandoned premises
Teresa Pearce (Erith and Thamesmead) (Lab)
I beg to move amendment 110, in clause 49, page 22, line 10, at end insert—
“(e) the local housing authority responds to a request by the landlord confirming that they suspect the property to be abandoned.”
This amendment would require the local housing authority to confirm that they also suspect that the property is abandoned before a landlord can recover the abandoned premises.
Part 3 of the Bill makes provision for private landlords to recover abandoned premises. We appreciate the need for some landlords to recover abandoned premises, but the proposed measures give landlords dangerous powers to evict tenants with speed and ease.
Tenancies are formal legal agreements and the Bill will give landlords the power to repossess homes from tenants without going through a court process. The turnover period for recovering abandoned premises is too short and the Bill does not provide safeguards for genuine cases of someone legitimately being away from the property, such as for a long holiday, a stay in hospital or a short period of working away.
The proposed measures will lead to further pressure on our already stretched social housing and local authority housing departments as evicted tenants turn to their local authorities after eviction. At the moment there is a timetable and a process for a local authority to help people avoid homelessness by trying to get them into another property, but the process in the Bill is too speedy and people will literally be turning up at the housing department having just been given a second letter.
As drafted, the measures go against the spirit of the Bill that we debated in our scrutiny on Tuesday, namely to crack down on rogue and criminal landlords with banning orders, the database and the fines and to drive up standards throughout the private rented sector. Instead, as they stand, the provisions create a way for some landlords to evict without recourse to the courts and with ease and speed.
Part 3 gives the impression of being put together at the last minute, without thought for the impact on existing legislation. In fact, the impact assessment, on page 43, indicates that the Government are unsure about how big the problem being dealt with even is, so we are concerned about the inclusion of the measure in the Bill. We are not alone in expressing concern.
Shelter and Crisis, two of the leading charities in the sector, released special briefings on those clauses in part 3, strongly opposing them and recommending that they be removed from the Bill completely. They were particularly concerned that vulnerable tenants could be unintentionally evicted, that tenants will be unable to challenge eviction effectively and that there is insufficient evidence that abandonment is a real problem. They also said that there is existing legal provision to deal with genuine cases of abandonment. In addition, they believe that by undermining the role of the courts in the eviction process, the changes will put more tenants at risk of homelessness.
Many representations made to the Committee in written and oral evidence noted concern about the proposals. In written evidence, Crisis highlighted:
“The Bill creates a new ‘fast-track’ eviction process for landlords to reclaim possession of a property which”
they believe
“has been abandoned”,
and that:
“There is no robust evidence to suggest that abandonment is significant or widespread”.
Crisis cited the Bill and the Government’s own impact assessment, which I just mentioned, in which landlords’ associations representing approximately 1.4 million landlords estimated that only 1% of calls to their helplines relate to abandonment. From that figure, the Government have extrapolated that only 1,750 tenancies are abandoned every year, which amounts to 0.04% of private rented households.
The Housing Law Practitioners Association also expressed concern in its written evidence, saying that the HLPA was unaware of any evidential basis suggesting the need for such a power and did not understand what was thought to be defective in existing law. Looking more closely at the legislation, the HLPA noted that the trigger rent arrears are plainly modelled on those in schedule 2 of the Housing Act 1988. If rent arrears are not paid, the landlord is already entitled to a mandatory possession order on ground 8 of the Act.
If the landlord already has a right to mandatory possession, why does he need a right to bypass the court? I would be interested to hear why the Minister believes that the clause is necessary, because it puzzles me. The HLPA also raised concerns about the reinstatement provisions, noting that if the landlord re-lets the property after recovering possession using the abandoned property route and the original tenants seek reinstatement, the court is very likely to refuse them, given that reinstatement would take effect as a concurrent tenancy but would not entitle the original tenant to resume occupation.
In addition to the written evidence, I remember clearly questioning Campbell Robb, chief executive of Shelter, in the evidence sessions. I remind the Committee of that discussion. To quote the transcript, Mr Robb mentioned
“potentially some unintended consequences of bringing”
these measures
“forward and of the lack of court oversight or local authority oversight in making sure that the proposals achieve what is wished but that they do not give a licence to some landlords to use them in a way that we would not support. I just want to put that on record.”
Mr Robb also went on to highlight the danger that,
“without that due process, certain types of landlords may use this to create evictions”
and agreed that it might
“put additional pressure on local authority housing departments by people appearing evicted without due process”.––[Official Report, Housing and Planning Public Bill Committee, 10 November 2015; c. 59, Q153-156.]
Although many have concerns about the proposals as they stand, others note that they are unnecessary. Crisis and Shelter reminded the Bill Committee in their briefing and in written evidence that there is already legal provision for cases of abandonment, in the form of the legal rule on implied surrender.
Housing and Planning Bill (Ninth sitting)
Debate between Gareth Thomas and Brandon Lewis(8 years, 12 months ago)
Public Bill CommitteesRead Full debate Read Hansard Text
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
I am very grateful to the Minister for the spirit of his response to my point of order this morning. I have been on the website and I can see information about the offer that was made to the Government in October, but no additional information appears to be there about the detail of further discussions or, specifically, of the arrangements with the five housing associations that are proceeding with the pilot. If the Minister were able to give us further information ahead of Tuesday’s sittings, that would be extremely helpful.
Brandon Lewis
Obviously we are now somewhat outside the scope of the Bill, but I am sure that there will be information over the next few months as we answer questions and make Government statements about what we are doing. The National Housing Federation and the housing associations themselves will also be publishing such information. I am pleased that, as of last night, the five pilots are in place and people may go and register for the right to buy their own home.
