Karen Buck
Main Page: Karen Buck (Labour - Westminster North)Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Ms Karen Buck (Westminster North) (Lab)
It is a pleasure to contribute to the debate under your chairmanship, Sir David. It has the whiff of groundhog day about it as we regularly meet to discuss aspects of London’s housing crisis, but it is important to do so, and I very much congratulate my hon. Friend the Member for Brentford and Isleworth (Ruth Cadbury) on securing the debate. The truth of the matter is that this is not a static situation. Things are getting worse, so it is important that we review the changing and worsening impact of London’s housing crisis and continue both to support the new Mayor of London—as everyone from the Labour side who has contributed to the debate has done—and to press the Government for a review of the policies that are likely to exacerbate an already critical situation and try to get some support for measures to respond.
Why are things getting worse? As we have already heard, the truth is that the escalation of London house prices, driven in large part by the failure of supply, is worsening housing inequality and therefore general inequality in the city to a catastrophic degree. My hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier) quoted a figure for rising house prices since the economic crash, but I think her figures may be slightly out of date as those I have seen today show that London house prices have risen by 91.6% since 2008-09. I do not have immediately to hand information on what London wages have done since then, but I can say that certainly at the lower end of the spectrum they have had a tendency to fall rather than rise. Therefore, despite the fact that the party in government has always traded as the party of home ownership, home ownership has actually been priced out of the reach of hundreds of thousands, if not millions, of people, particularly in London.
There has also been continuing pressure on support for people who need assistance to rent their homes; in the private sector alone 250,000 London children are growing up in families who need assistance to pay their rent. That squeeze on housing support is continuing and deepening, and there are further reductions to come in the local housing allowance, which will also exacerbate the situation. Of course, as my hon. Friends have said, the Housing and Planning Act 2016 will have an impact.
Mr David Burrowes (Enfield, Southgate) (Con)
On the point about the LHA, I welcome the Government’s review. I hope it goes the right way and we realise the impact of the cap on supported housing. Does the hon. Lady recognise, not least in relation to Westminster, the impact on places such as Enfield of the pressure on temporary accommodation, and placements of vulnerable children with many needs? There is a need for a better, strategic way of handling such relocations. Property prices are cheaper in Enfield than they are, perhaps, in inner London. Placements of needy, vulnerable children are having an impact on outer London boroughs and there needs to be a better way of handling that across London.
Ms Buck
I absolutely agree with the hon. Gentleman, although I am slightly baffled by the implications of his critiquing the policy of his party’s Government. I hope that the Minister is listening, because the hon. Gentleman is right.
The Housing and Planning Act 2016 will make the situation worse through reducing the stock of housing to rent; the extension of the right to buy to housing associations; the forced sale of so-called higher value properties in the social rented stock; the replacement, through planning changes, of the scope for negotiation of homes for rent in new developments with the starter homes policies; and the implications of pay to stay and fixed-term tenancies. We had many opportunities to discuss the measures and our concerns fell on deaf ears, but they are a poisonous cocktail and will only intensify London’s housing crisis.
Barry Gardiner (Brent North) (Lab)
Is my hon. Friend aware that in Brent the rent for an average two-bedroom property is £21,500 a year? If the rent for affordable homes was 80% of that, that would be £17,222 a year, when the national minimum wage brings in £13,852. The maths simply do not stack up for people living at the bottom of the scale in London.
Ms Buck
My hon. Friend is absolutely correct. The result of all the different pressures together, with worse to come, has an impact beyond housing, strictly defined; it is changing the face of London, intensifying housing inequality, and changing the face of poverty and low incomes in London. The typical family in poverty is now, for the first time in modern times, a working family living in the private rented sector in outer London—that takes me back to the point that the hon. Member for Enfield, Southgate (Mr Burrowes) raised. Poverty is being suburbanised and intensified by what is happening in the private rented sector.
