Housing

Karen Buck Excerpts

Wednesday 10th June 2015 Commons Chamber

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

I am absolutely delighted that our first Opposition day debate of this Parliament is about housing, because very few issues are more important to the economic and social life of the country. As is often the case, it is important to look at the particular, rather than the general, in order to get a proper understanding both of the Government’s proposals and of the nature of the problems we face, and I want to talk about London in that context.

London faces unique challenges and has done for many years, but that is even more the case at present. We are now the second most expensive city in the world in terms of house prices. To buy a home in London, one needs nine times the average salary, which is a record figure. It is no coincidence that home ownership has become less feasible for Londoners. The number of homeowners has shrunk: fewer than half of all London households are now in home ownership, and in my constituency just three out of 10 households own their own homes.

Social housing supply is also shrinking—we have already heard about some of the consequences of that—so demand inexorably turns to the private rented sector, pushing up rents, but also pushing up state subsidy in the form of housing benefit. It now costs the taxpayer £9 billion a year to subsidise private housing alone. Between 2010 and 2014, the Government spent £115 billion subsidising housing demand through home ownership support and housing benefit. I believe very strongly that there are better ways than that and the Government’s latest proposals to spend that money.

I do not think it is feasible for everyone to own their own home, but I very much support methods of encouraging home ownership for those for whom it is feasible. I regret—this is a particular problem in London—that the shared-ownership model of supporting home ownership for people on low incomes is broken. We need to put fresh life into it and I believe that that is probably a better way of supporting an increase in home ownership in higher-cost areas.

The simple fact is that the Government’s proposal for the right to buy housing association properties is massively expensive and we do not have answers from them as to how it will be properly funded. The National Housing Federation estimates that it will cost £11.6 billion, and the hon. Member for Uxbridge and South Ruislip (Boris Johnson), in his capacity as the Mayor of London, described it before the election as a crazy measure that would require “massive subsidies.”

[Sadiq Khan]

My hon. Friend will be aware that, for every 10 council properties sold, only one new property is built, and the concern about extending the right to buy to housing association properties is that it will reduce the already finite stock. If the Government proceed with their proposal and I table an amendment proposing that there should be a legal obligation to replace sold properties in the local area on a like-for-like basis, would my hon. Friend support that amendment?

[Ms Buck]

I absolutely agree with my right hon. Friend that the issue with right to buy is replacement, as has been the case for some years. I will come to that in a moment.

The Government tell us that, in order to fund the cost of the discount for housing association sales, the replacement of properties and the investment in brownfield regeneration, they intend to force local authorities to sell high-value stock. We are not yet clear about whether they propose a regional solution whereby a third of properties would be sold by region, or whether they will require each individual local authority to sell those properties. As my right hon. Friend has said, it will be extremely difficult to replace properties.

What will be the consequences of forcing local authorities to sell off their stock? Put simply, they will not be able to meet their housing obligations, carry out tenant transfers, relieve overcrowding, assist people with high medical priorities or assist homeless households. In London, it is estimated that, in my local authority, which is one of the high-value areas that will be most affected, the proposal will end lettings. We have roughly 400 lettings a year from void stocks—there will be no more. How are such consequences meant to respond to constituents’ housing needs?

[Dawn Butler]

On housing need, the household benefit cap has affected my constituency of Brent Central more than the whole of Wales put together. It affects 2,252 households and 4,646 children, and the Government’s proposals will just exacerbate that problem.

[Ms Buck]

That is another London problem and it is also very much a problem for the cash flow of housing providers, including housing associations, about which the Government have no answers.

Forcing London local authorities to sell higher-value properties will reduce our stock by up to two thirds. That means that there will be no provision in those London areas and housing need will be displaced into other local authorities.

[Stephen Pound (Ealing North) (Lab)]

Will my hon. Friend give way?

[Ms Buck]

I am not going to give way again, because other Members want to speak.

The proposal will also result in further costs for the housing benefit bill. People who would have been housed in relatively row rent local authority stock will now have to be placed in the private rented sector, where the properties are much more expensive.

As my hon. Friend the Member for Wolverhampton North East (Emma Reynolds) has said, Lord Kerslake from the other place has estimated that the proposal will also result in the loss of £5 billion-worth of housing investment in London. I do not know how Londoners approaching an election next year are going to feel about the fact that, despite the incredibly high pressure on housing in the capital, they are going to lose £5 billion-worth of housing stock.

There are a number of unanswered questions about how this is all going to work, some of which have been asked by my hon. Friend. I would have loved to go through them, but, because time is pressing, I will not do so. We will return to them in the Bill. The Government have, however, failed to answer one critical point, and I think that is deliberate. They are talking about a one-for-one replacement. There have been no guarantees, but they are not talking about a like-for-like replacement. We know perfectly well that properties sold from the local authority stock tended to be of better quality and provided family-sized accommodation, but there is no guarantee that replacement properties under this proposal will provide such accommodation.

This is a fundamentally flawed scheme in many important respects. We have heard this week that Conservatives returned in the election have finally—and too late—begun to make clear their concerns about the bedroom tax. Would it not be wonderful if for once the Government could recognise the flaws in a scheme before they implemented it rather than afterwards?