British House Building Industry

Joan Ryan Excerpts

Thursday 5th September 2019 Commons Chamber

[Siobhain McDonagh (Mitcham and Morden) (Lab)]

I beg to move,

That this House notes with concern the ongoing shortage of housing and the housing crisis across England; further notes with concern the number of families in temporary accommodation and the number of people rough sleeping; acknowledges that there are over one million households on housing waiting lists; recognises the Government’s target to build 300,000 new homes each year; acknowledges that this target has been missed in each year that the Government has been in office and that the number of homes constructed by housebuilding companies that are deemed affordable is insufficient; notes the pay ratios between executives and employees in FTSE 350 housebuilding companies; and calls on the Government to tackle the housing crisis as an urgent priority.

I thank the Backbench Business Committee for granting time for today’s debate and all the Members who will participate. It is amazing to see so many Members here, given the week we have had. At the request of Madam Deputy Speaker, I have stripped quite a lot from this speech because so many people want to speak—I will do my best. I want to give credit to the High Pay Centre and the best possible exposition of its amazing research for this debate on the state of the house building industry.

No Member of this House, whatever their party, can but be fully aware of the crisis in housing and homelessness in all our constituencies. I will open the debate by looking at the scale of the current housing crisis, by considering the record of the FTSE 350 house building companies and their contribution to solving this crisis and finally, and most amazingly, by analysing the utter pay inequality that is rife across the British house building industry.

On streets across our country and on the very doorstep of Parliament, British citizens who simply cannot afford a place to call home are sleeping rough. For the general public, they are the visual representation of our homelessness crisis. As highlighted by the Children’s Commissioner last month, homelessness is far more common in 21st-century Britain.

Not a single week goes by without a normal, hard-working family in my constituency being evicted from their privately rented property and sent to temporary accommodation miles away from family, their schools and their jobs. They join over 83,700 households across our country, including 124,000 children, who are living in temporary accommodation.

[Joan Ryan (Enfield North) (IGC)]

May I add to the picture the hon. Lady is painting by telling her that Enfield has significant problems on housing and homelessness? We have the capital’s highest eviction rate and the second highest number of residents in temporary accommodation, and homelessness has rocketed by 250% since 2011. Does she agree—from what she is saying, I think she clearly does—that the Government’s policy is not only hurting the housing market but causing a huge set of social problems, too?

[Siobhain McDonagh]

The social and financial cost of homelessness far exceeds what we spend on temporary accommodation, which was £1 billion of taxpayers’ money last year—every £1 of it badly spent. Some 6,980 families in my constituency are trapped in bed and breakfast accommodation, having been there longer than the six-week legal limit, including 810 children. Others are stuck in hostels far away from their schools, families and friends.

Some of my constituents are housed, at least temporarily, in Connect House, a warehouse on the busiest south London industrial estate. For anybody who wants to see what Connect House looks like, please have a look at the video on my Twitter account.

I am just crawling through my speech, because I see more and more people here.

Other families who have come to see me are on the ever-expanding waiting list, with 1.2 million families across our country now waiting for a place to call home—1.2 million. Just 6,464 new social homes were built in 2017-18, the second lowest number on record. At that rate, it could take 172 years to give a socially rented home to everyone on the current waiting list. That is utterly appalling when we compare those figures with the 150,000 social homes delivered each year in the mid-1960s or the 203,000 council homes that the Government delivered in 1953. It has been done before and we all know that we can do it again.

In Merton, where my constituency is based, 10,000 families are on the housing waiting list, with lettings for just 2.5% of them in 2018-19. What hope can I give the other 97.5% that they will ever find a place to go? I would like to provide statistics on home ownership but, again, I will move on to some of the other data in my speech.

The statistics and the stories that I have detailed this afternoon should provide thoroughly fertile ground for the British house building industry to get on and build, but its record does not match the potential. Here is the reality: our country’s housing target is 300,000 new homes a year—a figure that has not been reached, as we have already identified, since 1969, when councils and housing associations were building new homes. England is now on course for the worst decade for house building since the second world war.

I would like to look specifically at the performance of the leading house building companies in our country. To the best of my understanding, the figures are all correct as of June. In the last financial year, just 86,685 homes were completed by the 10 FTSE 350 house building companies, despite an extraordinary collective pre-tax profit of more than £5.37 billion. That is a mind-boggling figure, which is better understood when broken down.

Let us start with the four FTSE 100 housing companies: Barratt, Persimmon, Taylor Wimpey and Berkeley. In the most recent financial year, Barratt completed just 17,579 homes—slightly more than Persimmon, which finished 16,449 homes, with profits of £1.1 billion, of which half was down to public subsidy through the Government’s Help to Buy scheme. Taylor Wimpey came third with 15,275 homes completed but, in fourth place, despite an astonishing pre-tax profit of £934.9 million, is Berkeley homes, which completed a pitiful 3,894 homes. Together, those four companies collected a pre-tax profit of an unimaginable £3.68 billion, despite completing just 53,198 homes—less than 18% of the Government’s house building target.

What went wrong? Did they perhaps just not have the land to build the houses? Those four companies are sitting on a land bank of more than 300,000 plots between them. If we add in the rest of the FTSE 350 house building companies—Bellway, Bovis, Countryside, Crest Nicholson, Galliford and Redrow—the collective land bank is a staggering 470,068 plots, yet they completed 86,685 homes between them.