Housing (London)

Glenda Jackson Excerpts

Wednesday 5th February 2014 Westminster Hall

[Ms Karen Buck (Westminster North) (Lab)]

I also congratulate my hon. Friend the Member for Erith and Thamesmead (Teresa Pearce) on securing this important debate. Looking around Westminster Hall, once again we see Labour colleagues—but not, sadly, colleagues from other parties—speaking about the housing crisis in London.

In the Ipsos MORI poll in London a couple of weeks ago, we saw the evidence that, for the first time ever, Londoners rate the housing crisis as the most serious issue facing them, with 82% of those polled agreeing that we are in the grip of a housing crisis. That crisis affects just about every Londoner—certainly every younger Londoner, who faces the challenge of finding a home of their own. We see this crisis as a cost-of-living crisis, with people unable to afford to buy the homes that, until a few years ago, they were able to buy, albeit sometimes with a struggle. We now see that it is necessary to have a salary of around £50,000 to get a mortgage on a first-time property in London, and of course that is not far off double the average income in London.

We also see that the rented sector, which is growing so dramatically, is being squeezed in London, with rents up 7.9% last year to an average of £938 a month. Again, what we are seeing is not only a terrifying squeeze on Londoners’ incomes but an enormous increase in the housing benefit bill as a consequence; I will refer again to that increase in a minute.

The situation has implications for how we live and the nature of our society. We are seeing a record number of young people who are no longer able to leave home because they are unable to afford a home of their own. We are also seeing an impact on the London economy, which London First and other employers are raising as a matter of serious concern.

If people live in a family home where there is an opportunity for them to stay into their twenties and even into their thirties, that is not great for the families or the young people themselves, but at least it is manageable. However, if we are looking at the kind of young people whose families are in the private rented sector or social rented sector, the situation is leading to the explosion of overcrowding. Currently, 24% of all Londoners are living in overcrowded accommodation. Tragically, I often see young people thrown out of their overcrowded family homes drifting into sofa surfing and sometimes into homelessness. We have seen a dramatic rise in homelessness, especially among the young.

The situation has not only had a serious impact on people’s lives but caused an absurd increase in public spending on the consequences of failure. I made a series of freedom of information inquiries to London councils last month and found that London local authorities had spent half a billion pounds on emergency accommodation since 2010. My own local authority is Westminster, which of course has led the charge on so many of the policies that the Government are adopting. It has spent a staggering £111 million on emergency accommodation. That accommodation is bed and breakfasts and the replacement for bed and breakfasts, which is the nightly booked annex accommodation, with no time limit—families are stuck, often on the outskirts of London or even beyond.

[Glenda Jackson (Hampstead and Kilburn) (Lab)]

I entirely concur with everything that my hon. Friend has said, not only in this debate but in the many others we have had about this issue in the past. I can give an example from my own constituency, where a family has been housed—they have to be housed, because there is a statutory duty on the local authority to house them—in a place that is infested with lice and clearly unfit for human occupation. However, there is virtually nothing else that that local authority can do.

[Ms Buck]

My hon. Friend is absolutely right that some of the conditions that people are living in are shocking in their squalor. That is particularly offensive, given what was in a superb report produced a few weeks ago by Tom Copley of the Greater London authority. It showed that a third of former right-to-buy properties in London are now in the private rented sector.

I have said many times, in Westminster Hall and elsewhere, that it appals me that we can have two households living next door to each other, one in a local authority property where the rent is, say, £110 or £120 a week—allowing people in that household to work and thereby improving their incentive to work—while next door to them is a former right-to-buy property. Many such properties are rented back to the local authority for emergency accommodation, and the rent for them can reach £500 a week. I have been in some of them and seen water pouring down the walls and black fungus growing in the bathroom, including in the toilet. Even for a rent of £500 a week, it is impossible to ensure that such properties are anything other than a slum.

The coalition Government—and, indeed, the Mayor of London—want to see that process intensify; they want to see social housing sold off in central London. They want to see us flogging the last of the family silver, even though these properties are enormously important.

--- Later in debate ---

[Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)]

I congratulate my hon. Friend the Member for Erith and Thamesmead (Teresa Pearce) on securing this debate. As colleagues have said, housing is the most important issue facing Londoners. To those on either side of the House who think that the solution to the housing crisis in London is market-based mechanisms like more supply, I say that we have to start from the basis that the housing market in London is broken. Normal market remedies will not fix things.