Mr Thomas
I rise to support my hon. Friend’s amendment and to push the Minister gently for clarity about why, as the Bill stands, someone who was subject to a banning order could not be subject to a financial penalty as well. Given the significant costs that any housing authority will incur in taking action against one or other of the 10,500 rogue landlords that the Minister estimates there to be, why should not a financial penalty be imposed to help to recover some of the costs of taking action against them?
The hon. Member for Peterborough was a particular fan of the examples of rogue landlords in a recent article in the Conservative party newspaper The Guardian. I cannot think of any reason why any of those individuals who has already been convicted of being a bad landlord and who may or may not be subject to a banning order under this legislation should not also face a financial penalty. I hope that the Minister might, on this occasion, welcome my hon. Friend’s amendment and accept it for inclusion in the Bill.
Brandon Lewis
I appreciate what the hon. Member for Erith and Thamesmead has said about the amendment being a probing one, and I hope that I can satisfy her queries. While we are still considering this part of the Bill, I want to pick up on the points made by the hon. Member for Harrow West a few moments ago about how the information is spread and the databases. I am committed to looking at what we can do about that. Obviously, we have devolution and some of those matters are devolved. An amendment would be required to the Bill, but the details could be set out in a memorandum of understanding. That is part of what we are looking at now. We all share the desire to make it as difficult as possible for anybody who is not a fit and proper person ever to be able to be in a similar position again.
Amendment 138 would make a change to clause 86 to allow a local housing authority to impose a civil penalty in addition to, rather than as an alternative to, prosecuting a landlord, as the hon. Member for Erith and Thamesmead has quite rightly outlined. My hon. Friend the Member for Peterborough talked in the last few minutes about rapacious landlords. I will take his “rapacious” and raise him this: I want to make sure that we drive out avaricious landlords, as much as rapacious ones, so that they cannot act in the market again.
We have to make sure that we get the balance right, however. The Bill provides local housing authorities with a choice about whether to go down the civil penalty route or the prosecution route, depending on the seriousness of the offence. That is a matter for them to review in the light of their local circumstances. I think it would be disproportionate to use both regimes in relation to the same conduct, especially when local authorities will also benefit from other measures in the Bill. As we have outlined over the last few days, we are keen to look at going further and making this even harder on people. For instance, local authorities can apply for a rent repayment order where rent has been paid from housing benefit or universal credit and where certain housing offences have been committed, as set out in part 2 of the Bill. That is in addition to the powers already available through the Housing Act 2004, under which magistrates can rightly impose unlimited fines for the most serious housing offences. I hope that, given that short explanation, hon. Members will agree to withdraw their amendment.
Mr Thomas
I hear the Minister’s point about the need for proportionality. It seems eminently sensible. For a first offence, one clearly would not want to impose both a financial penalty and some other form of penalty. However, for the very worst sorts of landlord, I do not see why one could not add the option of a financial penalty as well, as part of the armoury of tools available to a first-tier tribunal in dealing with a rogue landlord.
Brandon Lewis
Obviously, it depends on the seriousness of the offence. It is for local authorities to decide whether to go down the civil or criminal route. If they do the latter and use the Housing Act 2004, of course, magistrates have an unlimited ability to fine for that kind of offence. It is absolutely covered in that sense; they can impose unlimited fines. For the most serious housing offences, it is right that they should have that freedom and flexibility. I hope that hon. Members will agree to withdraw the amendment.
Housing and Planning Bill (Sixth sitting)
Debate between Gareth Thomas and Brandon Lewis
The Minister for Housing and Planning (Brandon Lewis)
It is again a pleasure to serve under your chairmanship, Sir Alan.
I will outline matters briefly, because people want to make progress today. The clause provides for a compliance direction to be issued by the Secretary of State if the local authority is failing adequately to comply with its starter homes duties and if it has a policy contained in a local development document, such as a local plan, that is incompatible with such duties.
Any compliance direction would say that the incompatible policy must not be taken into account when certain planning decisions are taken. It must set out the Secretary of State’s reasons for making the direction and must be published. A copy must be given to the local planning authority and the direction will remain in force until revoked by a further direction given by the Secretary of State, therefore ensuring that local authorities have full understanding, as well as a chance to make their case.
The compliance direction will be used only in limited circumstances. I am happy to put that on the record. It is for when the local planning authority is in breach of its starter homes duties. As outlined a number of times on Thursday, the chapter is very much about creating a new product, recognising the challenges for first-time buyers and the Government’s determination to do what we can to help them reach their aspiration to own their own homes.
The duty to promote starter homes and to grant planning permission in accordance with the starter homes requirement is a statutory requirement. If the local authority does not do that, it will be in breach of the law. The compliance direction mechanism is designed to provide a clear sanction if the duty is breached. The Secretary of State will decide whether to issue the direction based on the information in the monitoring reports that are required to be produced under clause 5.
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
I am grateful to the Minister for giving way and I apologise to my hon. Friend the Member for Erith and Thamesmead for not hearing more of her opening remarks. Will the Minister give us a sense of the type of situation in which he or the Secretary of State would feel that a compliance direction was needed? Clearly, one would be if no starter homes had been set in motion, but suppose five had been set in motion? Would that require a compliance direction? Or would the Minister expect 10 or 100 before a direction was issued?
Brandon Lewis
The hon. Gentleman was unable to join us last week, but I suggest that he looks back at Hansard for last Thursday’s debate, where he can see exactly what we outlined on our expectations for starter homes. He may link that to what I have said in the past few minutes.
