Housing Supply

Jim Shannon Excerpts

Thursday 13th July 2017 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

I congratulate the right hon. Member for Wokingham (John Redwood) on his helpful presentation on affordable homes, which included some good ideas about how the Minister can address the issue.

As a father with three sons and two granddaughters, I well remember having a full house while my son and daughter-in-law lived with me. That is the way it was, because that is what they needed to ensure they could be on the site and then move. I declare an interest as a landowner; I have had a couple of sites passed that I have then given to my children to help them. Not every child has that opportunity. I remember when they lived with us, with their baby, while they built their house. There was a period when they accumulated money to finance themselves, get a deposit and move on. They did not fall into a category eligible for social housing, which would have enabled them to pay less for rental accommodation. Things in Northern Ireland are very different; the matter is devolved, as the Minister will know. My son Ian and his partner Ashley also lived with us before they got their first home so that they could accumulate some cash for their deposit.

I understand that time is of the essence, Mr Bone, and I will speak about a couple of points. Young people need their own space and their own lives. Sadly, social housing is so strained that many young people who work are unable to get a foot in and are therefore stuck either paying someone else’s mortgage by renting—as the hon. Member for Mitcham and Morden (Siobhain McDonagh) mentioned—or living with parents for longer than they would like.

Couples who both worked while they had young children used to be an oddity; now, the family in which one parent can stay at home and look after the children is fast becoming the oddity. That is due not to extravagant lifestyles but to the cost of getting on the housing ladder and of running houses that were bought when prices were high. In my constituency, and perhaps across all our constituencies, there are homeowners who now have negative equity, and it will be a long time before they get out of it, if ever.

Getting on the property ladder can be difficult for a young family. That is where the Government must step up and step in to assist first-time buyers. One of my staff members here in London is buying a house at £575,000. How on earth can they do it? Only with the good will of family connections is it possible to get on the first level of housing in this city. The sister of a girl who used to work for me lives in London. They are both accountants and probably fairly well paid, but the house that they are buying is £700,000. Where do people in London start if they want to buy a house?

The total housing stock in England increased by around 190,000 dwellings last year, as I am sure the Minister will mention. That is 12% higher than the previous year’s figure, but well below the 250,000 that the Government said would be built. I heard someone in my constituency ask recently how we planned to fill all the homes that we are building in Newtownards—1,000 new homes on a 100-acre site on the east of the town. Lagan Homes will build some 550 houses on two sites in Bangor, and another major developer, Turkington, is developing a site at the foot of Scrabo in the middle of Newtownards.

House prices have increased slightly over the years, but there is an undersupply of affordable private rented accommodation, as every one of us here can attest. An increasing number of applicants on the social housing waiting list are in housing stress, all of whom pose particular challenges and must be dealt with using the framework for councils provided by the community planning process.

My council area, Ards and North Down, has a population of 158,000 and is still growing. Almost 19% of the population is aged 15 or younger, 61.6% are 16 to 64 and 19.5% are 65 and over. The issue is not just houses but whether accommodation is suitable to the age of the people living there, including pensioners and those with disabilities. New build starts in my council area increased by 66% between 2012 and 2014, but they fell again in 2015. The urgent housing wait list—people who need houses right now—is 1,300 people long, which indicates the scale of the problem.

No one has yet talked about co-ownership. My son and his partner have a house today because of co-ownership. That is what got them on the ladder; they had to start somewhere. We have not heard either about the option of living above shops. There are lots of shops in many cities and towns across the United Kingdom of Great Britain and Northern Ireland with options for upstairs developments of flats, and we should consider that.

I am mindful of the time, Mr Bone. Major investment is needed in all constituencies across the United Kingdom. It will help local construction industries, and therefore the local economy, and allow families an adequate standard of living. It must be driven by Government initiatives. With great respect to the Minister, who I know will have a good response, as will the Opposition spokesperson, we should subsidise developers providing smaller pensioner homes, and help first-time buyers to get on the property ladder without increasing their long-term debt to an unmanageable level.