The housing market is broken because of the limitless flood of non-domiciled buyers who are buying properties in zone 1, where upper middle class or even middle class Londoners once lived. They are being driven out into areas like Hackney, Walthamstow and points beyond. People who would never have dreamt of living in Hackney 30 years ago are buying three-bedroom family houses there for upwards of £1 million, and that means that I could not buy a family house in Hackney on an MP’s salary if I was starting out now.

In some cases, the non-domiciled buyers leave these properties vacant. Last week, we all read about the millions of pounds of unoccupied property in The Bishops avenue, where 12 houses in a row are completely unoccupied. One of the residents said he thinks that only three houses in the avenue, one of the most expensive roads in London, are occupied all the time, all year round. There is a limitless supply of such buyers, but what is the effect of that and why do they want to buy in London? Yes, London is a fantastic place to live, but those buyers know that even if they do not occupy the house or do anything to it, they will make a profit year on year because of increasing land values. Homes in London and in zone 1 are becoming land banks, investment vehicles for overseas buyers who, if we are lucky, come here a few weeks a year, but if we are unlucky, do not come here at all.

[Glenda Jackson]

I entirely agree with my hon. Friend, but the issue of absentee landlords is not limited to the top end of the market. In my constituency since the right to buy was introduced, many properties originally built as affordable, with a social dimension, have been changing hands again and again. Nine times out of 10, the landlords do not live in this country and have no interest whatever in maintaining the properties, with any responsibility handed over to managing agents. There is also a constant surge in tenants, with the rent going up every time the tenant changes.

[Ms Abbott]

I was of course talking about the top end of the market to illustrate how the effect ripples out to the homeless in Hackney or homeless families in Greenwich. There is constant pressure driving up house values in London, and that is what is behind the spiralling cost of rent.

Colleagues have spoken about what is happening in the rental market—my hon. Friends the Members for Eltham (Clive Efford) and for Lewisham East (Heidi Alexander) did so with particular vividness—and about spiralling rents which mean that families do not have security of tenure.

As for the social cost, London is increasingly becoming a city in which people have to be extremely wealthy or quite poor to live. That leads to a society that is inherently unstable. If we leave it to the market, to live in Islington or Hackney people either have to be able to afford a house that is worth upwards of £1 million, or be so poor that they are eligible for what social housing there is. That is an essentially unstable society and one in which it is extremely difficult to recruit public sector workers.

In Hackney, there is a generation of head teachers who originally bought at the end of the 1970s or beginning of the ’80s and who are now approaching retirement. Now, head teachers of that calibre, willing to stay for as long as they have stayed, will be hard to recruit, because no one can now buy a house in Hackney on a teacher’s salary. Young teachers who are very committed to Hackney and similar areas find themselves having to move outside the M25 in order to own a family house.

The housing problem is not only about bricks and mortar or destitution, but about what sort of society we want to see in London. How do we ensure that that society is stable? How do we recruit for the public sector in future, if increasingly people on an average public sector worker’s salary are scarcely able even to rent in the centre of London, let alone buy anything?

What is the answer to the problems that my colleagues and I have set out? We have to begin with what is happening in the private sector and at the high end of it. Something needs to be done about the non-domiciled overseas buyers—by looking at some sort of levy perhaps—and at the same time we need to make it easier for British buyers to buy off plan, although this is not the whole answer, of course. Let us remember that even flats in Dalston are being bought off plan by buyers in Hong Kong, but British buyers who wants to buy off plan two years ahead cannot get a mortgage. We need to look at the availability of mortgages to people here who are prepared to buy off plan one, two or three years in advance; otherwise, they will always be crowded out by foreign buyers who are able to get mortgage finance, which will continually drive prices up.

We need to have a financial levy on the non-domiciled buyers, but we also need to look at private sector landlords and how they are managed. It would be sad indeed if the boom in the right to buy was to turn into a new Rachmanism. Rachmanism gave private rented housing a bad name when I was a child in north Paddington. It would be extraordinary if, half a century later, through an unwillingness to exercise the right controls on the private sector, we went back to the bad old days of Rachman. I am not saying that we are there yet, but that is where the cycle is taking us. Furthermore, although the idea is unpopular, we also need to have rent controls. I do not care what we call them, but we have to bear down on spiralling rents.

My colleagues and I are saying that the crisis in London is a crisis not only for the homeless and for those who are having to rent for longer and later in life than they might otherwise have done, but for perfectly well housed people who are worrying about whether their children will ever be able to afford a house within the M25. Government could do a range of things, and Labour Members are shocked by the unwillingness of Government and of the Mayor of London, Boris Johnson, to take effective action to fix for the well-being of ordinary Londoners a London housing market that is broken.