Starter homes are a national priority to help a generation into home ownership. We therefore need to ensure that all local planning authorities are on board with delivery. The compliance direction will apply to an incompatible policy in a local development document, which does not include neighbourhood plans or the London plan. It will mean that the incompatible policy may not be taken into consideration as part of the determination of planning applications.
Question put, That the clause stand part of the Bill.
Brandon Lewis
Clause 7 sets out the meanings of the terms used in the starter homes clauses. It makes clear what the terms mean in the application of the clauses and will assist with their implementation.
Question put and agreed to.
Clause 7 accordingly ordered to stand part of the Bill.
Clause 8
Definitions
Mr Thomas
I beg to move amendment 88, in clause 8, page 5, line 1, at end insert—
“or
community-led housing schemes as defined at Schedule [New Schedule 1: community-led housing schemes]”
It is a pleasure to serve under your chairmanship, Sir Alan. Given your huge experience, you will know the disadvantage that Back-Bench Opposition Members are at in comparison with the massed ranks of the Government with all their civil servants behind them. In saying that, I hope you will protect me from any bullying by Government Members.
In moving amendment 88, I probe whether the definitions in clause 8 are sufficiently tightly drafted to allow the full range of would-be self-builders and custom house builders to benefit, while not creating loopholes for bigger beasts of the housing market to exploit.
It is interesting that the Conservative party, which is so committed to the free market, should be so actively seeking to meddle with the free market in the clause by creating almost a mini-market within the overall housing market. However, it would be a digression to go down that route.
To give the Committee a flavour of my interest in the clause and to amplify my concern, it might be worth imagining a situation where every member of the Committee lives in the same planning authority area—say Harrow, which is probably the best planning authority in the country and certainly the best place to live, with some very high-quality political representation, especially in the western part of the planning authority area. Let us assume we all live in the same planning authority area and have done so for a number of years. We are all living in houses that we do not see as suitable for our needs going forward and so want to be part of building a better home for each of us. We all get along famously, so we decide to work together and support each other’s efforts to get a better home.
If we were to build our homes under the self-build route, they would clearly, by their very nature, be somewhat different. I am a new man at the moment—I appreciate that is a controversial concept and my partner is not necessarily a supporter of it. As a new man, I do not need anywhere to watch the television. I simply do not have the time any longer to do that, because of childcare arrangements.
My property would be, by definition, very different from those of other Committee members who are not new men or do not have childcare responsibilities. The Minister looks like a man who would want a hot tub in his self-build property. Again, his would be a very different property from those that the rest of us want. The hon. Member for South Norfolk is the very definition of the type of Member who would want to create a mini-castle. Certainly, he would want a wide, sweeping drive to accommodate all his cars.
Mr Bacon
Yes, I do. In Berlin, people have come together, often led by an architect who has identified the site, people and finance, and worked in co-operation with the local authority, very much in a community-driven way, to produce housing co-operatives that people join. By becoming a member, they are entitled to a dwelling. As the co-operative grows, they can move to a different dwelling that is the right size for them—as they get older or become members of larger families—and they can continue to do that throughout their lives. I therefore support the idea of housing co-operatives.
I will correct the hon. Gentleman on one thing, though. To take the example of Housing People Building Communities in Liverpool, which I visited recently, he described owners as active, albeit collective. Of course it is possible to have co-operative action by communities that results in individual ownership, and that is what has happened in Liverpool. I support the idea of housing co-operatives being covered by the Bill. The difference I have with him is that I think they already are.
Brandon Lewis
As I said on Thursday, I always think it best to start by outlining what we agree on before moving to what we perhaps do not agree on. I agree with the opening comments of the hon. Member for Harrow West. I am sure we agree that he believes that he is the best representation that Harrow could have. I say gently that I hope that his other opening remarks were meant with some tongue in cheek, because otherwise Conservative Members will have found them pretty offensive.
I am sure that all members of the Committee will have spent many hours during mornings, evenings and weekends working through issues behind the Bill to ensure that what we are presenting will be transformational in how we make housing supply and increase home ownership. If the hon. Gentleman looks back at Thursday’s Hansard report—I appreciate that he was not with us on Thursday, as he obviously had other commitments—he will find that amendments were withdrawn and ideas were taken on board from both sides of the Committee in that proper tradition of working together where we can agree in the best interests of all. In that spirit, I hope to give him and my hon. Friend the Member for South Norfolk some words of comfort and reassurance about what the clause seeks to do.
The Government very much support community-led housing schemes, and the hon. Gentleman was right to outline the importance of co-operatives and those schemes. His amendment would add housing built by community-led housing groups for the good of the community to the clause. However, the individuals who first live in such properties would not necessarily have an input in their design, and I argue that that is not self-build or custom house building, nor should it be considered as such.
Where a group of people want to build or commission their own homes next to each other to enable them to live as a community, legislation already allows for that, as my hon. Friend rightly identified. Indeed, supporting such people in the way we see elsewhere around the world, and in Europe in particular, is the reason why “associations of individuals” is included in the definition, as he rightly pointed out. I categorically assure him that groups of people coming together in whatever format—whether loosely and informally or in a more formal organisation—to develop a genuine self or custom build property into whose design and build they have an input is intended to be included in the definition.
Mr Thomas
I am grateful to the Minister for his opening remarks thus far, but I wonder whether I could push him a little further. When he writes to every planning authority—as I have no doubt he will—perhaps he can be clear that housing co-operatives in the format that he has described, using the language that he has used, would be covered under the definition of self-build and custom house building. They would then benefit, crucially, from being able to indicate their interest and from being on the register and would have to be contacted by the planning authority if suitable land became available.