This debate is about not simply allowing houses to be built, but Government help, encouragement and involvement at every level, from social housing to affordable private housing. There must be a team within the Department to focus on the end goal of merging the two sectors to deliver for all the families in the United Kingdom of Great Britain and Northern Ireland. They are crying out for fit-for-purpose affordable homes, and we have a duty to deliver them.

[Mr Peter Bone (in the Chair)]

I thank the hon. Gentleman for his self-restraint.

--- Later in debate ---

[Tony Lloyd (Rochdale) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Bone. I am told that I ought to declare an interest for the record: as the outgoing Mayor of Greater Manchester, I had responsibility for strategic planning and strategic housing.

I strongly welcome this debate and the opportunity to contribute to it. The right hon. Member for Wokingham (John Redwood) might be either glad or dismayed to know that I probably have a considerable measure of agreement with him in both the way he set out his case and the specific points he made. However, there was perhaps one sin of omission and one of commission.

I will deal with the omission first. I will quote Pete Redfern, the chief executive of Taylor Wimpey, who made a strong point in a review that he carried out last year, in which he said that

“it is vital that policy focuses…on all tenures”,

because the impact of the rented sector on the home ownership sector and vice versa is still very powerful, and we must not neglect that. We must also recognise—in fairness, the Minister’s predecessor had begun to take it on board—that there are some people for whom it will almost certainly never be possible to join the home ownership queues, and we must ensure that there is an adequate provision of high-quality affordable social housing.

I will pick up at an early stage the point that the right hon. Gentleman made about ensuring that our councils have adequate control, because one of the realities at the moment is that far too often developers win on planning appeal; he is right in that regard. However, such wins are massively against the interests of the rational planning of our communities, particularly in areas of dramatic growth of the kind he described in his own constituency. We must ensure that our local authorities have the capacity not only to determine where new homes are located, but to ensure that with that new housing comes the infrastructure to create liveable communities rather than just housing units. That is a very important point.

We have heard some powerful comments from my hon. Friend the Member for York Central (Rachael Maskell), the hon. Member for Strangford (Jim Shannon), my hon. Friends the Members for Mitcham and Morden (Siobhain McDonagh) and for Hackney South and Shoreditch (Meg Hillier), and the hon. Member for Linlithgow and East Falkirk (Martyn Day) about the reality of housing on the ground. We have a housing crisis in this country. It may not affect everybody—it does not affect me as an individual homeowner—but for members of my own family and certainly for many of my constituents there is obviously a crisis.

There is a homelessness crisis and a crisis for those who are inadequately homed—the “disguised” homeless —as several hon. Members have recognised. We are not seeing a high number of new homes built; we now have a crisis of building. One of the most dramatic features has been the major decline since 2010 in the number of people under 40 who are homeowners, because nearly a million people in that age group have disappeared from home ownership. I recognise that it is a moving age group, but that decline is still significant, showing that things are not as they ought to be.

The Government have to take some responsibility for this situation, including for a White Paper that, frankly, is not fit for purpose. I think that anybody who examines housing over any period recognises that short-term fixes simply cannot and will not work. We really need some consensus on both house building and house supply over about a 25-year or 30-year period. We ought to look with ambition at building 250,000 new homes ever year, which is the kind of figure that over time can make a material difference to supply. If we do not do that, the crisis that exists in London, and increasingly in cities such as York, will become the norm throughout our country. We must have an ambitious and radical move on house building.

[Jim Shannon]

It is important that we underline the type of accommodation that is needed in the future. Does the hon. Gentleman recognise—I think the hon. Member for Linlithgow and East Falkirk (Martyn Day) referred to this—that those who are getting older need specific accommodation? In many places there does not seem to be much provision for that specific accommodation. Does he feel that it needs to be a central part of the Government’s strategy as our population grows older?

[Tony Lloyd]

The hon. Gentleman brings me on to an important point. One thing that we must begin to recognise is that we do not actually have a housing market; we have many different segments of housing, all of which have different features. Of course we must recognise the needs of vulnerable people and older people—older people are not necessarily vulnerable, but they have different housing needs. Those needs must be recognised in a long-term housing strategy, and we must ensure that provision is across the piece.