All that is bad for London’s economy. There is ample testimony from London First, the CBI and many other organisations that the housing crisis is making it hard to recruit, and is undermining the effectiveness of London’s economy. It is making it hard to recruit and retain staff in the services on which we all depend. However, it is also undermining London’s civic life—the health and wellbeing of the city—as people struggle to cope with the consequences of the housing crisis. Above all, it is bad for individuals—for struggling families and for young people seeking to find a stable home of their own in which to build a life and family.
Inner London is on the front line, because it has the steepest house prices, broadly speaking. How are inner London boroughs such as Westminster coping with that? Very badly indeed, I am sorry to say. Westminster produced just 46 new affordable homes last year. Over the past three years a mere 12% of all the development in Westminster has been affordable. That is less than half of the already appalling 28% London-wide average. That is the pattern across London. Areas with the greatest housing pressures have the worst supply of new affordable homes.
In the weeks before the London mayoralty election—it is no accident or coincidence—a number of new developments were pushed ahead for approval by Westminster City Council. The Whiteleys scheme in Bayswater has 103 luxury flats, just 2% of which are affordable. Paddington Green has 690 flats, 19% of which are affordable. There are other schemes in the pipeline. Westminster City Council is closing and demolishing the Jubilee sports centre—the Prime Place development—and the developer is marketing its properties in the far east before a single one has been built. In fact, it was marketing in the far east before the closure of the sports centre. Figures out this week show that there has been a 9% rise in the number of London properties owned by offshore companies. It is not simply that we are failing to build—although we are—but we are building the wrong properties, in a way that is part of a process of purchasing from overseas by the super-rich.
Developers are private companies and will behave as the Government permit them to do, and as they are driven to do by commercial logic, unless they are encouraged to do something different. They have been going into the luxury housing market. I was struck yesterday by the marketing brochure of the Galliard company:
“In order to keep up with the trend of trophy apartments and to give buyers what they want, developers are creating properties that offer nothing but luxury and indulgence. In fact, Kay & Co have released statistics that show that ‘35% of units under construction or completed in 2014 are in 5* developments.’”
It adds that according to
“Knight Frank’s Global Development Report from 2015, the amount of prime luxury properties…in London”
is up threefold since 2009. So we are building luxury properties, in some of which—such as the Vauxhall Tower—hardly anyone lives. We are building luxury properties that are a sponge for global money and the super-rich; and a not insignificant proportion of that money is dirty money.
John Cryer
Is my hon. Friend aware that in many new developments in central London, the flats—because overwhelmingly they are flats—are not even being advertised in Britain? I do not mean that in a nationalistic sense, but they are being advertised only in areas of the world where there are large concentrations of wealth and power. Does she think we are storing up an awful lot of social and economic problems for future years, if the trend continues?
Meg Hillier
I am sure my hon. Friend has found in her constituency as I have in my borough that often properties are built and whole blocks are sold over a weekend in Dubai, Hong Kong or such places. Those are not homes for local people. Does she have a comment on that?
Ms Buck
That is absolutely right. It is the well-documented phenomenon of lights-out London. It happens particularly in the wealthiest parts of London, but also with some of those blocks my hon. Friend has mentioned, which are marketed as if they are in the heart of Knightsbridge but are not; properties are being bought up overseas and at the very best used for short-term lets or high-value student accommodation. They certainly do not provide homes. Of course, the consequence, to go back to the intervention by the hon. Member for Enfield, Southgate, is that London boroughs, and particularly those in inner and west London, cannot meet the demand from the people in the greatest need; so homelessness and housing pressures spill over from those boroughs. As it is, it costs Westminster taxpayers £4 million a year to meet the costs of homelessness that are not covered by other Government costs.
We are placing homeless households from Westminster in Enfield, Barking and Dagenham and Newham. Westminster City Council says that it would like to build permanent homes in outer London. I do not know what outer London thinks of that, because in outer London boroughs such as Hounslow and Sutton, homelessness is rising very sharply. I do not see why inner London boroughs should be allowed to get away with that. As the hon. Member for Enfield, Southgate said, those households are being placed far from their support networks, which puts additional pressure on services in the host boroughs.