Brandon Lewis
Obviously our words in the House are widely read by people far and wide, and I am sure they will pick up on that. In any communications that we send out following Royal Assent, I will very happily make it clear that any group of people coming together, if they are genuinely looking at custom building and self-building and having an input into the design, where the owner and occupier will have been part of the process, would qualify as custom build and self-build.
I would go a bit further in qualifying that. Traditional community-led housing schemes can include members who are not interested in self-build community house building and therefore would not benefit from joining the register. In those cases, I do not see why individuals within community groups who are interested in self-build and custom house building cannot join together, as individuals or a group, or, if they wish for land close to each other, as an association of individuals, as the qualification outlines.
The overriding rationale of self-build and custom house building is that the person who lives in the finished property has a choice over the design of that property. My hon. Friend the Member for South Norfolk spoke powerfully about this on Second Reading. As he outlined, this is also about moving the housing market. Even where a developer is involved, it is about moving into building property that is focused on the customer’s needs, with the customer being involved in that outline, rather than the traditional build method that we have seen previously in this country.
Brandon Lewis
I look forward to that conversation with my hon. Friend.
Let me finish by saying that although we all see the benefit and goodness of a community group building for unnamed individuals or for the greater good of the community—it is incredibly worthwhile in itself, and I am sure all of us across the House would encourage it—it is not self-build and custom build. For that reason, I hope the hon. Member for Harrow West will withdraw his amendment.
Mr Thomas
I welcome the Minister’s efforts to move at least partly in my direction. There are opportunities for us to discuss the state of the housing co-operative world more generally through other amendments that I have tabled. Let me gently raise again with the Minister my concern about clause 8(2) and the example I gave of the Lewisham initiative, where a local community land trust working with the council is coming together to provide homes at local level. There are members of the land trust who want to live in the community-led housing scheme, but it is effectively a corporate body being set up to do this work. Would it be covered?
Brandon Lewis
To qualify for self-build and custom build, individuals who are going to own and live in the property need to be part of the design and production of that property. If the organisation is commissioning properties for people who are not part of the design panel, they would not by definition be self-build and custom build.
Mr Thomas
I am grateful to the Minister for that. In which case, helpful as his comments have been, it sounds to me as though some housing co-operatives, but not all, could be covered by the clause. Given the forces arrayed against me, I will perhaps accept the Minister’s words of encouragement for one part of the housing co-op sector and return to my concerns about the need to support the wider housing co-op sector later in proceedings on the Bill.
Amendment 88 was very much a probing amendment. I say gently to the Minister that this is a very bad Bill overall, but, in accordance with the spirit of Committee proceedings, we can make it slightly less bad through our debates; I hope my remarks are seen in that spirit. I welcome at least part of the Minister’s remarks, which were helpful. I therefore beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Matthew Pennycook
My hon. Friend makes a very good point. Access to finance is a very real issue—it is perhaps less of an issue than land and land assembly, but it is an issue none the less. Amendments 81, 82 and 83 will touch on that area, and I hope we will hear from the Minister in response.
The concern that the Bill might place unreasonable burdens on local authorities was touched on by a number of witnesses in written and oral evidence to the Committee. For example, the chair of the board of the Planning Officers Society, Mike Kiely, raised such concerns in his written submission, in which he stated that the right-to-build provisions could place a considerable additional burden on local authorities. Similarly, the CPRE expressed the concern that the new duty may be too onerous in many areas. If the Bill is to achieve its objective of scaling up the sector, it is vital that local authorities view prospective self-build and custom house builders as partners in helping to meet housing need, not as a burden.
However, we want to make sure that the Bill strikes the right balance between a common national framework for the full right to build and local discretion. There is a danger that few people will join registers, particularly if they are not well publicised by local authorities or if the eligibility criteria are too restricted. Some in the industry have raised that concern directly with me. If we are to see large numbers join local registers, as I hope we will, we need to make sure that local authorities do not face disproportionate or unduly onerous costs or debts as a result of meeting their new duty. Different parts of the country have different housing and land markets, and there will be some, particularly in rural areas, where the costs of servicing plots could be disproportionate or, in some cases, simply impractical. We know that many local authorities can expect to make a profit from the sale of the land at market value in due course, but there will also be increased costs, as the impact assessment accompanying the Bill makes clear.
We appreciate that, in the short term, the Government intend to provide support to cover the costs of developing the register, under the new burdens doctrine. We would appreciate clarification of whether they intend to provide support to cover all the associated costs of developing and implementing the register, including servicing plots of land, and also whether the fees—which, as part of clause 11, can now be recovered in connection with a duty—can be legitimately used to cover the cost of servicing plots of land for the purposes of the duty.
In instances where the local planning authority is not exempt from the duty, as permitted by clause 10, and where full recovery of costs is not possible, our concern is that some LPAs could be hit with unreasonable costs. We believe it is important to ensure that the costs remain proportionate, whether they are for servicing plots of land in the ownership of the authority itself or whether they relate to cases where the granting of suitable development permission opens the authority up to servicing costs on land owned by others. Where they are not, or where servicing is simply impractical, local authorities have a means of avoiding unreasonable costs and debt.
Amendment 84 would achieve that by revising the proposed definition of “serviced plot of land” to cover land that has access to a public highway and connections to electricity, water, waste water and other services, or that can be provided with those things in specified circumstances, or within a specified period, and without unreasonable cost. That would protect local authorities by allowing them to avoid the high upfront servicing costs that might otherwise be involved in fulfilling the full right-to-build duty in some instances.
