Housing Supply

John Leech Excerpts

Wednesday 9th July 2014 Commons Chamber

[Emma Reynolds (Wolverhampton North East) (Lab)]

I beg to move,

That this House notes that the Government has failed to tackle the acute housing shortage which is central to the cost of living crisis and over the last four years has presided over the lowest level of new homes being built in peacetime since the 1920s and the lowest number of homes for social rent being built in at least 20 years; further notes the recent reports that housing starts are forecast to fall this year with a large fall in affordable housing starts; and calls on the Government to tackle the housing shortage and commit to increasing house building to at least 200,000 homes a year by 2020, including by boosting housing supply by creating a Help to Build scheme for small and medium-sized builders alongside a reformed Help to Buy, by reforming the development industry and introducing measures to tackle land banking, by bringing forward plans to deliver a new generation of new towns and garden cities and by giving local authorities a new right to grow to deliver the homes their communities need.

We have called this debate because we are in the midst of the biggest housing crisis in a generation. We are not building even half the homes that we need to keep up with demand, and regrettably the current Government are presiding over the lowest level of house building in peacetime since the 1920s. The shortage just keeps on growing. According to figures that I obtained from the Library recently, the backlog of demand since the Government came to power is 500,000 homes, which is equivalent to Birmingham, England’s second biggest city. Individuals, couples and families are being priced out of home ownership, which has fallen to its lowest level since 1987. Average house prices are now eight times average incomes, and in some high-demand areas the ratio is even higher.

[Mr John Leech (Manchester, Withington) (LD)]

I recognise that there is a crisis in housing. I am therefore shocked by the lack of ambition in the motion. Not only does it commit to only 200,000 extra homes each year, but it gives no commitment whatever to a target for social homes. We should not be surprised, given that for 13 years the Labour Government presided over year-on-year decline in social housing and an overall decline of 200,000 social homes.

[Emma Reynolds]

I will not take any lectures from the hon. Gentleman, because in 2012-13 his Government built only 107,000 homes. We are talking about doubling that number. [Interruption.] Actually, the number of social homes has not gone up—I will come to that.

--- Later in debate ---

[Emma Reynolds]

Land banking is a real problem. It is not just developers who are sitting on land, but middlemen, promoters and agents. The Conservative Mayor of London, Boris Johnson, recognised land banking as “pernicious”, and the Under-Secretary of State for Communities and Local Government, the hon. Member for Grantham and Stamford (Nick Boles), also recognised that before he was given his job as Planning Minister.

[Mr Leech]

Will the hon. Lady give way?

[Emma Reynolds]

I have already given way to the hon. Gentleman.

It is clear that land banking is an issue. We have set out specific proposals to deal with it. First, we will give more power and flexibility to local authorities to escalate fees where land banking is taking place on land with planning permission, and as a last resort we will ensure that local authorities have proper compulsory purchase order powers so that they can sell the land to developers that want to built the homes we so desperately need.

One key challenge in the house building industry is that it is now dominated by a small number of large players. In the 1980s, two thirds of homes in this country were built by small builders, but by 2012 that figure had fallen to below a third. As the number of small builders has declined and the big firms have grown even bigger by acquiring more firms and land, it has become easier for those big firms to buy up land. As Kate Barker found in her report 10 years ago, it is not always in the interests of big builders to build out sites as quickly as the nation needs. We must get more firms and players into the industry to build homes and provide competition. The high cost of housing is driven by the high cost of land. Often, the cost of land means that only big house builders are able to manage the risks. Let me be clear: big house builders play a crucial role in building the homes our country needs, but we need a much more diverse and competitive industry to deliver a step change in house building.

--- Later in debate ---

[Mr Raynsford]

I ask your leave to withdraw that last statement, Mr Deputy Speaker. I was really just saying that the Minister ought to look at the figures published by his own Department and not exaggerate, or gild the lily, by trying to give us an impression that things are much better than they are. This Government’s record is, in fact, a very poor one: in 2011, they managed just 113,000 new homes; in 2012, they built just 115,000 new homes; and in 2013, they got no further than 110,000. Those are the simple figures and they come from his own Department. All they demonstrate is that the previous Labour Government in their last year in office—in 2009, right in the depths of recession—built more homes in one year than this Government have built in any one year since. We built 125,000 homes in 2009 and the level has decreased to an average of just 112,000 a year over the past four years during which this Government have been in office.

[Mr Leech]

rose—

[Mr Raynsford]

I will happily give way to the hon. Gentleman. I hope he will explain why his party has supported this Government, who have had such a lamentable record.

[Mr Leech]

That is not the point I was going to make. I was going to ask whether the right hon. Gentleman would accept that 200,000 homes per year is not an ambitious enough target. The fact that the motion contains no target for social housing—

[Mr Deputy Speaker]

Order. I have explained that interventions must be short. The hon. Gentleman has been here a long time and he has to help us to get other speakers in. I am sure that the right hon. Gentleman got the gist of the question.