A shortage of school places is just one example of such pressure. The latest figures show that Westminster has 1,200 unfilled school places, and yet we are exporting our homeless households all over. Meanwhile, in an outer London borough such as Redbridge, which is a receiving borough but also an exporting borough, there is a phenomenal situation, with pressures being dropped there and people having to be placed elsewhere. Only two weeks ago, Redbridge Council revealed that it was going to purchase an ex-barracks in Canterbury in order to place its homeless there, much to the chagrin of Canterbury City Council, which had been negotiating to get the property for itself. This is lunacy, and it is all consequential upon wider problems.
Meanwhile, some get lucky, and some will get luckier as a result of the Government’s Housing and Planning Act. The starter homes policy will be a windfall for households who have the bank of mum and dad and are on joint or single incomes of £80,000 or £90,000. Those people will be able to enjoy the benefits of the discount on a starter home, carry that forward and cash it in. Even Westminster City Council, which is not known for its caution on such things, warned the Government that the potential windfall of tax-free capital gain is “very considerable” and
“wholly to the benefit of a first-time buyer”.
Good luck to them, if that is what the Government want to do, but bad luck to everyone else who either cannot afford that or finds they are at the sharp end of the housing crisis.
Some of the people who have been in my surgery in the past few weeks will not be the beneficiaries or be able to afford a starter home, even though they would love to have one. They include the pensioner I met last week, who has been in his privately rented home for 27 years and whose rent has gone up from £750 a month in 2014 to £2,500 now. Many other individuals are in that kind of crisis.
The Minister needs to address that. He needs to make it absolutely clear that he understands the impact of the crisis and will get behind the Mayor in the measures he intends to take to provide a range of affordable homes across all tenures. The Minister needs to work with other Departments to ensure that the pressures that brought about this crisis in London are resolved, for the sake of our city’s health and for the many people who depend upon a decent affordable home.
Mr Jones
As the hon. Lady will know, we are working up the plan for higher-value social homes that will be sold. At the moment, it has not been made clear which properties will need to be sold, but certainly they will only be properties that are vacant; and just to reassure her, we are absolutely clear that for every house that is sold in London, at least two affordable homes will be built.
Mr Jones
I need to make more progress because I am very short of time.
We have helped to unlock major regeneration sites in London and we are investing £600 million to create 31 new housing zones in London, which will deliver 77,000 new homes by 2026. In the last Parliament, we released public sector land with capacity for 109,000 homes. We will release more land, and at least 160,000 homes will be built. The London Land Commission will continue to be an important way of engaging with the public sector to release more land for housing.
In the short time that I have left, I will pick up a few of the points that hon. Members raised. First, there was an assertion that people buying starter homes would need a minimum salary of £90,000. I am sure that many hon. Members will have seen that Shelter has done research on that, based on 2016 housing values. It came to the conclusion that people would be able to buy on salaries of £45,000 and it predicted that 30% of the people in London who are currently in private rented accommodation would be able to buy a starter home on that basis.
Another assertion was about the supply of homes. I find it difficult to comprehend that so many Opposition Members are criticising this Government’s action on providing affordable housing when, between 1997 and 2010, 420,000 affordable houses were lost from the system. I can assure hon. Members that this Government are absolutely committed to bringing forward new affordable housing. We are introducing an £8 billion programme to deliver 400,000 more affordable houses; 135,000 of those will be for shared ownership—that was a concern raised during the debate—and 100,000 of them will be affordable homes for rent.
Let me settle some concerns about the right to buy in London. Since the reinvigorated right to buy was introduced by my party as the lead party in the coalition during the last Parliament, in London, where right-to-buy housing sales have been made, on average roughly two additional homes have replaced that stock. I am getting a polite stare from you, Sir David, so I will conclude now for the mover of the motion.