Brandon Lewis
The hon. Gentleman commented on some of the finance issues, particularly relating to mortgage lenders. I should outline in opening my response to him that the Government have made a £150 million custom build serviced plots loan fund available to enable greater access to serviced plots. I encourage local authorities to work with private or third-party partners to take advantage of that funding to move these issues forward.
Last Friday, I visited one of the custom build areas, in Stoke, which is one of the vanguard areas for the pilots, and met a couple of families and visited one of the homes. I spoke to the chief executive of the mortgage lender—a local building society—who outlined his desire to go further with custom build lending. He said small and local building societies were particularly keen to do that, because it gives them a clear niche in the market, where they can be competitive against the larger companies, which obviously want to work on a more national, organised scale. That gives small local lending companies—we all want small and medium-sized enterprises of all types to grow—a real opportunity and a real niche, and I would encourage people to look at that option.
Mr Thomas
I am always encouraged by references to building societies, and I welcome the Minister’s experience. Just to be clear, would the local authority in Stoke have been able to benefit from the fund, to help make self-build plots available? That is the point the Opposition are trying to probe the Minister on.
Brandon Lewis
Yes. That is what I am saying. I would encourage any local authority, particularly as we go forward beyond the vanguards, to work with private and third sector partners or other vehicles—including, potentially, co-operatives if they qualify for self and custom build—to take advantage of that funding. The pilots have been doing some phenomenal work. On average, we had 80 people coming forward on the register in just the first three months of the scheme, which is an indication of the appetite to take this forward. That backs up the comments by the National Custom and Self Build Association, which we support and want to deliver on, building on the work done by my hon. Friend the Member for South Norfolk in his private Member’s Bill, to see that part of the sector double in size over the next few years.
Brandon Lewis
The amendment is aimed at ensuring that authorities give suitable development permission to housing across all tenures, not just custom build. We heard earlier what that does for a military veteran who is not interested in custom build. I would say a couple of things to that military veteran.
First, they should think about self-build and custom build under these new provisions. I visited a company called Beattie Passive in the constituency of my hon. Friend the Member for South Norfolk, which can develop and help somebody like that learn how to build their own home and deliver it for about £30,000, making it a very affordable proposition.
We come back to the debate we had, in part, on Thursday. Members should read this part of the Bill not as the entire solution to what we want to do to get house building back to where it should be after we inherited an awful legacy, but as part of the work we are doing. The Bill is part of the work and this clause is just part of that. In the same way, starter homes are part of the solution, as is custom build. It builds on the fact that we have exceeded our target for affordable house building over the past four or five years and we are now in the process of the new scheme to deliver 275,000 affordable homes. That is the fastest rate in more than two decades and, of course, in terms of council housing we, as a Conservative-led Government, have a strong record of delivering more in five years than the previous Labour Government did in 13. I am extremely keen that we continue to press ahead with further reforms to the planning system to drive up housing supply.
Through the national planning policy framework and the Localism Act we have put local plans at the heart of the system. Such plans set out a vision and a framework for the future development of the area, including where to locate new housing to meet the needs of the community, but we must be realistic about what can be achieved and when. That applies to the provision of infrastructure, and when sites might come forward for development. Linking this action to the earlier comments, I clarify for hon. Members on both sides of the Committee that we recognise that this is a new burden and, as such, money will be set aside. The process for this and the work of local authorities, not least in the 11 vanguard areas, is not complete, so I will not give specific numbers today, but I assure hon. Members that it will be sufficient to ensure that local authorities are not disadvantaged by the introduction of this policy.
Mr Thomas
The Minister has mentioned the 11 vanguard authorities a number of times and has given the example of his recent visit to Stoke. I would welcome hearing whether any of those vanguard authorities are in London. Given the scale of housing need in London, what has the experience been of the vanguard authority in London, if there is one?
Brandon Lewis
I do not think there is a vanguard authority in London, but if the hon. Gentleman is offering to put Harrow up to take this forward for London, I would be very happy to talk to him about that opportunity.
Local planning authorities are already required to meet the full, objectively assessed needs for the market for affordable housing in their area. Although that includes the demand for custom and self-build housing, many local authorities are still not proactively planning to meet the demand for custom and self-build in their area. As we want this area to double over the next few years and to deliver that through this Parliament, it is important that we drive this forward and have that focus, as my hon. Friend the Member for South Norfolk said. Placing a statutory duty on relevant authorities to commission sufficient serviced plots in line with demand will ensure that pent-up demand is also starting to be addressed. The proposed amendment would set an unrealistic expectation and burden on local planning authorities.
In addition, local planning authorities simply may not have sufficient land available to meet their need, or sufficient landowners willing and able to come forward for development within the allocated time. The proposed requirement in the national planning policy framework to have a five-year supply of deliverable land is a more effective tool. Among the vanguards, it is also interesting to see that areas of natural beauty and national parks were coming forward wanting to play their part. Even in areas where land can be challenging, we have vanguards wanting to do their bit. The Bill is intended to ensure that there is more permissioned serviced land available which is suitable for self-build and custom house building.
As we have heard, the numbers are still low. Custom build still only constitutes around 10% of all housing, and there are considerable benefits in promoting this type of housing further: it will diversify the sector and encourage development on sites which are too small to be of interest to the major house builders and perfectly suited, therefore, to small and medium-sized businesses around the country. It will provide business for the smaller builders and developers who are happy to offer those bespoke properties. Our ambition is to double the figure to 20%. Our proposals seek to embed custom build as a legitimate form of housing supply, as part of the wider housing mix, while still keeping expectations at a manageable scale compared with 100% of housing need. So I ask the hon. Member for Greenwich and Woolwich to withdraw his amendment.
