Housing (London)

Karen Buck Excerpts

Wednesday 5th February 2014 Westminster Hall

[Ms Karen Buck (Westminster North) (Lab)]

I also congratulate my hon. Friend the Member for Erith and Thamesmead (Teresa Pearce) on securing this important debate. Looking around Westminster Hall, once again we see Labour colleagues—but not, sadly, colleagues from other parties—speaking about the housing crisis in London.

In the Ipsos MORI poll in London a couple of weeks ago, we saw the evidence that, for the first time ever, Londoners rate the housing crisis as the most serious issue facing them, with 82% of those polled agreeing that we are in the grip of a housing crisis. That crisis affects just about every Londoner—certainly every younger Londoner, who faces the challenge of finding a home of their own. We see this crisis as a cost-of-living crisis, with people unable to afford to buy the homes that, until a few years ago, they were able to buy, albeit sometimes with a struggle. We now see that it is necessary to have a salary of around £50,000 to get a mortgage on a first-time property in London, and of course that is not far off double the average income in London.

We also see that the rented sector, which is growing so dramatically, is being squeezed in London, with rents up 7.9% last year to an average of £938 a month. Again, what we are seeing is not only a terrifying squeeze on Londoners’ incomes but an enormous increase in the housing benefit bill as a consequence; I will refer again to that increase in a minute.

The situation has implications for how we live and the nature of our society. We are seeing a record number of young people who are no longer able to leave home because they are unable to afford a home of their own. We are also seeing an impact on the London economy, which London First and other employers are raising as a matter of serious concern.

If people live in a family home where there is an opportunity for them to stay into their twenties and even into their thirties, that is not great for the families or the young people themselves, but at least it is manageable. However, if we are looking at the kind of young people whose families are in the private rented sector or social rented sector, the situation is leading to the explosion of overcrowding. Currently, 24% of all Londoners are living in overcrowded accommodation. Tragically, I often see young people thrown out of their overcrowded family homes drifting into sofa surfing and sometimes into homelessness. We have seen a dramatic rise in homelessness, especially among the young.

The situation has not only had a serious impact on people’s lives but caused an absurd increase in public spending on the consequences of failure. I made a series of freedom of information inquiries to London councils last month and found that London local authorities had spent half a billion pounds on emergency accommodation since 2010. My own local authority is Westminster, which of course has led the charge on so many of the policies that the Government are adopting. It has spent a staggering £111 million on emergency accommodation. That accommodation is bed and breakfasts and the replacement for bed and breakfasts, which is the nightly booked annex accommodation, with no time limit—families are stuck, often on the outskirts of London or even beyond.

[Glenda Jackson (Hampstead and Kilburn) (Lab)]

I entirely concur with everything that my hon. Friend has said, not only in this debate but in the many others we have had about this issue in the past. I can give an example from my own constituency, where a family has been housed—they have to be housed, because there is a statutory duty on the local authority to house them—in a place that is infested with lice and clearly unfit for human occupation. However, there is virtually nothing else that that local authority can do.

[Ms Buck]

My hon. Friend is absolutely right that some of the conditions that people are living in are shocking in their squalor. That is particularly offensive, given what was in a superb report produced a few weeks ago by Tom Copley of the Greater London authority. It showed that a third of former right-to-buy properties in London are now in the private rented sector.

I have said many times, in Westminster Hall and elsewhere, that it appals me that we can have two households living next door to each other, one in a local authority property where the rent is, say, £110 or £120 a week—allowing people in that household to work and thereby improving their incentive to work—while next door to them is a former right-to-buy property. Many such properties are rented back to the local authority for emergency accommodation, and the rent for them can reach £500 a week. I have been in some of them and seen water pouring down the walls and black fungus growing in the bathroom, including in the toilet. Even for a rent of £500 a week, it is impossible to ensure that such properties are anything other than a slum.

The coalition Government—and, indeed, the Mayor of London—want to see that process intensify; they want to see social housing sold off in central London. They want to see us flogging the last of the family silver, even though these properties are enormously important.

[Clive Efford (Eltham) (Lab)]

Does my hon. Friend agree that at the moment London’s housing market is being turned into a Klondike for wealthy foreigners to make money? There are examples such as those my hon. Friend the Member for Hammersmith (Mr Slaughter) has given; there is also the Ram brewery in Wandsworth, which has just been sold to Chinese developers who will build 600 exclusive high-development houses with no social housing whatever.

[Ms Buck]

I agree. In fact, what we are seeing are two types of new build in London; I simplify, but that is broadly true. One type is high-value properties that are frequently being sold off-plan and internationally. Indeed, last week we heard that only 27% of central London properties are being sold to domestic buyers. As the ITEM Club said of the London housing market:

“Arguably, it would be more appropriate to treat it as an investment market rather than a residential market”.

That is an absolute outrage and a betrayal of Londoners. It also leads to the second type of new build, whereby the affordable social rented housing being built—supposedly to balance the first type of new build—has only Kafkaesque “affordable” rents, charged at up to 80% of market rents, so it is not “social housing” in any sense at all that we have ever understood.

Unsurprisingly, we saw the Office for Budget Responsibility in December uprate its estimate for expenditure on housing benefit by an additional—I stress “additional”—£6 billion. That is the cost of failure: the cost of having to keep families and individuals in private rented and high-rent “affordable” properties, which they cannot afford whether they are working or not.

My hon. Friends have said that there is an alternative, and I completely agree with them. The money being poured into benefits and the pockets of private landlords should instead be spent on building genuinely affordable, decent homes for people to live in and bring their children up in, while maintaining their incentive to work.

As my hon. Friend the Member for Eltham (Clive Efford) said, we also have to do something to tackle the trend of all the other new build properties being sold off-plan and to international investors, so that those young people who want to have a home of their own have a realistic chance of owning one. Everything that the coalition Government are doing is taking us in the wrong direction, whether we are talking about the interests of people’s homes or the interests of the public purse.