I have the current figures on new starts. In their 2015 manifesto, the Government committed to building some 200,000 starter homes over the Parliament, which is 40,000 a year. Quite frankly, the figures are so dismal and so insignificant that we are failing not simply to hit the statistical targets, but failing real families and real people.

[Tony Lloyd]

My hon. Friend is absolutely right. We have got to have a radical shift in how we deliver things.

In the few moments I have at my disposal, I want to talk about some of the things we have to do. I applaud a number of comments made by Members from all parts of the Chamber. London is probably a special case, but there certainly has to be an examination of the capacity for people to move speculatively into the London housing market. They might not simply be overseas investors; in some areas it might be about recognising that institutional investors, or even private investors, have a detrimental impact on the capacity to house our population. A real issue has been raised about London in particular and the position of people on low pay in public services. We want them to work in our inner-city schools, but frankly they cannot afford to pay the rents or mortgages considered to be the norm.

When we still have the concept that a £450,000 property is affordable, we are living in the realms of fantasy. The traditional lending ratio that building societies offer is 4.5:1. By definition, that means that someone needs a family income of £100,000 for that affordable property. Most of us would not regard that as being the income of the people we want to target affordable housing towards.

[Jim Shannon]

Will the hon. Gentleman give way?

[Tony Lloyd]

If the hon. Gentleman will forgive me, I will not; the debate is short and I know that the Minister will want some time to respond.

We have to look at the question of land availability in a determined way. Some of that is about the cost of land. One issue we all face is that if land is valued at the post-development price, the landowner is the institution or person who creams off all the excess profit, even though the work is not put in by the owner, but possibly by the developer or the commonweal. We have to find some way of transferring the capacity for that value added into provision for the commonweal, whether through the public sector or more generally. We also have to look at the fact that in many of our cities—London, Manchester and northern cities generally—a lot of our brownfield sites are in need of enormous investment to bring them up to a level that is fit for building. Remediation is not just a fancy word; it is something that has to be invested in to make land usable.

We need to recognise that we have a massive skills shortage. There may be an ambition to increase housing supply, but we have a crisis looming with the ageing workforce in construction. The Minister needs to work with other Departments to ensure that there is some rational planning for the future. Frankly, it is not obvious that there is any sense of rationality or planning. If the two could be joined together, we may be in with a chance. We urgently need to tackle that skills shortage. If we do not and we have any kind of housing boom, we will once again see the development of the cowboy builder or prices going through the roof.

If we are to provide starter homes, we must ensure that they are starter homes in perpetuity. The discount needs to stay with the property, because otherwise we will never be able to guarantee, in our overheated housing market, that people will continue to be able to get on the housing ladder as first-time buyers. We need to ensure that Help to Buy for first-time buyers is realistic. Some of the suggestions that the right hon. Member for Wokingham put forward are well worth considering. We have to have something that allows first-time buyers to get into the property market. As Members have said, often the problem is not the cost of funding the mortgage—the mortgage is sometimes considerably cheaper than the rental alternative—but the deposit. The accumulation of the deposit is virtually impossible for many people, and we need to do something about that.

Where I disagree with the right hon. Gentleman is on the concept of right to buy. We have to look at one-to-one replacement. We have to ensure a consistent supply of housing in the social sector or under council ownership. There is nothing immoral about different types of tenure. We need to be tenure-blind in how we plan our future, but if we are tenure-blind, we have to ensure that the resources are there for that tenure.

The last point I will make, simply because of time, is this: I appeal to the Minister to look carefully at the role of social landlords. Social landlords in my city region told me that if they are given the opportunity to develop tenure-blind, they can increase the supply of new homes that they put on the market. The significant increase that they could provide would make a material difference. The artificial restrictions on social landlords are simply not helpful.

I once again congratulate the right hon. Gentleman on securing an important debate. We have to continue the debate, because we are scratching at the surface. We have a long way to go if we are to move to that sense of having a long-term vision for housing. Without that long-term vision, we will fail this generation and we will continue to fail future generations. This is an important debate, but it must continue.