Matthew Pennycook
My hon. Friend makes a good point. There is a specific weakness in that area, but there is also the wider problem of access to finance for self-build and custom build. To give the Government their due, they have put support in place, but it would be useful to hear what more is currently being done to ensure that more of those who want to take this route can be supported to do so. Alongside efforts to make finance more accessible, the Opposition believe that, given the burdens the Minister recognised that the new, full right-to-build duty places on local planning authorities, there is a case for ensuring that the authorities in any given authority area reflect the effective, rather than notional, demand for self and custom build. By that, we mean the number of people or groups who are in a position to fund their project past foundation stage rather than the sum total of individuals or groups who are vaguely interested in taking that route and may begin the process of exploring whether they can access the necessary finance some years down the line.
Clause 11 already provides for the entering of persons who have failed to meet particular eligibility conditions in a separate part of the register and makes it clear that further refinements to the eligibility criteria may be brought forward in regulations. However, our amendments would make it clear that those on the register who genuinely seek to build or commission their main home and have the finances to do so should be entered in a separate part.
Amendments 81, 82 and 83 would ensure that local authorities are required to provide suitable planning permission on serviced plots of land for those with a reasonable prospect of building their own home in the immediate future. It would not exclude those who are yet to demonstrate that they have obtained effective mortgage finance from the register entirely; they could still be entered in a separate part of the register to which we would expect local authorities to give reduced priority. That would ensure that local authorities, in so far as they must now respond to local demand for self and custom build in a fuller way, will respond to the effective, as opposed to notional, demand in their area for these types of homes.
Brandon Lewis
I am pretty much in complete agreement with the hon. Gentleman. In fact, the only demand on the register should be effective demand. It is important that local authorities are confident that everyone on the register for self-build and custom house building is in a position to finance their project. The amendments, however, are unnecessary because we will achieve our mutual aim of ensuring effective demand through locally set eligibility criteria for the registers. We can build on some of the work done with the 11 vanguards and how locally led is the way to go. We asked all local authorities to submit expressions of interest, so I want to put on record our thanks to the 11 who have worked with us on that over the past few months.
Mr Thomas
I appreciate that the Minister may not be able to say so at this point, but, perhaps later in our proceedings, will he say what lessons can be learnt from the 11 vanguard authorities to deal with the scale of the housing crisis in London? There is potentially quite a bit of interest in self-build and custom house building in London, but the cost of land and other factors driving the housing crisis may make it even harder for those who want to do that. It would be helpful to hear a little more on whether the lessons from the vanguard authorities are helpful in any way for the specific London element of the picture.
Brandon Lewis
Obviously, it would have been good if a London authority had wanted to play a part by being one of the vanguards, as that would have given a direct outcome. However, some of the vanguards cover areas of high value, and the experiences in areas such as Stoke, which may have lower land value but is still a city with the challenges of land in and around it, and even those such as Cherwell—and, although not part of the vanguard, some of the work being done around Bicester to make custom build more viable in specific areas—show recognition that we have put in place a £150 million loan fund to which developers can apply to service plots for self and custom building to help make that more achievable and affordable for people. Hopefully, London local authorities will want to come forward as they start to appreciate that.
Clause 11 provides for regulations that enable relevant authorities to determine their own eligibility criteria and it is intended that one part of the locally determined criteria will be a financial solvency test. I suggest that enabling local authorities to apply such a test before acceptance on the register is a more effective means of achieving effective demand than the amendment, not least because that will enable each authority to specify in detail what reassurance it thinks it needs about the financial position of people seeking to join its register in its area.
The tests will be tailored to the specific requirements of that local area and may take into account the fact that not all self and custom house builders will require mortgage finance. For this reason, I hope the hon. Member for Greenwich and Woolwich will be able to withdraw the amendment.
Mr Thomas
I was briefly provoked by the Minister’s response to my intervention. I say to him gently that it is incumbent on the Minister setting up an initiative—given the scale of the housing crisis in London—to have worked a little harder to try and get a vanguard authority in London. Why, for example, did Bromley, Bexley, Westminster or Richmond not seek to become a vanguard authority? The Minister, with his links into Conservative associations in those areas, surely could have persuaded the leaders to apply to become vanguard authorities, with all the helpful lessons for the housing crisis in London that their self-build experience might have demonstrated.
Housing and Planning Bill (Seventh sitting)
Debate between Gareth Thomas and Brandon Lewis
The Minister for Housing and Planning (Brandon Lewis)
To help move things along, I am happy for the Question to be put.
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
I triggered this debate in order to ask the Minister to dwell on the concern that if permission is given in principle, even just for self-build designated slots, there is a risk of pushing up the price of that land—the acquisition of land is currently one of the biggest deterrents to broadening the self-build sector. The Minister gave an interesting justification for clause 9 standing part of the Bill, much of which I am sure is perfectly reasonable, but he did not answer the particular concern I raised. I would be grateful if he might dwell on that point and come back to me.
Brandon Lewis
I dealt with that issue in the long conversation we had this morning, and I made a point about the basics of supply and demand. I will go a little further to help the hon. Gentleman by saying that planning permission in principle is on land that is identified on a brownfield register or in a potential neighbourhood or local plan. The land is therefore already potentially designated for housing. The argument that planning in principle has any further effect on the value of the land is completely false.
Question put and agreed to.
Clause 9 accordingly ordered to stand part of the Bill.
Clause 10
Exemption from duty
Question proposed, That the clause stand part of the Bill.
