Housing (London)

Heidi Alexander Excerpts

Wednesday 5th February 2014 Westminster Hall

[Heidi Alexander (Lewisham East) (Lab)]

It is a pleasure to participate in this debate, and I congratulate my hon. Friend the Member for Erith and Thamesmead (Teresa Pearce) on securing it. I am afraid that I cannot stay for the whole debate because I am chairing a meeting at 10.30 am, so I will miss the contributions from the Minister and, sadly, from our Front-Bench spokeswoman, the hon. Member for Wolverhampton North East (Emma Reynolds).

When I sat down yesterday to think about what I might say in this debate, I realised that I have made a similar speech in each of the years I have been a Member of Parliament. I make no apology for that, because the housing crisis in London has a direct impact on my constituents. For many of them, that impact is devastating for their lives and those of their families.

The housing crisis in London is of long standing, but I believe it has been made worse by the policies of the Tory-Liberal Government. If the crisis is not addressed, it will continue to cause misery and unhappiness for many. It will damage our economic competitiveness and place enormous strain on our already overstretched transport system, as the hon. Member for Mid Bedfordshire (Nadine Dorries) has said.

Some may think of London’s housing crisis as a problem that affects only certain people—perhaps those on a particular income or of a particular age—but nothing could be further from the truth. With rocketing house prices and sky-high rents, London’s housing crisis is as much about the young professional couple in their 30s who are unable to buy their first home as about the family of five who rent an overcrowded flat from a slum landlord. The housing crisis is as much about the nurse or the firefighter who cannot afford a shared ownership property as it is about the rough sleeper who can find shelter only in a disused garage or on a bench in a railway station.

[Emily Thornberry (Islington South and Finsbury) (Lab)]

The issue affects all of us across London. I do not know whether I have yet shared with my hon. Friend the story of a firefighter and a midwife whom I met, who lived in overcrowded conditions and wanted to part-buy. When I looked into where they might get a part-ownership property, I realised that the only place they could afford to buy was somewhere out near Redbridge, and only after she had qualified as a midwife. Affordable housing in central London is social housing, in my view. Does my hon. Friend agree?

[Heidi Alexander]

I do. In my experience, it is especially difficult for people with families who are trying to buy a two or three-bedroom shared-ownership property. They have to be earning in the region of £40,000 a year before they can access such properties.

[Nadine Dorries]

Many moons ago—some in this room may not even have been born—in 1978, as a newly qualified nurse on a newly qualified nurse’s salary, I was able to buy my own home independently without a partner. Compare that with today, when there is absolutely no possibility of a newly qualified nurse buying a home in London.

[Heidi Alexander]

I have met nurses in my constituency who might be able to afford to buy a flat elsewhere in the country, but in London that is simply impossible. I have not dreamt up the nurse, the rough sleeper on a bench in a railway station or the others whom I have described; they are real people whom I have met and spoken to in the past few years. I am not surprised when I read that 82% of Londoners think that the capital is in the grip of a full-scale housing crisis, or that 27% believe the affordability of housing to be the most important issue facing the capital, because I hear the same thing week in, week out.

One of the most common conversations that I have at my fortnightly advice surgeries is about the huge mismatch between the demand for and the supply of affordable homes in London. I see family after family living in overcrowded conditions who want to move to a suitably sized property at a rent that they can afford. I say “rent”, because the idea of buying a home is completely out of reach for many. Someone on a minimum-wage job lucky enough to be working full time—that is quite a big assumption—earns less than £12,000 a year. The idea that there is any property in London that they could afford to buy is laughable.

The truth is, as my hon. Friend the Member for Erith and Thamesmead said, that if I had not been in the fortunate position of buying a home with my husband, many parts of my constituency—that is Lewisham, not Kensington or Chelsea—would be unaffordable for me as an MP on a salary of £68,000. I do not say that to plead poverty; I recognise that I am very well off. However, my situation demonstrates that the housing market in London is such that people in many different walks of life cannot afford the modest home that they would like.

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

My hon. Friend says that there are parts of Lewisham that she cannot afford on an MP’s salary. Is she aware that there is nowhere at all in Hackney where I can afford to buy a property on an MP’s salary?

[Heidi Alexander]

My hon. Friend makes an excellent point. I am quite lucky that my husband and I bought a terraced house in Lewisham a few years ago, because if we were buying today, I am not so sure that we could afford it. House prices have gone crazy. The Government are stoking up demand with their Help to Buy scheme, but they are simply not doing enough to increase supply. The result is a potentially massive housing bubble.

With fewer and fewer people able to buy, more people end up living in properties in the private rented sector, even when that would not be their first choice. There is increased demand at both ends of the private rented market, because people are not buying and homes to rent from councils and housing associations are so few and far between. The rents of thousands of working people in London, many of whom rent from private landlords, are subsidised through housing benefit.

Since 2009, the number of people working in London and receiving support from housing benefit has increased by 110%. That has happened on the Government’s watch. Ministers claim that they want to reduce the housing benefit bill, but unless they invest in building significant numbers of homes to be rented at social rents—not so-called affordable rents—that bill will continue to rise.

What needs to change? First, money must be made available in the form of capital grants. The Government’s decision in 2010 to slash the affordable house building programme by 63% was just plain wrong. Housing associations need finance to deliver homes. Councils must be given greater borrowing powers so that they, too, can once again build on a reasonable scale. We must lift the cap on borrowing on the housing revenue account.

I know that the Government have made minor changes, but they do not go far enough. London councils estimate that if the cap was lifted, 14,000 extra homes could be built by 2021. We should also explore the idea of setting up a London housing corporation to build homes directly, as suggested this week by Labour London assembly member Tom Copley. The simple truth is that we need to invest now to save on revenue costs in the longer term. Taxpayers’ money is being used to line the pockets of London’s private landlords on a massive scale. That cannot be right, and the solution is to build more social housing.

Secondly, we must take a more strategic approach to public land. Londoners know only too well that the shape of their public services is changing. Fire stations are closing, changes have been proposed to police stations, and virtually every hospital faces some form of reconfiguration. Such buildings and the land that they sit on are precious public assets and should not be flogged off to the highest bidder simply to end up as expensive flats for overseas investors to leave empty. When there is such housing need in the capital, that is scandalous and should not be allowed to happen.

Thirdly, we must take some difficult decisions about our planning policy, in both London and the areas around it. Do we build up or out? How can we finance comprehensive regeneration schemes on brownfield sites in London? How do we ensure maximum benefit to existing communities? Politicians at all levels have a role to play. If we are to deliver the homes that London needs, there will controversial planning applications time and again. Politicians are going to have to step up to the mark and argue the case as to why something is the right thing to do. It is notable that recent figures from the House of Commons Library show that Labour-run councils in London have built five times as many affordable homes as Tory councils.

Councils need proper powers to deal with developers who sit on land waiting for house prices to rise, and they need to be able to negotiate hard with developers about social rented housing provision. That comes back to my first point: financing mechanisms must be put in place for social housing to be delivered. I do not pretend that solving London’s housing crisis is easy, but we must understand the scale of the challenge and act now to do something about it. I do not want to be stood here in five years’ time making the same speech again.

If we have a Labour Government after 2015, I believe that they will be committed to doing something about the situation; I am afraid that the present Government do not fill me with the same optimism.

[Several hon. Members]

rose—