Brandon Lewis
Clause 32 and chapter 4 of part 2 of the Bill relate to rent repayment orders and the first-tier tribunal’s power to make such an order in certain cases. The new provisions apply in England only. A rent repayment order requires a landlord to repay money paid as rent. It is currently available in situations in which a landlord has failed to obtain a licence for housing that ought to be licensed under the Housing Act 2004. The order is obtained by application to the first-tier tribunal, which has the power to make a rent repayment order for an amount equivalent to any rent received during the period of the offence up to a maximum of 12 months’ rent.
The clause provides that a rent repayment order may be made if a landlord commits an offence to which this chapter applies, which includes the following offences: the control and management of a house in multiple occupation that is subject to licensing but is unlicensed, and the control and management of a house that is subject to selective licensing, but is unlicensed. That consolidates the existing provision under the 2004 Act and that a rent repayment order may be made in respect of offences of using violence to obtain entry to a dwelling under the Criminal Law Act 1977, illegal eviction or harassment of occupiers of a dwelling under the Protection from Eviction Act 1977, failure to comply with an improvement notice or a prohibition order issued for a dwelling under the 2004 Act, or breach of the new banning order introduced in chapter 2 of this part of the Bill.
Mr Thomas
It is delightful to have the Minister back. I hope he is feeling less grumpy than he was this morning and that he will adopt the same, more measured tone of the Under-Secretary when good and sensible points are made by Opposition Members and agree to go away and reflect on them with a view to coming back on Report with sensible amendments.
Clause 32 reads well, but I rise to make one particular point. Assuming that a housing authority goes to the first-tier tribunal to take action against a rogue landlord, a tenant may well want a rent repayment order to be issued as part of the package of action taken against that landlord. Does the Minister envisage that legal aid will be available to tenants so that they can access quality legal advice and make robust representations at the first-tier tribunal rather than rely on the good will or not of the housing authority bringing the action?
The clause could be helpful for the tenants of the 10,500 rogue landlords, but we need to ensure that tenants are properly represented and have the means to benefit from it. It would be helpful to hear from the Minister whether any discussions have taken place with the Ministry of Justice about whether tenants in such a position who want a rent repayment order to be issued might be able to secure legal aid for quality representation at the first-tier tribunal. I look forward to his response.
Brandon Lewis
We published a document in August seeking comments on a range of issues in relation to tackling rogue landlords and these clauses came out of the responses to that. Of those who responded, 88% said that we should introduce rent repayment orders when a landlord has failed to comply with the statutory notice and 85% said that we should introduce rent repayment orders for situations in which a tenant has been illegally evicted. This measure is therefore very much driven by the people who responded, including tenants,
I take on board the points that the hon. Gentleman made, though I ignored some of his remarks that do his own good humour no justice. I will have a look at those points and come back to him in the next few days.
Question put and agreed to.
Clause 32, as amended, accordingly ordered to stand part of the Bill.
Clause 33
Application for rent repayment order
Amendments made: 35, in clause 33, page 15, leave out line 24.
See Member’s explanatory statement for amendment 34.
Amendment 36, in clause 33, page 15, line 27, leave out first “breach or”.
See Member’s explanatory statement for amendment 34.
Amendment 37, in clause 33, page 15, line 27, leave out second “breach or”.
See Member’s explanatory statement for amendment 34.
Amendment 38, in clause 33, page 15, line 29, leave out “the breach occurred or”.
See Member’s explanatory statement for amendment 34.
Amendment 39, in clause 33, page 15, line 32, leave out “breach or”.—(Brandon Lewis.)
See Member’s explanatory statement for amendment 34.
Question proposed, That the clause, as amended, stand part of the Bill.
Housing and Planning Bill (Second sitting)
Debate between Gareth Thomas and Brandon Lewis
Mr Thomas
Q 217 I draw the Committee’s attention to my declaration in the Register of Members’ Financial Interests. I want to pick up on the question that Mr Hollinrake was asking about client money protection. Mr Cox, can you flesh out the detail and the type of amendment that you would want to see that would offer that? Similarly, Mr Cox and Ms Uphill, do you agree with Mr Smith on the potential benefit of three-year tenancies and on a provision for that being included within the Bill?
David Cox: If I can deal with the client money protection issue first, client money protection is at the moment primarily provided by the professional bodies. All our licensed ARLA members must have client money protection, so that in the event that any one of them goes bust or misappropriates the funds—it has happened 12 times in our 34 years—we will cover the moneys up to certain caps.
There are providers out there that offer client money protection for agencies through the open market, but client money protection means two things. First, it is an insurance premium, so that in the event of an agency going bust or misappropriating funds, clients—both landlords and tenants—get their money back. Secondly, and more importantly for us, it means that agencies have to have their client accounts audited, so that you know whether something is going wrong. We audit every single one of our member firms’ client accounts, and we require that in order for them to join the professional body.
In terms of an amendment, I am afraid I do not have the specific wording here today, but I can provide the Committee with a set of words. We provided a set of words for the Consumer Rights Bill last year, and that was supported by more than 20 organisations, including landlord associations, letting bodies, consumer groups and Shelter, Generation Rent and Crisis. It is an issue that has unanimous support among everyone involved in the housing sector. The Consumer Rights Bill started moving us in the right direction, with firms having to display whether they have client money protection, but we estimate that on average on any given day—my members alone account for about 60% of the market—firms will hold just under £3 billion of other people’s money. That is protected for our members, but what about the other 40% that is not protected?
On the three-year tenancy question, three-year tenancies can work. I do not think they should be mandated because there are a lot of situations where people do not want a three-year tenancy. In my previous answer I talked about somebody who may be coming to London or one of the other big cities on a short-term contract. The other prime example is a student. When they have been in halls for one year and have only two years left of their undergraduate course, do they want to sign a three-year tenancy when they do not know what they will be doing at the end of their third year? So we would suggest that the current tenancy regime works.
According to our latest survey of our members, the average tenancy is now 20 months, and we have to remember that, according to the Government’s statistics—I think it was the last survey of English housing—well over 90% of tenancies actually end at the request of the tenant, not the landlord, so removing that element of flexibility could do more to harm those that probably want it than actually help.
Carolyn Uphill: As the clients, when we are talking about client money protection by our landlord members, we would of course support client money protection because it is only right that the money should be ring-fenced within agencies. I am sure David will supply you with a suitable form of words.
As for three-year tenancies, the English housing survey of 2013-14 evidenced that the average tenancy was three and a half years, so tenancies are not as short as some people imagine. Many, many landlords are more than happy for tenants to either be given as long a tenancy as the mortgage provider allows or roll on to a longer tenancy, because what landlords want is good long-term reliable tenants without the costs associated with churn. But if that were to be imposed as a minimum, it would seriously damage the availability of accommodation for those who need it on a much more flexible basis.
David mentioned students. I am a student landlord. It would tie me in knots when my students decide to stay on in Manchester as young professionals and say, “Can we stay on for a year because we don’t know where our career is taking us?” so I end up with a mixed house. Any imposition of a period beyond the 12 months that, in that particular case, suits the academic year would cause me as a landlord to consider, “Can I stay in this business?” There are lots of other landlords who are letting because they are away for 12 months and various other factors. There really should be flexibility in the market. There are tenants who want flexibility and there are plenty of landlords willing and happy to give longer tenancies to those who want them.
So we support the principle of longer-term tenancies being available if the mortgage provisions can stop that being constrained, but not as an imposed three-year or any other fixed minimum.
David Smith: I was not in any way suggesting that three-year tenancies should be mandated. All I am talking about doing is removing barriers. I should also say that the statistics are very difficult to interpret, because longer tenancies are more common outside London and the south-east. As soon as you drive into London and the south-east, it is not so much that tenants do not stay for two or three years, but they are forced to sign a series of 12-month tenancies. There are a range of reasons for that. At the risk of incurring David’s wrath, I will point out that one of the reasons for that in London is that letting agents encourage a series of 12-month tenancies to secure their fee structure. That also, in our experience, is one of the things that most actively drives rent increases, particularly in the capital, and we feel that if tenants were able to sign two-year tenancies, and those barriers to two-year tenancies were removed at the front end, the pressure to drive that rent up during the course of the tenancy on each renewal would be reduced.
Brandon Lewis
Q 218 On that point, on the issue around tenancies, when we look at what is happening elsewhere around the world, many places have a much larger and more advanced rental market than we do and still have one-year tenancies. Would you agree that one of the differences seems to be that we have a buy-to-let-led system—I think the colloquial phrase is “mama and papa” landlords who own a small number of properties, about 91% of the market—and the biggest risk to a tenancy is that property being sold to an owner-occupier, whereas in other models, such as multi-family housing, if the property gets sold, the invoice from the managing company might change from Greystar to Amlin or somebody else, but the property tenure remains the same and the tenancy issue is of a different nature. That leads back to one of our earlier evidence sessions, when somebody made the point about how more institutional money with a more professional rented sector changes the dynamic around the tenancy lengths, anyway.
David Smith: I am not sure I would agree with that. The statistics already show that the majority of tenancies end at tenants’ requests, not because the landlord wants to sell. Increasingly, the sector’s structure, even among smaller landlords, is changing. Landlords are often now increasingly selling with tenants in place to other landlords. Some of this is the buy-to-let sector in England and Wales growing up and perhaps becoming more like some of the buy-to-let sector abroad. Our view remains that one of the reasons that we tend to have many 12-month looped tenancies is that it has grown up that way through influences from the opposite side of the equation, from mortgage company pressure, from long lease pressure and from lettings agency pressure. At the moment, landlords are very linked to six-month or 12-month block tenancies. There is very little other discussion about term in the market. If we can break out of that cycle, we feel that would do a lot to change the dynamic.
David Cox: I would agree with that, and at the same time with what the Minister said about looking at other countries. We hear a lot that we should look to Germany and France and their tenancy models. However, in relation to our tenancy model, that is comparing apples with pears. We have to factor in that in places such as Germany, they have indefinite tenancies but it is the tenant’s responsibility to maintain the property during those tenancies, and many do not come with kitchens and bathrooms. Here, the obligation is entirely on us as the landlords to maintain the properties and the goods inside the properties, whereas in Germany and France it is the tenant’s responsibility. We also have to factor in that they have a much more mature rental market. They have many more institutional investors. In Germany and France, the vast majority of the private rented stock is owned by institutional companies, whereas ours is owned predominantly by the “mama and papa” landlord.
It is also still a relatively new market. Looking back 100 years ago, 90% of the UK’s stock was in the private rented sector. By the time we had regulatory liberalisation under the Housing Act 1988, that had shrunk to less than 7% of the sector. It has only grown back to the size that it is today with that regulatory liberalisation, particularly the ability to use section 21 of the Housing Act, coupled in 1996 with the introduction of the buy-to-let mortgage, which provided a financing vehicle to allow people to start investing in property in the UK.
We need much more investment in property. There is a chronic housing shortage in the UK at the moment. The Government estimate that for every house built, two new households are created, therefore the level of housebuilding is not at a sustainable level. The only way we are going to get rents under control, get house prices under control, particularly in places like London, is by a massive house building programme.